    [United States Statutes at Large, Volume 124, 111th Congress, 2nd Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    Public Law 111-148
    111th Congress

    An Act

    Entitled The Patient Protection and Affordable Care Act. <>

    Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled, <>

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short <> Title.--This Act may be cited
    as the ``Patient Protection and Affordable Care Act''.

    (b) Table of Contents.--The table of contents of this Act is as
    follows:

    Sec. 1. Short title; table of contents.

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

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

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

    ``PART A--Individual and Group Market Reforms

    ``subpart ii--improving coverage

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

    Subtitle B--Immediate Actions to Preserve and Expand Coverage

    Sec. 1101. Immediate access to insurance for uninsured individuals with
    a preexisting condition.
    Sec. 1102. Reinsurance for early retirees.
    Sec. 1103. Immediate information that allows consumers to identify
    affordable coverage options.
    Sec. 1104. Administrative simplification.
    Sec. 1105. Effective date.

    Subtitle C--Quality Health Insurance Coverage for All Americans

    PART I--Health Insurance Market Reforms

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

    ``subpart i--general reform

    ``Sec. 2704. Prohibition of preexisting condition exclusions or
    other discrimination based on health status.
    ``Sec. 2701. Fair health insurance premiums.
    ``Sec. 2702. Guaranteed availability of coverage.

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    ``Sec. 2703. Guaranteed renewability of coverage.
    ``Sec. 2705. Prohibiting discrimination against individual
    participants and beneficiaries based on
    health status.
    ``Sec. 2706. Non-discrimination in health care.
    ``Sec. 2707. Comprehensive health insurance coverage.
    ``Sec. 2708. Prohibition on excessive waiting periods.

    PART II--Other Provisions

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

    Subtitle D--Available Coverage Choices for All Americans

    PART I--Establishment of Qualified Health Plans

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

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

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

    PART III--State Flexibility Relating to Exchanges

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

    PART IV--State Flexibility to Establish Alternative Programs

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

    PART V--Reinsurance and Risk Adjustment

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

    Subtitle E--Affordable Coverage Choices for All Americans

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

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

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

    subpart b--eligibility determinations

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

    PART II--Small Business Tax Credit

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

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    Subtitle F--Shared Responsibility for Health Care

    PART I--Individual Responsibility

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

    PART II--Employer Responsibilities

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

    Subtitle G--Miscellaneous Provisions

    Sec. 1551. Definitions.
    Sec. 1552. Transparency in government.
    Sec. 1553. Prohibition against discrimination on assisted suicide.
    Sec. 1554. Access to therapies.
    Sec. 1555. Freedom not to participate in Federal health insurance
    programs.
    Sec. 1556. Equity for certain eligible survivors.
    Sec. 1557. Nondiscrimination.
    Sec. 1558. Protections for employees.
    Sec. 1559. Oversight.
    Sec. 1560. Rules of construction.
    Sec. 1561. Health information technology enrollment standards and
    protocols.
    Sec. 1562. Conforming amendments.
    Sec. 1563. Sense of the Senate promoting fiscal responsibility.

    TITLE II--ROLE OF PUBLIC PROGRAMS

    Subtitle A--Improved Access to Medicaid

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

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

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

    Subtitle C--Medicaid and CHIP Enrollment Simplification

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

    Subtitle D--Improvements to Medicaid Services

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

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

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

    Subtitle F--Medicaid Prescription Drug Coverage

    Sec. 2501. Prescription drug rebates.

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    Sec. 2502. Elimination of exclusion of coverage of certain drugs.
    Sec. 2503. Providing adequate pharmacy reimbursement.

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

    Sec. 2551. Disproportionate share hospital payments.

    Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

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

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

    Sec. 2701. Adult health quality measures.
    Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions.
    Sec. 2703. State option to provide health homes for enrollees with
    chronic conditions.
    Sec. 2704. Demonstration project to evaluate integrated care around a
    hospitalization.
    Sec. 2705. Medicaid Global Payment System Demonstration Project.
    Sec. 2706. Pediatric Accountable Care Organization Demonstration
    Project.
    Sec. 2707. Medicaid emergency psychiatric demonstration project.

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

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

    Subtitle K--Protections for American Indians and Alaska Natives

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

    Subtitle L--Maternal and Child Health Services

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

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

    Subtitle A--Transforming the Health Care Delivery System

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

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

    PART II--National Strategy to Improve Health Care Quality

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

    PART III--Encouraging Development of New Patient Care Models

    Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation
    within CMS.
    Sec. 3022. Medicare shared savings program.
    Sec. 3023. National pilot program on payment bundling.
    Sec. 3024. Independence at home demonstration program.
    Sec. 3025. Hospital readmissions reduction program.

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    Sec. 3026. Community-Based Care Transitions Program.
    Sec. 3027. Extension of gainsharing demonstration.

    Subtitle B--Improving Medicare for Patients and Providers

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

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

    PART II--Rural Protections

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

    PART III--Improving Payment Accuracy

    Sec. 3131. Payment adjustments for home health care.
    Sec. 3132. Hospice reform.
    Sec. 3133. Improvement to medicare disproportionate share hospital (DSH)
    payments.
    Sec. 3134. Misvalued codes under the physician fee schedule.
    Sec. 3135. Modification of equipment utilization factor for advanced
    imaging services.
    Sec. 3136. Revision of payment for power-driven wheelchairs.
    Sec. 3137. Hospital wage index improvement.
    Sec. 3138. Treatment of certain cancer hospitals.
    Sec. 3139. Payment for biosimilar biological products.
    Sec. 3140. Medicare hospice concurrent care demonstration program.
    Sec. 3141. Application of budget neutrality on a national basis in the
    calculation of the Medicare hospital wage index floor.
    Sec. 3142. HHS study on urban Medicare-dependent hospitals.
    Sec. 3143. Protecting home health benefits.

    Subtitle C--Provisions Relating to Part C

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

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    Sec. 3209. Authority to deny plan bids.
    Sec. 3210. Development of new standards for certain Medigap plans.

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

    Sec. 3301. Medicare coverage gap discount program.
    Sec. 3302. Improvement in determination of Medicare part D low-income
    benchmark premium.
    Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals
    under prescription drug plans and MA-PD plans.
    Sec. 3304. Special rule for widows and widowers regarding eligibility
    for low-income assistance.
    Sec. 3305. Improved information for subsidy eligible individuals
    reassigned to prescription drug plans and MA-PD plans.
    Sec. 3306. Funding outreach and assistance for low-income programs.
    Sec. 3307. Improving formulary requirements for prescription drug plans
    and MA-PD plans with respect to certain categories or classes
    of drugs.
    Sec. 3308. Reducing part D premium subsidy for high-income
    beneficiaries.
    Sec. 3309. Elimination of cost sharing for certain dual eligible
    individuals.
    Sec. 3310. Reducing wasteful dispensing of outpatient prescription drugs
    in long-term care facilities under prescription drug plans
    and MA-PD plans.
    Sec. 3311. Improved Medicare prescription drug plan and MA-PD plan
    complaint system.
    Sec. 3312. Uniform exceptions and appeals process for prescription drug
    plans and MA-PD plans.
    Sec. 3313. Office of the Inspector General studies and reports.
    Sec. 3314. Including costs incurred by AIDS drug assistance programs and
    Indian Health Service in providing prescription drugs toward
    the annual out-of-pocket threshold under part D.
    Sec. 3315. Immediate reduction in coverage gap in 2010.

    Subtitle E--Ensuring Medicare Sustainability

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

    Subtitle F--Health Care Quality Improvements

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

    Subtitle G--Protecting and Improving Guaranteed Medicare Benefits

    Sec. 3601. Protecting and improving guaranteed Medicare benefits.
    Sec. 3602. No cuts in guaranteed benefits.

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

    Subtitle A--Modernizing Disease Prevention and Public Health Systems

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

    Subtitle B--Increasing Access to Clinical Preventive Services

    Sec. 4101. School-based health centers.
    Sec. 4102. Oral healthcare prevention activities.

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

    Subtitle C--Creating Healthier Communities

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

    Subtitle D--Support for Prevention and Public Health Innovation

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

    Subtitle E--Miscellaneous Provisions

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

    TITLE V--HEALTH CARE WORKFORCE

    Subtitle A--Purpose and Definitions

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

    Subtitle B--Innovations in the Health Care Workforce

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

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

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

    Subtitle D--Enhancing Health Care Workforce Education and Training

    Sec. 5301. Training in family medicine, general internal medicine,
    general pediatrics, and physician assistantship.
    Sec. 5302. Training opportunities for direct care workers.
    Sec. 5303. Training in general, pediatric, and public health dentistry.
    Sec. 5304. Alternative dental health care providers demonstration
    project.
    Sec. 5305. Geriatric education and training; career awards;
    comprehensive geriatric education.
    Sec. 5306. Mental and behavioral health education and training grants.
    Sec. 5307. Cultural competency, prevention, and public health and
    individuals with disabilities training.
    Sec. 5308. Advanced nursing education grants.
    Sec. 5309. Nurse education, practice, and retention grants.
    Sec. 5310. Loan repayment and scholarship program.
    Sec. 5311. Nurse faculty loan program.

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    Sec. 5312. Authorization of appropriations for parts B through D of
    title VIII.
    Sec. 5313. Grants to promote the community health workforce.
    Sec. 5314. Fellowship training in public health.
    Sec. 5315. United States Public Health Sciences Track.

    Subtitle E--Supporting the Existing Health Care Workforce

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

    Subtitle F--Strengthening Primary Care and Other Workforce Improvements

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

    Subtitle G--Improving Access to Health Care Services

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

    Subtitle H--General Provisions

    Sec. 5701. Reports.

    TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY

    Subtitle A--Physician Ownership and Other Transparency

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

    Subtitle B--Nursing Home Transparency and Improvement

    PART I--Improving Transparency of Information

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

    PART II--Targeting Enforcement

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

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    PART III--Improving Staff Training

    Sec. 6121. Dementia and abuse prevention training.

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

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

    Subtitle D--Patient-Centered Outcomes Research

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

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

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

    Subtitle F--Additional Medicaid Program Integrity Provisions

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

    Subtitle G--Additional Program Integrity Provisions

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

    Subtitle H--Elder Justice Act

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

    Subtitle I--Sense of the Senate Regarding Medical Malpractice

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

    TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES

    Subtitle A--Biologics Price Competition and Innovation

    Sec. 7001. Short title.

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    Sec. 7002. Approval pathway for biosimilar biological products.
    Sec. 7003. Savings.

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

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

    TITLE VIII--CLASS ACT

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

    TITLE IX--REVENUE PROVISIONS

    Subtitle A--Revenue Offset Provisions

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

    Subtitle B--Other Provisions

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

    TITLE X--STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

    Subtitle A--Provisions Relating to Title I

    Sec. 10101. Amendments to subtitle A.
    Sec. 10102. Amendments to subtitle B.
    Sec. 10103. Amendments to subtitle C.
    Sec. 10104. Amendments to subtitle D.
    Sec. 10105. Amendments to subtitle E.
    Sec. 10106. Amendments to subtitle F.
    Sec. 10107. Amendments to subtitle G.
    Sec. 10108. Free choice vouchers.
    Sec. 10109. Development of standards for financial and administrative
    transactions.

    Subtitle B--Provisions Relating to Title II

    PART I--Medicaid and CHIP

    Sec. 10201. Amendments to the Social Security Act and title II of this
    Act.
    Sec. 10202. Incentives for States to offer home and community-based
    services as a long-term care alternative to nursing homes.
    Sec. 10203. Extension of funding for CHIP through fiscal year 2015 and
    other CHIP-related provisions.

    PART II--Support for Pregnant and Parenting Teens and Women

    Sec. 10211. Definitions.

    [[Page 129]]

    Sec. 10212. Establishment of pregnancy assistance fund.
    Sec. 10213. Permissible uses of Fund.
    Sec. 10214. Appropriations.

    PART III--Indian Health Care Improvement

    Sec. 10221. Indian health care improvement.

    Subtitle C--Provisions Relating to Title III

    Sec. 10301. Plans for a Value-Based purchasing program for ambulatory
    surgical centers.
    Sec. 10302. Revision to national strategy for quality improvement in
    health care.
    Sec. 10303. Development of outcome measures.
    Sec. 10304. Selection of efficiency measures.
    Sec. 10305. Data collection; public reporting.
    Sec. 10306. Improvements under the Center for Medicare and Medicaid
    Innovation.
    Sec. 10307. Improvements to the Medicare shared savings program.
    Sec. 10308. Revisions to national pilot program on payment bundling.
    Sec. 10309. Revisions to hospital readmissions reduction program.
    Sec. 10310. Repeal of physician payment update.
    Sec. 10311. Revisions to extension of ambulance add-ons.
    Sec. 10312. Certain payment rules for long-term care hospital services
    and moratorium on the establishment of certain hospitals and
    facilities.
    Sec. 10313. Revisions to the extension for the rural community hospital
    demonstration program.
    Sec. 10314. Adjustment to low-volume hospital provision.
    Sec. 10315. Revisions to home health care provisions.
    Sec. 10316. Medicare DSH.
    Sec. 10317. Revisions to extension of section 508 hospital provisions.
    Sec. 10318. Revisions to transitional extra benefits under Medicare
    Advantage.
    Sec. 10319. Revisions to market basket adjustments.
    Sec. 10320. Expansion of the scope of, and additional improvements to,
    the Independent Medicare Advisory Board.
    Sec. 10321. Revision to community health teams.
    Sec. 10322. Quality reporting for psychiatric hospitals.
    Sec. 10323. Medicare coverage for individuals exposed to environmental
    health hazards.
    Sec. 10324. Protections for frontier States.
    Sec. 10325. Revision to skilled nursing facility prospective payment
    system.
    Sec. 10326. Pilot testing pay-for-performance programs for certain
    Medicare providers.
    Sec. 10327. Improvements to the physician quality reporting system.
    Sec. 10328. Improvement in part D medication therapy management (MTM)
    programs.
    Sec. 10329. Developing methodology to assess health plan value.
    Sec. 10330. Modernizing computer and data systems of the Centers for
    Medicare & Medicaid services to support improvements in care
    delivery.
    Sec. 10331. Public reporting of performance information.
    Sec. 10332. Availability of medicare data for performance measurement.
    Sec. 10333. Community-based collaborative care networks.
    Sec. 10334. Minority health.
    Sec. 10335. Technical correction to the hospital value-based purchasing
    program.
    Sec. 10336. GAO study and report on Medicare beneficiary access to high-
    quality dialysis services.

    Subtitle D--Provisions Relating to Title IV

    Sec. 10401. Amendments to subtitle A.
    Sec. 10402. Amendments to subtitle B.
    Sec. 10403. Amendments to subtitle C.
    Sec. 10404. Amendments to subtitle D.
    Sec. 10405. Amendments to subtitle E.
    Sec. 10406. Amendment relating to waiving coinsurance for preventive
    services.
    Sec. 10407. Better diabetes care.
    Sec. 10408. Grants for small businesses to provide comprehensive
    workplace wellness programs.
    Sec. 10409. Cures Acceleration Network.
    Sec. 10410. Centers of Excellence for Depression.
    Sec. 10411. Programs relating to congenital heart disease.
    Sec. 10412. Automated Defibrillation in Adam's Memory Act.
    Sec. 10413. Young women's breast health awareness and support of young
    women diagnosed with breast cancer.

    Subtitle E--Provisions Relating to Title V

    Sec. 10501. Amendments to the Public Health Service Act, the Social
    Security Act, and title V of this Act.

    [[Page 130]]

    Sec. 10502. Infrastructure to Expand Access to Care.
    Sec. 10503. Community Health Centers and the National Health Service
    Corps Fund.
    Sec. 10504. Demonstration project to provide access to affordable care.

    Subtitle F--Provisions Relating to Title VI

    Sec. 10601. Revisions to limitation on medicare exception to the
    prohibition on certain physician referrals for hospitals.
    Sec. 10602. Clarifications to patient-centered outcomes research.
    Sec. 10603. Striking provisions relating to individual provider
    application fees.
    Sec. 10604. Technical correction to section 6405.
    Sec. 10605. Certain other providers permitted to conduct face to face
    encounter for home health services.
    Sec. 10606. Health care fraud enforcement.
    Sec. 10607. State demonstration programs to evaluate alternatives to
    current medical tort litigation.
    Sec. 10608. Extension of medical malpractice coverage to free clinics.
    Sec. 10609. Labeling changes.

    Subtitle G--Provisions Relating to Title VIII

    Sec. 10801. Provisions relating to title VIII.

    Subtitle H--Provisions Relating to Title IX

    Sec. 10901. Modifications to excise tax on high cost employer-sponsored
    health coverage.
    Sec. 10902. Inflation adjustment of limitation on health flexible
    spending arrangements under cafeteria plans.
    Sec. 10903. Modification of limitation on charges by charitable
    hospitals.
    Sec. 10904. Modification of annual fee on medical device manufacturers
    and importers.
    Sec. 10905. Modification of annual fee on health insurance providers.
    Sec. 10906. Modifications to additional hospital insurance tax on high-
    income taxpayers.
    Sec. 10907. Excise tax on indoor tanning services in lieu of elective
    cosmetic medical procedures.
    Sec. 10908. Exclusion for assistance provided to participants in State
    student loan repayment programs for certain health
    professionals.
    Sec. 10909. Expansion of adoption credit and adoption assistance
    programs.

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

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

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

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

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

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

    [[Page 131]]

    ``Subpart II--Improving Coverage

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

    ``(a) In General.--A group health plan and a health insurance issuer
    offering group or individual health insurance coverage may not
    establish--
    ``(1) lifetime limits on the dollar value of benefits for
    any participant or beneficiary; or
    ``(2) unreasonable annual limits (within the meaning of
    section 223 of the Internal Revenue Code of 1986) on the dollar
    value of benefits for any participant or beneficiary.

    ``(b) Per Beneficiary Limits.--Subsection (a) shall not be construed
    to prevent a group health plan or health insurance coverage that is not
    required to provide essential health benefits under section 1302(b) of
    the Patient Protection and Affordable Care Act from placing annual or
    lifetime per beneficiary limits on specific covered benefits to the
    extent that such limits are otherwise permitted under Federal or State
    law.

    ``SEC. 2712. <> PROHIBITION ON RESCISSIONS.

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

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

    ``(a) In General.--A group health plan and a health insurance issuer
    offering group or individual health insurance coverage shall, at a
    minimum provide coverage for and shall not impose any cost sharing
    requirements for--
    ``(1) evidence-based items or services that have in effect a
    rating of `A' or `B' in the current recommendations of the
    United States Preventive Services Task Force;
    ``(2) immunizations that have in effect a recommendation
    from the Advisory Committee on Immunization Practices of the
    Centers for Disease Control and Prevention with respect to the
    individual involved; and
    ``(3) with respect to infants, children, and adolescents,
    evidence-informed preventive care and screenings provided for in
    the comprehensive guidelines supported by the Health Resources
    and Services Administration.
    ``(4) with respect to women, such additional preventive care
    and screenings not described in paragraph (1) as provided for in
    comprehensive guidelines supported by the Health Resources and
    Services Administration for purposes of this paragraph.
    ``(5) for the purposes of this Act, and for the purposes of
    any other provision of law, the current recommendations of the
    United States Preventive Service Task Force regarding breast
    cancer screening, mammography, and prevention shall

    [[Page 132]]

    be considered the most current other than those issued in or
    around November 2009.

    Nothing in this subsection shall be construed to prohibit a plan or
    issuer from providing coverage for services in addition to those
    recommended by United States Preventive Services Task Force or to deny
    coverage for services that are not recommended by such Task Force.
    ``(b) Interval.--
    ``(1) In general.--The Secretary shall establish a minimum
    interval between the date on which a recommendation described in
    subsection (a)(1) or (a)(2) or a guideline under subsection
    (a)(3) is issued and the plan year with respect to which the
    requirement described in subsection (a) is effective with
    respect to the service described in such recommendation or
    guideline.
    ``(2) Minimum.--The interval described in paragraph (1)
    shall not be less than 1 year.

    ``(c) Value-based Insurance Design.--The Secretary may develop
    guidelines to permit a group health plan and a health insurance issuer
    offering group or individual health insurance coverage to utilize value-
    based insurance designs.

    ``SEC. 2714. <> EXTENSION OF DEPENDENT COVERAGE.

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

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

    ``(a) In <> General.--Not later than 12 months
    after the date of enactment of the Patient Protection and Affordable
    Care Act, the Secretary shall develop standards for use by a group
    health plan and a health insurance issuer offering group or individual
    health insurance coverage, in compiling and providing to enrollees a
    summary of benefits and coverage explanation that accurately describes
    the benefits and coverage under the applicable plan or coverage. In
    developing such standards, the Secretary shall consult with the National
    Association of Insurance Commissioners (referred to in this section as
    the `NAIC'), a working group composed of representatives of health
    insurance-related consumer advocacy organizations, health insurance
    issuers, health care professionals, patient advocates including those
    representing individuals with limited English proficiency, and other
    qualified individuals.

    ``(b) Requirements.--The standards for the summary of benefits and
    coverage developed under subsection (a) shall provide for the following:

    [[Page 133]]

    ``(1) Appearance.--The standards shall ensure that the
    summary of benefits and coverage is presented in a uniform
    format that does not exceed 4 pages in length and does not
    include print smaller than 12-point font.
    ``(2) Language.--The standards shall ensure that the summary
    is presented in a culturally and linguistically appropriate
    manner and utilizes terminology understandable by the average
    plan enrollee.
    ``(3) Contents.--The standards shall ensure that the summary
    of benefits and coverage includes--
    ``(A) uniform definitions of standard insurance
    terms and medical terms (consistent with subsection (g))
    so that consumers may compare health insurance coverage
    and understand the terms of coverage (or exception to
    such coverage);
    ``(B) a description of the coverage, including cost
    sharing for--
    ``(i) each of the categories of the essential
    health benefits described in subparagraphs (A)
    through (J) of section 1302(b)(1) of the Patient
    Protection and Affordable Care Act; and
    ``(ii) other benefits, as identified by the
    Secretary;
    ``(C) the exceptions, reductions, and limitations on
    coverage;
    ``(D) the cost-sharing provisions, including
    deductible, coinsurance, and co-payment obligations;
    ``(E) the renewability and continuation of coverage
    provisions;
    ``(F) a coverage facts label that includes examples
    to illustrate common benefits scenarios, including
    pregnancy and serious or chronic medical conditions and
    related cost sharing, such scenarios to be based on
    recognized clinical practice guidelines;
    ``(G) a statement of whether the plan or coverage--
    ``(i) provides minimum essential coverage (as
    defined under section 5000A(f) of the Internal
    Revenue Code 1986); and
    ``(ii) ensures that the plan or coverage share
    of the total allowed costs of benefits provided
    under the plan or coverage is not less than 60
    percent of such costs;
    ``(H) a statement that the outline is a summary of
    the policy or certificate and that the coverage document
    itself should be consulted to determine the governing
    contractual provisions; and
    ``(I) a contact number for the consumer to call with
    additional questions and an Internet web address where a
    copy of the actual individual coverage policy or group
    certificate of coverage can be reviewed and obtained.

    ``(c) Periodic Review and Updating.--The Secretary shall
    periodically review and update, as appropriate, the standards developed
    under this section.
    ``(d) Requirement To Provide.--
    ``(1) In general.--Not later <> than 24
    months after the date of enactment of the Patient Protection and
    Affordable Care Act, each entity described in paragraph (3)
    shall provide, prior

    [[Page 134]]

    to any enrollment restriction, a summary of benefits and
    coverage explanation pursuant    to the standards developed by
    the Secretary under subsection (a) to--
    ``(A) an applicant at the time of application;
    ``(B) an enrollee prior to the time of enrollment or
    reenrollment, as applicable; and
    ``(C) a policyholder or certificate holder at the
    time of issuance of the policy or delivery of the
    certificate.
    ``(2) Compliance.--An entity described in paragraph (3) is
    deemed to be in compliance with this section if the summary of
    benefits and coverage described in subsection (a) is provided in
    paper or electronic form.
    ``(3) Entities in general.--An entity described in this
    paragraph is--
    ``(A) a health insurance issuer (including a group
    health plan that is not a self-insured plan) offering
    health insurance coverage within the United States; or
    ``(B) in the case of a self-insured group health
    plan, the plan sponsor or designated administrator of
    the plan (as such terms are defined in section 3(16) of
    the Employee Retirement Income Security Act of 1974).
    ``(4) Notice <> of modifications.--If a
    group health plan or health insurance issuer makes any material
    modification in any of the terms of the plan or coverage
    involved (as defined for purposes of section 102 of the Employee
    Retirement Income Security Act of 1974) that is not reflected in
    the most recently provided summary of benefits and coverage, the
    plan or issuer shall provide notice of such modification to
    enrollees not later than 60 days prior to the date on which such
    modification will become effective.

    ``(e) Preemption.--The standards developed under subsection (a)
    shall preempt any related State standards that require a summary of
    benefits and coverage that provides less information to consumers than
    that required to be provided under this section, as determined by the
    Secretary.
    ``(f) Failure To Provide.--An entity <> described in
    subsection (d)(3) that willfully fails to provide the information
    required under this section shall be subject to a fine of not more than
    $1,000 for each such failure. Such failure with respect to each enrollee
    shall constitute a separate offense for purposes of this subsection.

    ``(g) Development of Standard Definitions.--
    ``(1) In general.--The
    Secretary <> shall, by regulation, provide
    for the development of standards for the definitions of terms
    used in health insurance coverage, including the insurance-
    related terms described in paragraph (2) and the medical terms
    described in paragraph (3).
    ``(2) Insurance-related terms.--The insurance-related terms
    described in this paragraph are premium, deductible, co-
    insurance, co-payment, out-of-pocket limit, preferred provider,
    non-preferred provider, out-of-network co-payments, UCR (usual,
    customary and reasonable) fees, excluded services, grievance and
    appeals, and such other terms as the Secretary determines are
    important to define so that consumers may compare health
    insurance coverage and understand the terms of their coverage.

    [[Page 135]]

    ``(3) Medical terms.--The medical terms described in this
    paragraph are hospitalization, hospital outpatient care,
    emergency room care, physician services, prescription drug
    coverage, durable medical equipment, home health care, skilled
    nursing care, rehabilitation services, hospice services,
    emergency medical transportation, and such other terms as the
    Secretary determines are important to define so that consumers
    may compare the medical benefits offered by health insurance and
    understand the extent of those medical benefits (or exceptions
    to those benefits).

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

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

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

    ``(a) Quality Reporting.--
    ``(1) In general.--Not later than 2 years after the date of
    enactment of the Patient Protection and Affordable Care Act, the
    Secretary, in consultation with experts in health care quality
    and stakeholders, shall develop reporting requirements for use
    by a group health plan, and a health insurance issuer offering
    group or individual health insurance coverage, with respect to
    plan or coverage benefits and health care provider reimbursement
    structures that--
    ``(A) improve health outcomes through the
    implementation of activities such as quality reporting,
    effective case management, care coordination, chronic
    disease management, and medication and care compliance
    initiatives, including through the use of the medical
    homes model as defined for purposes of section 3602 of
    the Patient Protection and Affordable Care Act, for
    treatment or services under the plan or coverage;
    ``(B) implement activities to prevent hospital
    readmissions through a comprehensive program for
    hospital discharge that includes patient-centered
    education and counseling, comprehensive discharge
    planning, and post discharge reinforcement by an
    appropriate health care professional;
    ``(C) implement activities to improve patient safety
    and reduce medical errors through the appropriate use of
    best clinical practices, evidence based medicine, and
    health information technology under the plan or
    coverage; and
    ``(D) implement wellness and health promotion
    activities.
    ``(2) Reporting requirements.--

    [[Page 136]]

    ``(A) In general.--A group health plan and a health
    insurance issuer offering group or individual health
    insurance coverage shall annually submit to the
    Secretary, and to enrollees under the plan or coverage,
    a report on whether the benefits under the plan or
    coverage satisfy the elements described in subparagraphs
    (A) through (D) of paragraph (1).
    ``(B) Timing of reports.--A report under
    subparagraph (A) shall be made available to an enrollee
    under the plan or coverage during each open enrollment
    period.
    ``(C) Availability of reports.--The Secretary shall
    make reports submitted under subparagraph (A) available
    to the public through an Internet website.
    ``(D) Penalties.--In developing the reporting
    requirements under paragraph (1), the Secretary may
    develop and impose appropriate penalties for non-
    compliance with such requirements.
    ``(E) Exceptions.--In developing the reporting
    requirements under paragraph (1), the Secretary may
    provide for exceptions to such requirements for group
    health plans and health insurance issuers that
    substantially meet the goals of this section.

    ``(b) Wellness and Prevention Programs.--For purposes of subsection
    (a)(1)(D), wellness and health promotion activities may include
    personalized wellness and prevention services, which are coordinated,
    maintained or delivered by a health care provider, a wellness and
    prevention plan manager, or a health, wellness or prevention services
    organization that conducts health risk assessments or offers ongoing
    face-to-face, telephonic or web-based intervention efforts for each of
    the program's participants, and which may include the following wellness
    and prevention efforts:
    ``(1) Smoking cessation.
    ``(2) Weight management.
    ``(3) Stress management.
    ``(4) Physical fitness.
    ``(5) Nutrition.
    ``(6) Heart disease prevention.
    ``(7) Healthy lifestyle support.
    ``(8) Diabetes prevention.

    ``(c) Regulations.--Not <> later than 2 years after
    the date of enactment of the Patient Protection and Affordable Care Act,
    the Secretary shall promulgate regulations that provide criteria for
    determining whether a reimbursement structure is described in subsection
    (a).

    ``(d) Study and Report.--Not later than 180 days after the date on
    which regulations are promulgated under subsection (c), the Government
    Accountability Office shall review such regulations and conduct a study
    and submit to the Committee on Health, Education, Labor, and Pensions of
    the Senate and the Committee on Energy and Commerce of the House of
    Representatives a report regarding the impact the activities under this
    section have had on the quality and cost of health care.

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

    ``(a) Clear <> Accounting for Costs.--A health
    insurance issuer offering group or individual health insurance coverage
    shall, with

    [[Page 137]]

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

    The <> Secretary shall make
    reports received under this section available to the public on the
    Internet website of the Department of Health and Human Services.

    ``(b) Ensuring That Consumers Receive Value for Their Premium
    Payments.--
    ``(1) Requirement to provide value for premium payments.--A
    health insurance issuer offering group or individual health
    insurance coverage shall, with respect to each plan year,
    provide an annual rebate to each enrollee under such coverage,
    on a pro rata basis, in an amount that is equal to the amount by
    which premium revenue expended by the issuer on activities
    described in subsection (a)(3) exceeds--
    ``(A) with respect to a health insurance issuer
    offering coverage in the group market, 20 percent, or
    such lower percentage as a State may by regulation
    determine; or
    ``(B) with respect to a health insurance issuer
    offering coverage in the individual market, 25 percent,
    or such lower percentage as a State may by regulation
    determine, except that such percentage shall be adjusted
    to the extent the Secretary determines that the
    application of such percentage with a State may
    destabilize the existing individual market in such
    State.
    ``(2) Consideration in setting percentages.--In determining
    the percentages under paragraph (1), a State shall seek to
    ensure adequate participation by health insurance issuers,
    competition in the health insurance market in the State, and
    value for consumers so that premiums are used for clinical
    services and quality improvements.
    ``(3) Termination.--The provisions of this subsection shall
    have no force or effect after December 31, 2013.

    ``(c) Standard Hospital Charges.--Each hospital operating within the
    United States shall for each year establish (and update) and make public
    (in accordance with guidelines developed by the Secretary) a list of the
    hospital's standard charges for items and services provided by the
    hospital, including for diagnosis-related groups established under
    section 1886(d)(4) of the Social Security Act.
    ``(d) Definitions.--The Secretary, in consultation with the National
    Association of Insurance Commissions, shall establish uniform
    definitions for the activities reported under subsection (a).

    ``SEC. 2719. <> APPEALS PROCESS.

    ``A group health plan and a health insurance issuer offering group
    or individual health insurance coverage shall implement an effective
    appeals process for appeals of coverage determinations and claims, under
    which the plan or issuer shall, at a minimum--
    ``(1) have in effect an internal claims appeal process;

    [[Page 138]]

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

    SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION.

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

    ``SEC. 2793. <> HEALTH INSURANCE CONSUMER
    INFORMATION.

    ``(a) In <> General.--The Secretary shall award
    grants to States to enable such States (or the Exchanges operating in
    such States) to establish, expand, or provide support for--
    ``(1) offices of health insurance consumer assistance; or
    ``(2) health insurance ombudsman programs.

    ``(b) Eligibility.--
    ``(1) In general.--To be eligible to receive a grant, a
    State shall designate an independent office of health insurance
    consumer assistance, or an ombudsman, that, directly or in
    coordination with State health insurance regulators and consumer
    assistance organizations, receives and responds to inquiries and
    complaints concerning health insurance coverage with respect to
    Federal health insurance requirements and under State law.
    ``(2) Criteria.--A State that receives a grant under this
    section shall comply with criteria established by the Secretary
    for carrying out activities under such grant.

    ``(c) Duties.--The office of health insurance consumer assistance or
    health insurance ombudsman shall--
    ``(1) assist with the filing of complaints and appeals,
    including filing appeals with the internal appeal or grievance
    process of the group health plan or health insurance issuer
    involved and providing information about the external appeal
    process;
    ``(2) collect, track, and quantify problems and inquiries
    encountered by consumers;
    ``(3) educate consumers on their rights and responsibilities
    with respect to group health plans and health insurance
    coverage;
    ``(4) assist consumers with enrollment in a group health
    plan or health insurance coverage by providing information,
    referral, and assistance; and
    ``(5) resolve problems with obtaining premium tax credits
    under section 36B of the Internal Revenue Code of 1986.

    [[Page 139]]

    ``(d) Data Collection.--As a condition of receiving a grant under
    subsection (a), an office of health insurance consumer assistance or
    ombudsman program shall be required to collect and report data to the
    Secretary on the types of problems and inquiries encountered by
    consumers. The Secretary shall utilize such data to identify areas where
    more enforcement action is necessary and shall share such information
    with State insurance regulators, the Secretary of Labor, and the
    Secretary of the Treasury for use in the enforcement activities of such
    agencies.
    ``(e) Funding.--
    ``(1) Initial funding.--There is hereby appropriated to the
    Secretary, out of any funds in the Treasury not otherwise
    appropriated, $30,000,000 for the first fiscal year for which
    this section applies to carry out this section. Such amount
    shall remain available without fiscal year limitation.
    ``(2) Authorization for subsequent years.--There is
    authorized to be appropriated to the Secretary for each fiscal
    year following the fiscal year described in paragraph (1), such
    sums as may be necessary to carry out this section.''.

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

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

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

    ``(a) Initial Premium Review Process.--
    ``(1) In <> general.--The Secretary,
    in conjunction with States, shall establish a process for the
    annual review, beginning with the 2010 plan year and subject to
    subsection (b)(2)(A), of unreasonable increases in premiums for
    health insurance coverage.
    ``(2) Justification and disclosure.--The process established
    under paragraph (1) shall require health insurance issuers to
    submit to the Secretary and the relevant State a justification
    for an unreasonable premium increase prior to the implementation
    of the <> increase. Such issuers shall
    prominently post such information on their Internet websites.
    The Secretary shall ensure the public disclosure of information
    on such increases and justifications for all health insurance
    issuers.

    ``(b) Continuing Premium Review Process.--
    ``(1) Informing secretary of premium increase patterns.--As
    a condition of receiving a grant under subsection (c)(1), a
    State, through its Commissioner of Insurance, shall--
    ``(A) provide the Secretary with information about
    trends in premium increases in health insurance coverage
    in premium rating areas in the State; and
    ``(B) make recommendations, as appropriate, to the
    State Exchange about whether particular health insurance
    issuers should be excluded from participation in the
    Exchange based on a pattern or practice of excessive or
    unjustified premium increases.
    ``(2) Monitoring by secretary of premium increases.--
    ``(A) In general.--Beginning <> with plan years beginning in 2014, the
    Secretary, in conjunction with the States

    [[Page 140]]

    and consistent with the provisions of subsection (a)(2),
    shall monitor premium increases of health insurance
    coverage offered through an Exchange and outside of an
    Exchange.
    ``(B) Consideration in opening exchange.--In
    determining under section 1312(f)(2)(B) of the Patient
    Protection and Affordable Care Act whether to offer
    qualified health plans in the large group market through
    an Exchange, the State shall take into account any
    excess of premium growth outside of the Exchange as
    compared to the rate of such growth inside the Exchange.

    ``(c) Grants in Support of Process.--
    ``(1) Premium review grants during 2010 through 2014.--The
    Secretary shall carry out a program to award grants to States
    during the 5-year period beginning with fiscal year 2010 to
    assist such States in carrying out subsection (a), including--
    ``(A) in reviewing and, if appropriate under State
    law, approving premium increases for health insurance
    coverage; and
    ``(B) in providing information and recommendations
    to the Secretary under subsection (b)(1).
    ``(2) Funding.--
    ``(A) In general.--Out of all funds in the Treasury
    not otherwise appropriated, there are appropriated to
    the Secretary $250,000,000, to be available for
    expenditure for grants under paragraph (1) and
    subparagraph (B).
    ``(B) Further availability for insurance reform and
    consumer protection.--If the amounts appropriated under
    subparagraph (A) are not fully obligated under grants
    under paragraph (1) by the end of fiscal year 2014, any
    remaining funds shall remain available to the Secretary
    for grants to States for planning and implementing the
    insurance reforms and consumer protections under part A.
    ``(C) Allocation.--The Secretary shall establish a
    formula for determining the amount of any grant to a
    State under this subsection. Under such formula--
    ``(i) the Secretary shall consider the number
    of plans of health insurance coverage offered in
    each State and the population of the State; and
    ``(ii) no State qualifying for a grant under
    paragraph (1) shall receive less than $1,000,000,
    or more than $5,000,000 for a grant year.''.

    SEC. 1004. <> EFFECTIVE DATES.

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

    [[Page 141]]

    Subtitle B--Immediate Actions to Preserve and Expand Coverage

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

    (a) In General.--Not <> later than 90
    days after the date of enactment of this Act, the Secretary shall
    establish a temporary high risk health insurance pool program to provide
    health insurance coverage for eligible individuals during the period
    beginning on the date on which such program is established and ending on
    January 1, 2014.

    (b) Administration.--
    (1) In general.--The Secretary may carry out the program
    under this section directly or through contracts to eligible
    entities.
    (2) Eligible entities.--To be eligible for a contract under
    paragraph (1), an entity shall--
    (A) be a State or nonprofit private entity;
    (B) submit to the Secretary an application at such
    time, in such manner, and containing such information as
    the Secretary may require; and
    (C) agree to utilize contract funding to establish
    and administer a qualified high risk pool for eligible
    individuals.
    (3) Maintenance of effort.--To be eligible to enter into a
    contract with the Secretary under this subsection, a State shall
    agree not to reduce the annual amount the State expended for the
    operation of one or more State high risk pools during the year
    preceding the year in which such contract is entered into.

    (c) Qualified High Risk Pool.--
    (1) In general.--Amounts made available under this section
    shall be used to establish a qualified high risk pool that meets
    the requirements of paragraph (2).
    (2) Requirements.--A qualified high risk pool meets the
    requirements of this paragraph if such pool--
    (A) provides to all eligible individuals health
    insurance coverage that does not impose any preexisting
    condition exclusion with respect to such coverage;
    (B) provides health insurance coverage--
    (i) in which the issuer's share of the total
    allowed costs of benefits provided under such
    coverage is not less than 65 percent of such
    costs; and
    (ii) that has an out of pocket limit not
    greater than the applicable amount described in
    section 223(c)(2) of the Internal Revenue Code of
    1986 for the year involved, except that the
    Secretary may modify such limit if necessary to
    ensure the pool meets the actuarial value limit
    under clause (i);
    (C) ensures that with respect to the premium rate
    charged for health insurance coverage offered to
    eligible individuals through the high risk pool, such
    rate shall--
    (i) except as provided in clause (ii), vary
    only as provided for under section 2701 of the
    Public Health Service Act (as amended by this Act
    and notwithstanding the date on which such
    amendments take effect);

    [[Page 142]]

    (ii) vary on the basis of age by a factor of
    not greater than 4 to 1; and
    (iii) be established at a standard rate for a
    standard population; and
    (D) meets any other requirements determined
    appropriate by the Secretary.

    (d) Eligible Individual.--An individual shall be deemed to be an
    eligible individual for purposes of this section if such individual--
    (1) is a citizen or national of the United States or is
    lawfully present in the United States (as determined in
    accordance with section 1411);
    (2) has not been covered under creditable coverage (as
    defined in section 2701(c)(1) of the Public Health Service Act
    as in effect on the date of enactment of this Act) during the 6-
    month period prior to the date on which such individual is
    applying for coverage through the high risk pool; and
    (3) has a pre-existing condition, as determined in a manner
    consistent with guidance issued by the Secretary.

    (e) Protection Against Dumping Risk by Insurers.--
    (1) In general.--The <> Secretary shall
    establish criteria for determining whether health insurance
    issuers and employment-based health plans have discouraged an
    individual from remaining enrolled in prior coverage based on
    that individual's health status.
    (2) Sanctions.--An issuer or employment-based health plan
    shall be responsible for reimbursing the program under this
    section for the medical expenses incurred by the program for an
    individual who, based on criteria established by the Secretary,
    the Secretary finds was encouraged by the issuer to disenroll
    from health benefits coverage prior to enrolling in coverage
    through the program. The criteria shall include at least the
    following circumstances:
    (A) In the case of prior coverage obtained through
    an employer, the provision by the employer, group health
    plan, or the issuer of money or other financial
    consideration for disenrolling from the coverage.
    (B) In the case of prior coverage obtained directly
    from an issuer or under an employment-based health
    plan--
    (i) the provision by the issuer or plan of
    money or other financial consideration for
    disenrolling from the coverage; or
    (ii) in the case of an individual whose
    premium for the prior coverage exceeded the
    premium required by the program (adjusted based on
    the age factors applied to the prior coverage)--
    (I) the prior coverage is a policy
    that is no longer being actively
    marketed (as defined by the Secretary)
    by the issuer; or
    (II) the prior coverage is a policy
    for which duration of coverage form
    issue or health status are factors that
    can be considered in determining
    premiums at renewal.
    (3) Construction.--Nothing in this subsection shall be
    construed as constituting exclusive remedies for violations of
    criteria established under paragraph (1) or as preventing States

    [[Page 143]]

    from applying or enforcing such paragraph or other provisions
    under law with respect to health insurance issuers.

    (f) Oversight.--The Secretary shall establish--
    (1) an appeals process to enable individuals to appeal a
    determination under this section; and
    (2) procedures to protect against waste, fraud, and abuse.

    (g) Funding; Termination of Authority.--
    (1) In general.--There is appropriated to the Secretary, out
    of any moneys in the Treasury not otherwise appropriated,
    $5,000,000,000 to pay claims against (and the administrative
    costs of) the high risk pool under this section that are in
    excess of the amount of premiums collected from eligible
    individuals enrolled in the high risk pool. Such funds shall be
    available without fiscal year limitation.
    (2) Insufficient funds.--If the Secretary estimates for any
    fiscal year that the aggregate amounts available for the payment
    of the expenses of the high risk pool will be less than the
    actual amount of such expenses, the Secretary shall make such
    adjustments as are necessary to eliminate such deficit.
    (3) Termination of authority.--
    (A) In general.--Except as provided in subparagraph
    (B), coverage of eligible individuals under a high risk
    pool in a State shall terminate on January 1, 2014.
    (B) Transition <> to exchange.--
    The Secretary shall develop procedures to provide for
    the transition of eligible individuals enrolled in
    health insurance coverage offered through a high risk
    pool established under this section into qualified
    health plans offered through an Exchange. Such
    procedures shall ensure that there is no lapse in
    coverage with respect to the individual and may extend
    coverage after the termination of the risk pool
    involved, if the Secretary determines necessary to avoid
    such a lapse.
    (4) Limitations.--The Secretary has the authority to stop
    taking applications for participation in the program under this
    section to comply with the funding limitation provided for in
    paragraph (1).
    (5) Relation to state laws.--The standards established under
    this section shall supersede any State law or regulation (other
    than State licensing laws or State laws relating to plan
    solvency) with respect to qualified high risk pools which are
    established in accordance with this section.

    SEC. 1102. <> REINSURANCE FOR EARLY RETIREES.

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

    [[Page 144]]

    whether self-funded, or delivered through the purchase
    of insurance or otherwise.
    (B) Employment-based plan.--The term ``employment-
    based plan'' means a group health benefits plan that--
    (i) is--
    (I) maintained by one or more
    current or former employers (including
    without limitation any State or local
    government or political subdivision
    thereof), employee organization, a
    voluntary employees' beneficiary
    association, or a committee or board of
    individuals appointed to administer such
    plan; or
    (II) a multiemployer plan (as
    defined in section 3(37) of the Employee
    Retirement Income Security Act of 1974);
    and
    (ii) provides health benefits to early
    retirees.
    (C) Early retirees.--The term ``early retirees''
    means individuals who are age 55 and older but are not
    eligible for coverage under title XVIII of the Social
    Security Act, and who are not active employees of an
    employer maintaining, or currently contributing to, the
    employment-based plan or of any employer that has made
    substantial contributions to fund such plan.

    (b) Participation.--
    (1) Employment-based plan eligibility.--A participating
    employment-based plan is an employment-based plan that--
    (A) meets the requirements of paragraph (2) with
    respect to health benefits provided under the plan; and
    (B) submits to the Secretary an application for
    participation in the program, at such time, in such
    manner, and containing such information as the Secretary
    shall require.
    (2) Employment-based health benefits.--An employment-based
    plan meets the requirements of this paragraph if the plan--
    (A) implements programs and procedures to generate
    cost-savings with respect to participants with chronic
    and high-cost conditions;
    (B) provides documentation of the actual cost of
    medical claims involved; and
    (C) is certified <> by the
    Secretary.

    (c) Payments.--
    (1) Submission of claims.--
    (A) In general.--A participating employment-based
    plan shall submit claims for reimbursement to the
    Secretary which shall contain documentation of the
    actual costs of the items and services for which each
    claim is being submitted.
    (B) Basis for claims.--Claims submitted under
    subparagraph (A) shall be based on the actual amount
    expended by the participating employment-based plan
    involved within the plan year for the health benefits
    provided to an early retiree or the spouse, surviving
    spouse, or dependent of such retiree. In determining the
    amount of a claim for purposes of this subsection, the
    participating

    [[Page 145]]

    employment-based plan shall take into account any
    negotiated price concessions (such as discounts, direct
    or indirect subsidies, rebates, and direct or indirect
    remunerations) obtained by such plan with respect to
    such health benefit. For purposes of determining the
    amount of any such claim, the costs paid by the early
    retiree or the retiree's spouse, surviving spouse, or
    dependent in the form of deductibles, co-payments, or
    co-insurance shall be included in the amounts paid by
    the participating employment-based plan.
    (2) Program payments.--If the Secretary determines that a
    participating employment-based plan has submitted a valid claim
    under paragraph (1), the Secretary shall reimburse such plan for
    80 percent of that portion of the costs attributable to such
    claim that exceed $15,000, subject to the limits contained in
    paragraph (3).
    (3) Limit.--To be eligible for reimbursement under the
    program, a claim submitted by a participating employment-based
    plan shall not be less than $15,000 nor greater than $90,000.
    Such amounts shall be adjusted each fiscal year based on the
    percentage increase in the Medical Care Component of the
    Consumer Price Index for all urban consumers (rounded to the
    nearest multiple of $1,000) for the year involved.
    (4) Use of payments.--Amounts paid to a participating
    employment-based plan under this subsection shall be used to
    lower costs for the plan. Such payments may be used to reduce
    premium costs for an entity described in subsection (a)(2)(B)(i)
    or to reduce premium contributions, co-payments, deductibles,
    co-insurance, or other out-of-pocket costs for plan
    participants. Such payments shall not be used as general
    revenues for an entity described in subsection (a)(2)(B)(i). The
    Secretary shall develop a mechanism to monitor the appropriate
    use of such payments by such entities.
    (5) Payments not treated as income.--Payments received under
    this subsection shall not be included in determining the gross
    income of an entity described in subsection (a)(2)(B)(i) that is
    maintaining or currently contributing to a participating
    employment-based plan.
    (6) Appeals.--The Secretary shall establish--
    (A) an appeals process to permit participating
    employment-based plans to appeal a determination of the
    Secretary with respect to claims submitted under this
    section; and
    (B) procedures to protect against fraud, waste, and
    abuse under the program.

    (d) Audits.--The Secretary shall conduct annual audits of claims
    data submitted by participating employment-based plans under this
    section to ensure that such plans are in compliance with the
    requirements of this section.
    (e) Funding.--There is appropriated to the Secretary, out of any
    moneys in the Treasury not otherwise appropriated, $5,000,000,000 to
    carry out the program under this section. Such funds shall be available
    without fiscal year limitation.
    (f) Limitation.--The Secretary has the authority to stop taking
    applications for participation in the program based on the availability
    of funding under subsection (e).

    [[Page 146]]

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

    (a) Internet Portal to Affordable Coverage Options.--
    (1) Immediate establishment.--Not later than July 1, 2010,
    the Secretary, in consultation with the States, shall establish
    a mechanism, including an Internet website, through which a
    resident of any State may identify affordable health insurance
    coverage options in that State.
    (2) Connecting to affordable coverage.--An Internet website
    established under paragraph (1) shall, to the extent
    practicable, provide ways for residents of any State to receive
    information on at least the following coverage options:
    (A) Health insurance coverage offered by health
    insurance issuers, other than coverage that provides
    reimbursement only for the treatment or mitigation of--
    (i) a single disease or condition; or
    (ii) an unreasonably limited set of diseases
    or conditions (as determined by the Secretary);
    (B) Medicaid coverage under title XIX of the Social
    Security Act.
    (C) Coverage under title XXI of the Social Security
    Act.
    (D) A State health benefits high risk pool, to the
    extent that such high risk pool is offered in such
    State; and
    (E) Coverage under a high risk pool under section
    1101.

    (b) Enhancing Comparative Purchasing Options.--
    (1) In general.--Not later <> than 60 days after the date of enactment of this Act,
    the Secretary shall develop a standardized format to be used for
    the presentation of information relating to the coverage options
    described in subsection (a)(2). Such format shall, at a minimum,
    require the inclusion of information on the percentage of total
    premium revenue expended on nonclinical costs (as reported under
    section 2718(a) of the Public Health Service Act), eligibility,
    availability, premium rates, and cost sharing with respect to
    such coverage options and be consistent with the standards
    adopted for the uniform explanation of coverage as provided for
    in section 2715 of the Public Health Service Act.
    (2) Use of format.--The Secretary shall utilize the format
    developed under paragraph (1) in compiling information
    concerning coverage options on the Internet website established
    under subsection (a).

    (c) Authority To Contract.--The Secretary may carry out this section
    through contracts entered into with qualified entities.

    SEC. 1104. ADMINISTRATIVE SIMPLIFICATION.

    (a) Purpose of Administrative Simplification.--Section 261 of the
    Health Insurance Portability and Accountability Act of 1996 (42 U.S.C.
    1320d note) is amended--
    (1) by inserting ``uniform'' before ``standards''; and
    (2) by inserting ``and to reduce the clerical burden on
    patients, health care providers, and health plans'' before the
    period at the end.

    (b) Operating Rules for Health Information Transactions.--

    [[Page 147]]

    (1) Definition of operating rules.--Section 1171 of the
    Social Security Act (42 U.S.C. 1320d) is amended by adding at
    the end the following:
    ``(9) Operating rules.--The term `operating rules' means the
    necessary business rules and guidelines for the electronic
    exchange of information that are not defined by a standard or
    its implementation specifications as adopted for purposes of
    this part.''.
    (2) Transaction standards; operating rules and compliance.--
    Section 1173 of the Social Security Act (42 U.S.C. 1320d-2) is
    amended--
    (A) in subsection (a)(2), by adding at the end the
    following new subparagraph:
    ``(J) Electronic funds transfers.'';
    (B) in subsection (a), by adding at the end the
    following new paragraph:
    ``(4) Requirements for financial and administrative
    transactions.--
    ``(A) In general.--The standards and associated
    operating rules adopted by the Secretary shall--
    ``(i) to the extent feasible and appropriate,
    enable determination of an individual's
    eligibility and financial responsibility for
    specific services prior to or at the point of
    care;
    ``(ii) be comprehensive, requiring minimal
    augmentation by paper or other communications;
    ``(iii) provide for timely acknowledgment,
    response, and status reporting that supports a
    transparent claims and denial management process
    (including adjudication and appeals); and
    ``(iv) describe all data elements (including
    reason and remark codes) in unambiguous terms,
    require that such data elements be required or
    conditioned upon set values in other fields, and
    prohibit additional conditions (except where
    necessary to implement State or Federal law, or to
    protect against fraud and abuse).
    ``(B) Reduction of clerical burden.--In adopting
    standards and operating rules for the transactions
    referred to under paragraph (1), the Secretary shall
    seek to reduce the number and complexity of forms
    (including paper and electronic forms) and data entry
    required by patients and providers.''; and
    (C) by adding at the end the following new
    subsections:

    ``(g) Operating Rules.--
    ``(1) In general.--The Secretary shall adopt a single set of
    operating rules for each transaction referred to under
    subsection (a)(1) with the goal of creating as much uniformity
    in the implementation of the electronic standards as possible.
    Such operating rules shall be consensus-based and reflect the
    necessary business rules affecting health plans and health care
    providers and the manner in which they operate pursuant to
    standards issued under Health Insurance Portability and
    Accountability Act of 1996.
    ``(2) Operating rules development.--In adopting operating
    rules under this subsection, the Secretary shall consider
    recommendations for operating rules developed by a qualified
    nonprofit entity that meets the following requirements:

    [[Page 148]]

    ``(A) The entity focuses its mission on
    administrative simplification.
    ``(B) The entity demonstrates a multi-stakeholder
    and consensus-based process for development of operating
    rules, including representation by or participation from
    health plans, health care providers, vendors, relevant
    Federal agencies, and other standard development
    organizations.
    ``(C) The entity has a public set of guiding
    principles that ensure the operating rules and process
    are open and transparent, and supports nondiscrimination
    and conflict of interest policies that demonstrate a
    commitment to open, fair, and nondiscriminatory
    practices.
    ``(D) The entity builds on the transaction standards
    issued under Health Insurance Portability and
    Accountability Act of 1996.
    ``(E) The entity allows for public review and
    updates of the operating rules.
    ``(3) Review and recommendations.--The National Committee on
    Vital and Health Statistics shall--
    ``(A) advise the Secretary as to whether a nonprofit
    entity meets the requirements under paragraph (2);
    ``(B) review the operating rules developed and
    recommended by such nonprofit entity;
    ``(C) determine whether such operating rules
    represent a consensus view of the health care
    stakeholders and are consistent with and do not conflict
    with other existing standards;
    ``(D) evaluate whether such operating rules are
    consistent with electronic standards adopted for health
    information technology; and
    ``(E) submit to the Secretary a recommendation as to
    whether the Secretary should adopt such operating rules.
    ``(4) Implementation.--
    ``(A) In general.--
    The <> Secretary shall adopt
    operating rules under this subsection, by regulation in
    accordance with subparagraph (C), following
    consideration of the operating rules developed by the
    non-profit entity described in paragraph (2) and the
    recommendation submitted by the National Committee on
    Vital and Health Statistics under paragraph (3)(E) and
    having ensured consultation with providers.
    ``(B) Adoption <> requirements;
    effective dates.--
    ``(i) Eligibility for a health plan and health
    claim status.--The set of operating rules for
    eligibility for a health plan and health claim
    status transactions shall be adopted not later
    than July 1, 2011, in a manner ensuring that such
    operating rules are effective not later than
    January 1, 2013, and may allow for the use of a
    machine readable identification card.
    ``(ii) Electronic funds transfers and health
    care payment and remittance advice.--The set of
    operating rules for electronic funds transfers and
    health care payment and remittance advice
    transactions shall--
    ``(I) allow for automated
    reconciliation of the electronic payment
    with the remittance advice; and

    [[Page 149]]

    ``(II) be adopted not later than
    July 1, 2012, in a manner ensuring that
    such operating rules are effective not
    later than January 1, 2014.
    ``(iii) Health claims or equivalent encounter
    information, enrollment and disenrollment in a
    health plan, health plan premium payments,
    referral certification and authorization.--The set
    of operating rules for health claims or equivalent
    encounter information, enrollment and
    disenrollment in a health plan, health plan
    premium payments, and referral certification and
    authorization transactions shall be adopted not
    later than July 1, 2014, in a manner ensuring that
    such operating rules are effective not later than
    January 1, 2016.
    ``(C) Expedited rulemaking.--The Secretary shall
    promulgate an interim final rule applying any standard
    or operating rule recommended by the National Committee
    on Vital and Health Statistics pursuant to paragraph
    (3). The Secretary <> shall
    accept and consider public comments on any interim final
    rule published under this subparagraph for 60 days after
    the date of such publication.

    ``(h) Compliance.--
    ``(1) Health <> plan certification.--
    ``(A) Eligibility for a health plan, health claim
    status, electronic funds transfers, health care payment
    and remittance advice.--
    Not <> later than December 31,
    2013, a health plan shall file a statement with the
    Secretary, in such form as the Secretary may require,
    certifying that the data and information systems for
    such plan are in compliance with any applicable
    standards (as described under paragraph (7) of section
    1171) and associated operating rules (as described under
    paragraph (9) of such section) for electronic funds
    transfers, eligibility for a health plan, health claim
    status, and health care payment and remittance advice,
    respectively.
    ``(B) Health claims or equivalent encounter
    information, enrollment and disenrollment in a health
    plan, health plan premium payments, health claims
    attachments, referral certification and authorization.--
    Not later than December 31, 2015, a health plan shall
    file a statement with the Secretary, in such form as the
    Secretary may require, certifying that the data and
    information systems for such plan are in compliance with
    any applicable standards and associated operating rules
    for health claims or equivalent encounter information,
    enrollment and disenrollment in a health plan, health
    plan premium payments, health claims attachments, and
    referral certification and authorization, respectively.
    A health plan shall provide the same level of
    documentation to certify compliance with such
    transactions as is required to certify compliance with
    the transactions specified in subparagraph (A).
    ``(2) Documentation of compliance.--A health plan shall
    provide the Secretary, in such form as the Secretary may
    require, with adequate documentation of compliance with the
    standards and operating rules described under paragraph (1). A
    health plan shall not be considered to have provided adequate

    [[Page 150]]

    documentation and shall not be certified as being in compliance
    with such standards, unless the health plan--
    ``(A) demonstrates to the Secretary that the plan
    conducts the electronic transactions specified in
    paragraph (1) in a manner that fully complies with the
    regulations of the Secretary; and
    ``(B) provides documentation showing that the plan
    has completed end-to-end testing for such transactions
    with their partners, such as hospitals and physicians.
    ``(3) Service contracts.--A health plan shall be required to
    ensure that any entities that provide services pursuant to a
    contract with such health plan shall comply with any applicable
    certification and compliance requirements (and provide the
    Secretary with adequate documentation of such compliance) under
    this subsection.
    ``(4) Certification by outside entity.--The Secretary may
    designate independent, outside entities to certify that a health
    plan has complied with the requirements under this subsection,
    provided that the certification standards employed by such
    entities are in accordance with any standards or operating rules
    issued by the Secretary.
    ``(5) Compliance with revised standards and operating
    rules.--
    ``(A) In general.--A <> health
    plan (including entities described under paragraph (3))
    shall file a statement with the Secretary, in such form
    as the Secretary may require, certifying that the data
    and information systems for such plan are in compliance
    with any applicable revised standards and associated
    operating rules under this subsection for any interim
    final rule promulgated by the Secretary under subsection
    (i) that--
    ``(i) amends any standard or operating rule
    described under paragraph (1) of this subsection;
    or
    ``(ii) establishes a standard (as described
    under subsection (a)(1)(B)) or associated
    operating rules (as described under subsection
    (i)(5)) for any other financial and administrative
    transactions.
    ``(B) Date of compliance.--A health plan shall
    comply with such requirements not later than the
    effective date of the applicable standard or operating
    rule.
    ``(6) Audits of health plans.--The Secretary shall conduct
    periodic audits to ensure that health plans (including entities
    described under paragraph (3)) are in compliance with any
    standards and operating rules that are described under paragraph
    (1) or subsection (i)(5).

    ``(i) Review <> and Amendment of Standards and
    Operating Rules.--
    ``(1) Establishment.--Not later than January 1, 2014, the
    Secretary shall establish a review committee (as described under
    paragraph (4)).
    ``(2) Evaluations and reports.--
    ``(A) Hearings.--Not later than April 1, 2014, and
    not less than biennially thereafter, the Secretary,
    acting through the review committee, shall conduct
    hearings to evaluate and review the adopted standards
    and operating rules established under this section.

    [[Page 151]]

    ``(B) Report.--Not later than July 1, 2014, and not
    less than biennially thereafter, the review committee
    shall provide recommendations for updating and improving
    such standards and operating rules. The review committee
    shall recommend a single set of operating rules per
    transaction standard and maintain the goal of creating
    as much uniformity as possible in the implementation of
    the electronic standards.
    ``(3) Interim final rulemaking.--
    ``(A) In general.--Any recommendations to amend
    adopted standards and operating rules that have been
    approved by the review committee and reported to the
    Secretary under paragraph (2)(B) shall be adopted by the
    Secretary through promulgation of an interim final rule
    not later than 90 days after receipt of the committee's
    report.
    ``(B) Public comment.--
    ``(i) Public comment period.--The Secretary
    shall accept and consider public comments on any
    interim final rule published under this paragraph
    for 60 days after the date of such publication.
    ``(ii) Effective date.--The effective date of
    any amendment to existing standards or operating
    rules that is adopted through an interim final
    rule published under this paragraph shall be 25
    months following the close of such public comment
    period.
    ``(4) Review committee.--
    ``(A) Definition.--For the purposes of this
    subsection, the term `review committee' means a
    committee chartered by or within the Department of
    Health and Human services that has been designated by
    the Secretary to carry out this subsection, including--
    ``(i) the National Committee on Vital and
    Health Statistics; or
    ``(ii) any appropriate committee as determined
    by the Secretary.
    ``(B) Coordination of hit standards.--In developing
    recommendations under this subsection, the review
    committee shall ensure coordination, as appropriate,
    with the standards that support the certified electronic
    health record technology approved by the Office of the
    National Coordinator for Health Information Technology.
    ``(5) Operating rules for other standards adopted by the
    secretary.--The Secretary shall adopt a single set of operating
    rules (pursuant to the process described under subsection (g))
    for any transaction for which a standard had been adopted
    pursuant to subsection (a)(1)(B).

    ``(j) Penalties.--
    ``(1) Penalty fee.--
    ``(A) In general.--Not <> later
    than April 1, 2014, and annually thereafter, the
    Secretary shall assess a penalty fee (as determined
    under subparagraph (B)) against a health plan that has
    failed to meet the requirements under subsection (h)
    with respect to certification and documentation of
    compliance with--
    ``(i) the standards and associated operating
    rules described under paragraph (1) of such
    subsection; and

    [[Page 152]]

    ``(ii) a standard (as described under
    subsection (a)(1)(B)) and associated operating
    rules (as described under subsection (i)(5)) for
    any other financial and administrative
    transactions.
    ``(B) Fee amount.--Subject to subparagraphs (C),
    (D), and (E), the Secretary shall assess a penalty fee
    against a health plan in the amount of $1 per covered
    life until certification is complete. The penalty shall
    be assessed per person covered by the plan for which its
    data systems for major medical policies are not in
    compliance and shall be imposed against the health plan
    for each day that the plan is not in compliance with the
    requirements under subsection (h).
    ``(C) Additional penalty for misrepresentation.--A
    health plan that knowingly provides inaccurate or
    incomplete information in a statement of certification
    or documentation of compliance under subsection (h)
    shall be subject to a penalty fee that is double the
    amount that would otherwise be imposed under this
    subsection.
    ``(D) Annual fee increase.--The amount of the
    penalty fee imposed under this subsection shall be
    increased on an annual basis by the annual percentage
    increase in total national health care expenditures, as
    determined by the Secretary.
    ``(E) Penalty limit.--A penalty fee assessed against
    a health plan under this subsection shall not exceed, on
    an annual basis--
    ``(i) an amount equal to $20 per covered life
    under such plan; or
    ``(ii) an amount equal to $40 per covered life
    under the plan if such plan has knowingly provided
    inaccurate or incomplete information (as described
    under subparagraph (C)).
    ``(F) Determination of covered individuals.--The
    Secretary shall determine the number of covered lives
    under a health plan based upon the most recent
    statements and filings that have been submitted by such
    plan to the Securities and Exchange Commission.
    ``(2) Notice and dispute procedure.--The Secretary shall
    establish a procedure for assessment of penalty fees under this
    subsection that provides a health plan with reasonable notice
    and a dispute resolution procedure prior to provision of a
    notice of assessment by the Secretary of the Treasury (as
    described under paragraph (4)(B)).
    ``(3) Penalty fee report.--Not later than May 1, 2014, and
    annually thereafter, the Secretary shall provide the Secretary
    of the Treasury with a report identifying those health plans
    that have been assessed a penalty fee under this subsection.
    ``(4) Collection of penalty fee.--
    ``(A) In general.--The Secretary of the Treasury,
    acting through the Financial Management Service, shall
    administer the collection of penalty fees from health
    plans that have been identified by the Secretary in the
    penalty fee report provided under paragraph (3).
    ``(B) Notice.--Not <> later than
    August 1, 2014, and annually thereafter, the Secretary
    of the Treasury shall

    [[Page 153]]

    provide notice to each health plan that has been
    assessed a penalty fee by the Secretary under this
    subsection. Such notice shall include the amount of the
    penalty fee assessed by the Secretary and the due date
    for payment of such fee to the Secretary of the Treasury
    (as described in subparagraph (C)).
    ``(C) Payment due date.--Payment by a health plan
    for a penalty fee assessed under this subsection shall
    be made to the Secretary of the Treasury not later than
    November 1, 2014, and annually thereafter.
    ``(D) Unpaid penalty fees.--Any amount of a penalty
    fee assessed against a health plan under this subsection
    for which payment has not been made by the due date
    provided under subparagraph (C) shall be--
    ``(i) increased by the interest accrued on
    such amount, as determined pursuant to the
    underpayment rate established under section 6621
    of the Internal Revenue Code of 1986; and
    ``(ii) treated as a past-due, legally
    enforceable debt owed to a Federal agency for
    purposes of section 6402(d) of the Internal
    Revenue Code of 1986.
    ``(E) Administrative fees.--Any fee charged or
    allocated for collection activities conducted by the
    Financial Management Service will be passed on to a
    health plan on a pro-rata basis and added to any penalty
    fee collected from the plan.''.

    (c) Promulgation <> of Rules.--
    (1) Unique health plan identifier.--The Secretary shall
    promulgate a final rule to establish a unique health plan
    identifier (as described in section 1173(b) of the Social
    Security Act (42 U.S.C. 1320d-2(b))) based on the input of the
    National Committee on Vital and Health <> Statistics. The Secretary may do so on an interim final
    basis and such rule shall be effective not later than October 1,
    2012.
    (2) Electronic funds transfer.--The Secretary shall
    promulgate a final rule to establish a standard for electronic
    funds transfers (as described in section 1173(a)(2)(J) of the
    Social Security Act, as added by subsection
    (b)(2)(A)). <> The Secretary
    may do so on an interim final basis and shall adopt such
    standard not later than January 1, 2012, in a manner ensuring
    that such standard is effective not later than January 1, 2014.
    (3) Health claims attachments.--The Secretary shall
    promulgate a final rule to establish a transaction standard and
    a single set of associated operating rules for health claims
    attachments (as described in section 1173(a)(2)(B) of the Social
    Security Act (42 U.S.C. 1320d-2(a)(2)(B))) that is consistent
    with the X12 Version 5010
    transaction <> standards. The
    Secretary may do so on an interim final basis and shall adopt a
    transaction standard and a single set of associated operating
    rules not later than January 1, 2014, in a manner ensuring that
    such standard is effective not later than January 1, 2016.

    (d) Expansion of Electronic Transactions in Medicare.--Section
    1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended--
    (1) in paragraph (23), by striking the ``or'' at the end;

    [[Page 154]]

    (2) in paragraph (24), by striking the period and inserting
    ``; or''; and
    (3) by inserting after paragraph (24) the following new
    paragraph:
    ``(25) not later than January 1, 2014, for which the payment
    is other than by electronic funds transfer (EFT) or an
    electronic remittance in a form as specified in ASC X12 835
    Health Care Payment and Remittance Advice or subsequent
    standard.''.

    SEC. 1105. <> EFFECTIVE DATE.

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

    Subtitle C--Quality Health Insurance Coverage for All Americans

    PART I--HEALTH INSURANCE MARKET REFORMS

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

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

    ``Subpart I--General Reform'';

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

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

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

    [[Page 155]]

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

    ``SEC. 2701. FAIR <> HEALTH INSURANCE PREMIUMS.

    ``(a) Prohibiting Discriminatory Premium Rates.--
    ``(1) In general.--With respect to the premium rate charged
    by a health insurance issuer for health insurance coverage
    offered in the individual or small group market--
    ``(A) such rate shall vary with respect to the
    particular plan or coverage involved only by--
    ``(i) whether such plan or coverage covers an
    individual or family;
    ``(ii) rating area, as established in
    accordance with paragraph (2);
    ``(iii) age, except that such rate shall not
    vary by more than 3 to 1 for adults (consistent
    with section 2707(c)); and
    ``(iv) tobacco use, except that such rate
    shall not vary by more than 1.5 to 1; and
    ``(B) such rate shall not vary with respect to the
    particular plan or coverage involved by any other factor
    not described in subparagraph (A).
    ``(2) Rating area.--
    ``(A) In general.--Each State shall establish 1 or
    more rating areas within that State for purposes of
    applying the requirements of this title.
    ``(B) Secretarial review.--The Secretary shall
    review the rating areas established by each State under
    subparagraph (A) to ensure the adequacy of such areas
    for purposes of carrying out the requirements of this
    title. If the Secretary determines a State's rating
    areas are not adequate, or that a State does not
    establish such areas, the Secretary may establish rating
    areas for that State.
    ``(3) Permissible <> age bands.--The
    Secretary, in consultation with the National Association of
    Insurance Commissioners, shall define the permissible age bands
    for rating purposes under paragraph (1)(A)(iii).
    ``(4) Application of variations based on age or tobacco
    use.--With respect to family coverage under a group health plan
    or health insurance coverage, the rating variations permitted
    under clauses (iii) and (iv) of paragraph (1)(A) shall be
    applied based on the portion of the premium that is attributable
    to each family member covered under the plan or coverage.
    ``(5) Special rule for large group market.--If a State
    permits health insurance issuers that offer coverage in the
    large group market in the State to offer such coverage through
    the State Exchange (as provided for under section 1312(f)(2)(B)

    [[Page 156]]

    of the Patient Protection and Affordable Care Act), the
    provisions of this subsection shall apply to all coverage
    offered in such market in the State.

    ``SEC. 2702. GUARANTEED <> AVAILABILITY OF
    COVERAGE.

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

    ``SEC. 2703. GUARANTEED <> RENEWABILITY OF
    COVERAGE.

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

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

    ``(a) In General.--A group health plan and a health insurance issuer
    offering group or individual health insurance coverage may not establish
    rules for eligibility (including continued eligibility) of any
    individual to enroll under the terms of the plan or coverage based on
    any of the following health status-related factors in relation to the
    individual or a dependent of the individual:
    ``(1) Health status.
    ``(2) Medical condition (including both physical and mental
    illnesses).
    ``(3) Claims experience.
    ``(4) Receipt of health care.
    ``(5) Medical history.
    ``(6) Genetic information.
    ``(7) Evidence of insurability (including conditions arising
    out of acts of domestic violence).
    ``(8) Disability.
    ``(9) Any other health status-related factor determined
    appropriate by the Secretary.

    ``(j) Programs of Health Promotion or Disease Prevention.--
    ``(1) General provisions.--
    ``(A) General rule.--For purposes of subsection
    (b)(2)(B), a program of health promotion or disease
    prevention (referred to in this subsection as a
    `wellness program') shall be a program offered by an
    employer that is designed

    [[Page 157]]

    to promote health or prevent disease that meets the
    applicable requirements of this subsection.
    ``(B) No conditions based on health status factor.--
    If none of the conditions for obtaining a premium
    discount or rebate or other reward for participation in
    a wellness program is based on an individual satisfying
    a standard that is related to a health status factor,
    such wellness program shall not violate this section if
    participation in the program is made available to all
    similarly situated individuals and the requirements of
    paragraph (2) are complied with.
    ``(C) Conditions based on health status factor.--If
    any of the conditions for obtaining a premium discount
    or rebate or other reward for participation in a
    wellness program is based on an individual satisfying a
    standard that is related to a health status factor, such
    wellness program shall not violate this section if the
    requirements of paragraph (3) are complied with.
    ``(2) Wellness programs not subject to requirements.--If
    none of the conditions for obtaining a premium discount or
    rebate or other reward under a wellness program as described in
    paragraph (1)(B) are based on an individual satisfying a
    standard that is related to a health status factor (or if such a
    wellness program does not provide such a reward), the wellness
    program shall not violate this section if participation in the
    program is made available to all similarly situated individuals.
    The following programs shall not have to comply with the
    requirements of paragraph (3) if participation in the program is
    made available to all similarly situated individuals:
    ``(A) A program that reimburses all or part of the
    cost for memberships in a fitness center.
    ``(B) A diagnostic testing program that provides a
    reward for participation and does not base any part of
    the reward on outcomes.
    ``(C) A program that encourages preventive care
    related to a health condition through the waiver of the
    copayment or deductible requirement under group health
    plan for the costs of certain items or services related
    to a health condition (such as prenatal care or well-
    baby visits).
    ``(D) A program that reimburses individuals for the
    costs of smoking cessation programs without regard to
    whether the individual quits smoking.
    ``(E) A program that provides a reward to
    individuals for attending a periodic health education
    seminar.
    ``(3) Wellness programs subject to requirements.--If any of
    the conditions for obtaining a premium discount, rebate, or
    reward under a wellness program as described in paragraph (1)(C)
    is based on an individual satisfying a standard that is related
    to a health status factor, the wellness program shall not
    violate this section if the following requirements are complied
    with:
    ``(A) The reward for the wellness program, together
    with the reward for other wellness programs with respect
    to the plan that requires satisfaction of a standard
    related to a health status factor, shall not exceed 30
    percent of the cost of employee-only coverage under the
    plan. If, in

    [[Page 158]]

    addition to employees or individuals, any class of
    dependents (such as spouses or spouses and dependent
    children) may participate fully in the wellness program,
    such reward shall not exceed 30 percent of the cost of
    the coverage in which an employee or individual and any
    dependents are enrolled. For purposes of this paragraph,
    the cost of coverage shall be determined based on the
    total amount of employer and employee contributions for
    the benefit package under which the employee is (or the
    employee and any dependents are) receiving coverage. A
    reward may be in the form of a discount or rebate of a
    premium or contribution, a waiver of all or part of a
    cost-sharing mechanism (such as deductibles, copayments,
    or coinsurance), the absence of a surcharge, or the
    value of a benefit that would otherwise not be provided
    under the plan. The Secretaries of Labor, Health and
    Human Services, and the Treasury may increase the reward
    available under this subparagraph to up to 50 percent of
    the cost of coverage if the Secretaries determine that
    such an increase is appropriate.
    ``(B) The wellness program shall be reasonably
    designed to promote health or prevent disease. A program
    complies with the preceding sentence if the program has
    a reasonable chance of improving the health of, or
    preventing disease in, participating individuals and it
    is not overly burdensome, is not a subterfuge for
    discriminating based on a health status factor, and is
    not highly suspect in the method chosen to promote
    health or prevent disease.
    ``(C) The plan shall give individuals eligible for
    the program the opportunity to qualify for the reward
    under the program at least once each year.
    ``(D) The full reward under the wellness program
    shall be made available to all similarly situated
    individuals. For such purpose, among other things:
    ``(i) The reward is not available to all
    similarly situated individuals for a period unless
    the wellness program allows--
    ``(I) for a reasonable alternative
    standard (or waiver of the otherwise
    applicable standard) for obtaining the
    reward for any individual for whom, for
    that period, it is unreasonably
    difficult due to a medical condition to
    satisfy the otherwise applicable
    standard; and
    ``(II) for a reasonable alternative
    standard (or waiver of the otherwise
    applicable standard) for obtaining the
    reward for any individual for whom, for
    that period, it is medically inadvisable
    to attempt to satisfy the otherwise
    applicable standard.
    ``(ii) If reasonable under the circumstances,
    the plan or issuer may seek verification, such as
    a statement from an individual's physician, that a
    health status factor makes it unreasonably
    difficult or medically inadvisable for the
    individual to satisfy or attempt to satisfy the
    otherwise applicable standard.

    [[Page 159]]

    ``(E) The plan or issuer involved shall disclose in
    all plan materials describing the terms of the wellness
    program the availability of a reasonable alternative
    standard (or the possibility of waiver of the otherwise
    applicable standard) required under subparagraph (D). If
    plan materials disclose that such a program is
    available, without describing its terms, the disclosure
    under this subparagraph shall not be required.

    ``(k) Existing Programs.--Nothing in this section shall prohibit a
    program of health promotion or disease prevention that was established
    prior to the date of enactment of this section and applied with all
    applicable regulations, and that is operating on such date, from
    continuing to be carried out for as long as such regulations remain in
    effect.
    ``(l) Wellness Program Demonstration Project.--
    ``(1) In general.--Not <> later than July
    1, 2014, the Secretary, in consultation with the Secretary of
    the Treasury and the Secretary of Labor, shall establish a 10-
    State demonstration project under which participating States
    shall apply the provisions of subsection (j) to programs of
    health promotion offered by a health insurance issuer that
    offers health insurance coverage in the individual market in
    such State.
    ``(2) Expansion of demonstration <> project.--If the Secretary, in consultation with the
    Secretary of the Treasury and the Secretary of Labor, determines
    that the demonstration project described in paragraph (1) is
    effective, such Secretaries may, beginning on July 1, 2017
    expand such demonstration project to include additional
    participating States.
    ``(3) Requirements.--
    ``(A) Maintenance of coverage.--The Secretary, in
    consultation with the Secretary of the Treasury and the
    Secretary of Labor, shall not approve the participation
    of a State in the demonstration project under this
    section unless the Secretaries determine that the
    State's project is designed in a manner that--
    ``(i) will not result in any decrease in
    coverage; and
    ``(ii) will not increase the cost to the
    Federal Government in providing credits under
    section 36B of the Internal Revenue Code of 1986
    or cost-sharing assistance under section 1402 of
    the Patient Protection and Affordable Care Act.
    ``(B) Other requirements.--States that participate
    in the demonstration project under this subsection--
    ``(i) may permit premium discounts or rebates
    or the modification of otherwise applicable
    copayments or deductibles for adherence to, or
    participation in, a reasonably designed program of
    health promotion and disease prevention;
    ``(ii) shall ensure that requirements of
    consumer protection are met in programs of health
    promotion in the individual market;
    ``(iii) shall require verification from health
    insurance issuers that offer health insurance
    coverage in the individual market of such State
    that premium discounts--

    [[Page 160]]

    ``(I) do not create undue burdens
    for individuals insured in the
    individual market;
    ``(II) do not lead to cost shifting;
    and
    ``(III) are not a subterfuge for
    discrimination;
    ``(iv) shall ensure that consumer data is
    protected in accordance with the requirements of
    section 264(c) of the Health Insurance Portability
    and Accountability Act of 1996 (42 U.S.C. 1320d-2
    note); and
    ``(v) shall ensure and demonstrate to the
    satisfaction of the Secretary that the discounts
    or other rewards provided under the project
    reflect the expected level of participation in the
    wellness program involved and the anticipated
    effect the program will have on utilization or
    medical claim costs.

    ``(m) Report.--
    ``(1) In general.--Not later than 3 years after the date of
    enactment of the Patient Protection and Affordable Care Act, the
    Secretary, in consultation with the Secretary of the Treasury
    and the Secretary of Labor, shall submit a report to the
    appropriate committees of Congress concerning--
    ``(A) the effectiveness of wellness programs (as
    defined in subsection (j)) in promoting health and
    preventing disease;
    ``(B) the impact of such wellness programs on the
    access to care and affordability of coverage for
    participants and non-participants of such programs;
    ``(C) the impact of premium-based and cost-sharing
    incentives on participant behavior and the role of such
    programs in changing behavior; and
    ``(D) the effectiveness of different types of
    rewards.
    ``(2) Data collection.--In preparing the report described in
    paragraph (1), the Secretaries shall gather relevant information
    from employers who provide employees with access to wellness
    programs, including State and Federal agencies.

    ``(n) Regulations.--Nothing in this section shall be construed as
    prohibiting the Secretaries of Labor, Health and Human Services, or the
    Treasury from promulgating regulations in connection with this section.

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

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

    [[Page 161]]

    ``SEC. 2707. COMPREHENSIVE <> HEALTH INSURANCE
    COVERAGE.

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

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

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

    PART II--OTHER PROVISIONS

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

    (a) No Changes to Existing Coverage.--
    (1) In general.--Nothing in this Act (or an amendment made
    by this Act) shall be construed to require that an individual
    terminate coverage under a group health plan or health insurance
    coverage in which such individual was enrolled on the date of
    enactment of this Act.
    (2) Continuation of coverage.--With respect to a group
    health plan or health insurance coverage in which an individual
    was enrolled on the date of enactment of this Act, this subtitle
    and subtitle A (and the amendments made by such subtitles) shall
    not apply to such plan or coverage, regardless of whether the
    individual renews such coverage after such date of enactment.

    (b) Allowance for Family Members To Join Current Coverage.--With
    respect to a group health plan or health insurance coverage in which an
    individual was enrolled on the date of enactment of this Act and which
    is renewed after such date, family members of such individual shall be
    permitted to enroll in such plan or coverage if such enrollment is
    permitted under the terms of the plan in effect as of such date of
    enactment.
    (c) Allowance for New Employees To Join Current Plan.--A group
    health plan that provides coverage on the date of enactment of this Act
    may provide for the enrolling of new employees (and their families) in
    such plan, and this subtitle and subtitle A (and the amendments made by
    such subtitles) shall not apply with respect to such plan and such new
    employees (and their families).

    [[Page 162]]

    (d) Effect on Collective Bargaining Agreements.--In the case of
    health insurance coverage maintained pursuant to one or more collective
    bargaining agreements between employee representatives and one or more
    employers that was ratified before the date of enactment of this Act,
    the provisions of this subtitle and subtitle A (and the amendments made
    by such subtitles) shall not apply until the date on which the last of
    the collective bargaining agreements relating to the coverage
    terminates. Any coverage amendment made pursuant to a collective
    bargaining agreement relating to the coverage which amends the coverage
    solely to conform to any requirement added by this subtitle or subtitle
    A (or amendments) shall not be treated as a termination of such
    collective bargaining agreement.
    (e) Definition.--In this title, the term ``grandfathered health
    plan'' means any group health plan or health insurance coverage to which
    this section applies.

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

    Any standard or requirement adopted by a State pursuant to this
    title, or any amendment made by this title, shall be applied uniformly
    to all health plans in each insurance market to which the standard and
    requirements apply. The preceding sentence shall also apply to a State
    standard or requirement relating to the standard or requirement required
    by this title (or any such amendment) that is not the same as the
    standard or requirement but that is not preempted under section 1321(d).

    SEC. 1253. <> EFFECTIVE DATES.

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

    Subtitle D--Available Coverage Choices for All Americans

    PART I--ESTABLISHMENT OF QUALIFIED HEALTH PLANS

    SEC. 1301. QUALIFIED <> HEALTH PLAN DEFINED.

    (a) Qualified Health Plan.--In this title:
    (1) In general.--The term ``qualified health plan'' means a
    health plan that--
    (A) has in effect a certification (which may include
    a seal or other indication of approval) that such plan
    meets the criteria for certification described in
    section 1311(c) issued or recognized by each Exchange
    through which such plan is offered;
    (B) provides the essential health benefits package
    described in section 1302(a); and
    (C) is offered by a health insurance issuer that--
    (i) is licensed and in good standing to offer
    health insurance coverage in each State in which
    such issuer offers health insurance coverage under
    this title;

    [[Page 163]]

    (ii) agrees to offer at least one qualified
    health plan in the silver level and at least one
    plan in the gold level in each such Exchange;
    (iii) agrees to charge the same premium rate
    for each qualified health plan of the issuer
    without regard to whether the plan is offered
    through an Exchange or whether the plan is offered
    directly from the issuer or through an agent; and
    (iv) complies with the regulations developed
    by the Secretary under section 1311(d) and such
    other requirements as an applicable Exchange may
    establish.
    (2) Inclusion of co-op plans and community health insurance
    option.--Any reference in this title to a qualified health plan
    shall be deemed to include a qualified health plan offered
    through the CO-OP program under section 1322 or a community
    health insurance option under section 1323, unless specifically
    provided for otherwise.

    (b) Terms Relating to Health Plans.--In this title:
    (1) Health plan.--
    (A) In general.--The term ``health plan'' means
    health insurance coverage and a group health plan.
    (B) Exception for self-insured plans and mewas.--
    Except to the extent specifically provided by this
    title, the term ``health plan'' shall not include a
    group health plan or multiple employer welfare
    arrangement to the extent the plan or arrangement is not
    subject to State insurance regulation under section 514
    of the Employee Retirement Income Security Act of 1974.
    (2) Health insurance coverage and issuer.--The terms
    ``health insurance coverage'' and ``health insurance issuer''
    have the meanings given such terms by section 2791(b) of the
    Public Health Service Act.
    (3) Group health plan.--The term ``group health plan'' has
    the meaning given such term by section 2791(a) of the Public
    Health Service Act.

    SEC. 1302. ESSENTIAL <> HEALTH BENEFITS
    REQUIREMENTS.

    (a) Essential Health Benefits Package.--In this title, the term
    ``essential health benefits package'' means, with respect to any health
    plan, coverage that--
    (1) provides for the essential health benefits defined by
    the Secretary under subsection (b);
    (2) limits cost-sharing for such coverage in accordance with
    subsection (c); and
    (3) subject to subsection (e), provides either the bronze,
    silver, gold, or platinum level of coverage described in
    subsection (d).

    (b) Essential Health Benefits.--
    (1) In general.--Subject to paragraph (2), the Secretary
    shall define the essential health benefits, except that such
    benefits shall include at least the following general categories
    and the items and services covered within the categories:
    (A) Ambulatory patient services.
    (B) Emergency services.
    (C) Hospitalization.
    (D) Maternity and newborn care.

    [[Page 164]]

    (E) Mental health and substance use disorder
    services, including behavioral health treatment.
    (F) Prescription drugs.
    (G) Rehabilitative and habilitative services and
    devices.
    (H) Laboratory services.
    (I) Preventive and wellness services and chronic
    disease management.
    (J) Pediatric services, including oral and vision
    care.
    (2) Limitation.--
    (A) In general.--
    The <> Secretary shall ensure that
    the scope of the essential health benefits under
    paragraph (1) is equal to the scope of benefits provided
    under a typical employer plan, as determined by the
    Secretary. To <> inform this
    determination, the Secretary of Labor shall conduct a
    survey of employer-sponsored coverage to determine the
    benefits typically covered by employers, including
    multiemployer plans, and provide a report on such survey
    to the Secretary.
    (B) Certification.--In <> defining
    the essential health benefits described in paragraph
    (1), and in revising the benefits under paragraph
    (4)(H), the Secretary shall submit a report to the
    appropriate committees of Congress containing a
    certification from the Chief Actuary of the Centers for
    Medicare & Medicaid Services that such essential health
    benefits meet the limitation described in paragraph (2).
    (3) Notice and hearing.--In defining the essential health
    benefits described in paragraph (1), and in revising the
    benefits under paragraph (4)(H), the Secretary shall provide
    notice and an opportunity for public comment.
    (4) Required elements for consideration.--In defining the
    essential health benefits under paragraph (1), the Secretary
    shall--
    (A) ensure that such essential health benefits
    reflect an appropriate balance among the categories
    described in such subsection, so that benefits are not
    unduly weighted toward any category;
    (B) not make coverage decisions, determine
    reimbursement rates, establish incentive programs, or
    design benefits in ways that discriminate against
    individuals because of their age, disability, or
    expected length of life;
    (C) take into account the health care needs of
    diverse segments of the population, including women,
    children, persons with disabilities, and other groups;
    (D) ensure that health benefits established as
    essential not be subject to denial to individuals
    against their wishes on the basis of the individuals'
    age or expected length of life or of the individuals'
    present or predicted disability, degree of medical
    dependency, or quality of life;
    (E) provide that a qualified health plan shall not
    be treated as providing coverage for the essential
    health benefits described in paragraph (1) unless the
    plan provides that--
    (i) coverage for emergency department services
    will be provided without imposing any requirement
    under the plan for prior authorization of services
    or any limitation on coverage where the provider
    of services does not have a contractual
    relationship with the plan

    [[Page 165]]

    for the providing of services that is more
    restrictive than the requirements or limitations
    that apply to emergency department services
    received from providers who do have such a
    contractual relationship with the plan; and
    (ii) if such services are provided out-of-
    network, the cost-sharing requirement (expressed
    as a copayment amount or coinsurance rate) is the
    same requirement that would apply if such services
    were provided in-network;
    (F) provide that if a plan described in section
    1311(b)(2)(B)(ii) (relating to stand-alone dental
    benefits plans) is offered through an Exchange, another
    health plan offered through such Exchange shall not fail
    to be treated as a qualified health plan solely because
    the plan does not offer coverage of benefits offered
    through the stand-alone plan that are otherwise required
    under paragraph (1)(J); and
    (G) periodically review the essential health
    benefits under paragraph (1), and provide a report to
    Congress and the public that contains--
    (i) an assessment of whether enrollees are
    facing any difficulty accessing needed services
    for reasons of coverage or cost;
    (ii) an assessment of whether the essential
    health benefits needs to be modified or updated to
    account for changes in medical evidence or
    scientific advancement;
    (iii) information on how the essential health
    benefits will be modified to address any such gaps
    in access or changes in the evidence base;
    (iv) an assessment of the potential of
    additional or expanded benefits to increase costs
    and the interactions between the addition or
    expansion of benefits and reductions in existing
    benefits to meet actuarial limitations described
    in paragraph (2); and
    (H) periodically update the essential health
    benefits under paragraph (1) to address any gaps in
    access to coverage or changes in the evidence base the
    Secretary identifies in the review conducted under
    subparagraph (G).
    (5) Rule of construction.--Nothing in this title shall be
    construed to prohibit a health plan from providing benefits in
    excess of the essential health benefits described in this
    subsection.

    (c) Requirements Relating to Cost-Sharing.--
    (1) Annual limitation on cost-sharing.--
    (A) 2014.--The cost-sharing incurred under a health
    plan with respect to self-only coverage or coverage
    other than self-only coverage for a plan year beginning
    in 2014 shall not exceed the dollar amounts in effect
    under section 223(c)(2)(A)(ii) of the Internal Revenue
    Code of 1986 for self-only and family coverage,
    respectively, for taxable years beginning in 2014.
    (B) 2015 and later.--In the case of any plan year
    beginning in a calendar year after 2014, the limitation
    under this paragraph shall--

    [[Page 166]]

    (i) in the case of self-only coverage, be
    equal to the dollar amount under subparagraph (A)
    for self-only coverage for plan years beginning in
    2014, increased by an amount equal to the product
    of that amount and the premium adjustment
    percentage under paragraph (4) for the calendar
    year; and
    (ii) in the case of other coverage, twice the
    amount in effect under clause (i).
    If the amount of any increase under clause (i) is not a
    multiple of $50, such increase shall be rounded to the
    next lowest multiple of $50.
    (2) Annual limitation on deductibles for employer-sponsored
    plans.--
    (A) In general.--In the case of a health plan
    offered in the small group market, the deductible under
    the plan shall not exceed--
    (i) $2,000 in the case of a plan covering a
    single individual; and
    (ii) $4,000 in the case of any other plan.
    The amounts under clauses (i) and (ii) may be increased
    by the maximum amount of reimbursement which is
    reasonably available to a participant under a flexible
    spending arrangement described in section 106(c)(2) of
    the Internal Revenue Code of 1986 (determined without
    regard to any salary reduction arrangement).
    (B) Indexing of limits.--In the case of any plan
    year beginning in a calendar year after 2014--
    (i) the dollar amount under subparagraph
    (A)(i) shall be increased by an amount equal to
    the product of that amount and the premium
    adjustment percentage under paragraph (4) for the
    calendar year; and
    (ii) the dollar amount under subparagraph
    (A)(ii) shall be increased to an amount equal to
    twice the amount in effect under subparagraph
    (A)(i) for plan years beginning in the calendar
    year, determined after application of clause (i).
    If the amount of any increase under clause (i) is not a
    multiple of $50, such increase shall be rounded to the
    next lowest multiple of $50.
    (C) Actuarial value.--The limitation under this
    paragraph shall be applied in such a manner so as to not
    affect the actuarial value of any health plan, including
    a plan in the bronze level.
    (D) Coordination with preventive limits.--Nothing in
    this paragraph shall be construed to allow a plan to
    have a deductible under the plan apply to benefits
    described in section 2713 of the Public Health Service
    Act.
    (3) Cost-sharing.--In this title--
    (A) In general.--The term ``cost-sharing''
    includes--
    (i) deductibles, coinsurance, copayments, or
    similar charges; and
    (ii) any other expenditure required of an
    insured individual which is a qualified medical
    expense (within the meaning of section 223(d)(2)
    of the Internal Revenue Code of 1986) with respect
    to essential health benefits covered under the
    plan.

    [[Page 167]]

    (B) Exceptions.--Such term does not include
    premiums, balance billing amounts for non-network
    providers, or spending for non-covered services.
    (4) Premium <> adjustment
    percentage.--For purposes of paragraphs (1)(B)(i) and (2)(B)(i),
    the premium adjustment percentage for any calendar year is the
    percentage (if any) by which the average per capita premium for
    health insurance coverage in the United States for the preceding
    calendar year (as estimated by the Secretary no later than
    October 1 of such preceding calendar year) exceeds such average
    per capita premium for 2013 (as determined by the Secretary).

    (d) Levels of Coverage.--
    (1) Levels of coverage defined.--The levels of coverage
    described in this subsection are as follows:
    (A) Bronze level.--A plan in the bronze level shall
    provide a level of coverage that is designed to provide
    benefits that are actuarially equivalent to 60 percent
    of the full actuarial value of the benefits provided
    under the plan.
    (B) Silver level.--A plan in the silver level shall
    provide a level of coverage that is designed to provide
    benefits that are actuarially equivalent to 70 percent
    of the full actuarial value of the benefits provided
    under the plan.
    (C) Gold level.--A plan in the gold level shall
    provide a level of coverage that is designed to provide
    benefits that are actuarially equivalent to 80 percent
    of the full actuarial value of the benefits provided
    under the plan.
    (D) Platinum level.--A plan in the platinum level
    shall provide a level of coverage that is designed to
    provide benefits that are actuarially equivalent to 90
    percent of the full actuarial value of the benefits
    provided under the plan.
    (2) Actuarial value.--
    (A) In general.--Under regulations issued by the
    Secretary, the level of coverage of a plan shall be
    determined on the basis that the essential health
    benefits described in subsection (b) shall be provided
    to a standard population (and without regard to the
    population the plan may actually provide benefits to).
    (B) Employer contributions.--The Secretary may issue
    regulations under which employer contributions to a
    health savings account (within the meaning of section
    223 of the Internal Revenue Code of 1986) may be taken
    into account in determining the level of coverage for a
    plan of the employer.
    (C) Application.--In determining under this title,
    the Public Health Service Act, or the Internal Revenue
    Code of 1986 the percentage of the total allowed costs
    of benefits provided under a group health plan or health
    insurance coverage that are provided by such plan or
    coverage, the rules contained in the regulations under
    this paragraph shall apply.
    (3) Allowable variance.-- <> The
    Secretary shall develop guidelines to provide for a de minimis
    variation in the actuarial valuations used in determining the
    level of coverage of a plan to account for differences in
    actuarial estimates.

    [[Page 168]]

    (4) Plan reference.--In this title, any reference to a
    bronze, silver, gold, or platinum plan shall be treated as a
    reference to a qualified health plan providing a bronze, silver,
    gold, or platinum level of coverage, as the case may be.

    (e) Catastrophic Plan.--
    (1) In general.--A health plan not providing a bronze,
    silver, gold, or platinum level of coverage shall be treated as
    meeting the requirements of subsection (d) with respect to any
    plan year if--
    (A) the only individuals who are eligible to enroll
    in the plan are individuals described in paragraph (2);
    and
    (B) the plan provides--
    (i) except as provided in clause (ii), the
    essential health benefits determined under
    subsection (b), except that the plan provides no
    benefits for any plan year until the individual
    has incurred cost-sharing expenses in an amount
    equal to the annual limitation in effect under
    subsection (c)(1) for the plan year (except as
    provided for in section 2713); and
    (ii) coverage for at least three primary care
    visits.
    (2) Individuals eligible for enrollment.--An individual is
    described in this paragraph for any plan year if the
    individual--
    (A) has not attained the age of 30 before the
    beginning of the plan year; or
    (B) has a certification in effect for any plan year
    under this title that the individual is exempt from the
    requirement under section 5000A of the Internal Revenue
    Code of 1986 by reason of--
    (i) section 5000A(e)(1) of such Code (relating
    to individuals without affordable coverage); or
    (ii) section 5000A(e)(5) of such Code
    (relating to individuals with hardships).
    (3) Restriction to individual market.--If a health insurance
    issuer offers a health plan described in this subsection, the
    issuer may only offer the plan in the individual market.

    (f) Child-only Plans.--If a qualified health plan is offered through
    the Exchange in any level of coverage specified under subsection (d),
    the issuer shall also offer that plan through the Exchange in that level
    as a plan in which the only enrollees are individuals who, as of the
    beginning of a plan year, have not attained the age of 21, and such plan
    shall be treated as a qualified health plan.

    SEC. 1303. <> SPECIAL RULES.

    (a) Special Rules Relating to Coverage of Abortion Services.--
    (1) Voluntary choice of coverage of abortion services.--
    (A) In general.--Notwithstanding any other provision
    of this title (or any amendment made by this title), and
    subject to subparagraphs (C) and (D)--
    (i) nothing in this title (or any amendment
    made by this title), shall be construed to require
    a qualified health plan to provide coverage of
    services described in subparagraph (B)(i) or
    (B)(ii) as part of its essential health benefits
    for any plan year; and

    [[Page 169]]

    (ii) <> the issuer of a
    qualified health plan shall determine whether or
    not the plan provides coverage of services
    described in subparagraph (B)(i) or (B)(ii) as
    part of such benefits for the plan year.
    (B) Abortion services.--
    (i) Abortions for which public funding is
    prohibited.--The services described in this clause
    are abortions for which the expenditure of Federal
    funds appropriated for the Department of Health
    and Human Services is not permitted, based on the
    law as in effect as of the date that is 6 months
    before the beginning of the plan year involved.
    (ii) Abortions for which public funding is
    allowed.--The services described in this clause
    are abortions for which the expenditure of Federal
    funds appropriated for the Department of Health
    and Human Services is permitted, based on the law
    as in effect as of the date that is 6 months
    before the beginning of the plan year involved.
    (C) Prohibition on federal funds for abortion
    services in community health insurance option.--
    (i) Determination by secretary.--The Secretary
    may not determine, in accordance with subparagraph
    (A)(ii), that the community health insurance
    option established under section 1323 shall
    provide coverage of services described in
    subparagraph (B)(i) as part of benefits for the
    plan year unless the Secretary--
    (I) assures compliance with the
    requirements of paragraph (2);
    (II) assures, in accordance with
    applicable provisions of generally
    accepted accounting requirements,
    circulars on funds management of the
    Office of Management and Budget, and
    guidance on accounting of the Government
    Accountability Office, that no Federal
    funds are used for such coverage; and
    (III) notwithstanding section
    1323(e)(1)(C) or any other provision of
    this title, takes all necessary steps to
    assure that the United States does not
    bear the insurance risk for a community
    health insurance option's coverage of
    services described in subparagraph
    (B)(i).
    (ii) State requirement.--If a State requires,
    in addition to the essential health benefits
    required under section 1323(b)(3) (A), coverage of
    services described in subparagraph (B)(i) for
    enrollees of a community health insurance option
    offered in such State, the State shall assure that
    no funds flowing through or from the community
    health insurance option, and no other Federal
    funds, pay or defray the cost of providing
    coverage of services described in subparagraph
    (B)(i). The United States shall not bear the
    insurance risk for a State's required coverage of
    services described in subparagraph (B)(i).
    (iii) Exceptions.--Nothing in this
    subparagraph shall apply to coverage of services
    described in subparagraph (B)(ii) by the community
    health insurance

    [[Page 170]]

    option. Services described in subparagraph (B)(ii)
    shall be covered to the same extent as such
    services are covered under title XIX of the Social
    Security Act.
    (D) Assured availability of varied coverage through
    exchanges.--
    (i) In general.--The Secretary shall assure
    that with respect to qualified health plans
    offered in any Exchange established pursuant to
    this title--
    (I) there is at least one such plan
    that provides coverage of services
    described in clauses (i) and (ii) of
    subparagraph (B); and
    (II) there is at least one such plan
    that does not provide coverage of
    services described in subparagraph
    (B)(i).
    (ii) Special rules.--For purposes of clause
    (i)--
    (I) a plan shall be treated as
    described in clause (i)(II) if the plan
    does not provide coverage of services
    described in either subparagraph (B)(i)
    or (B)(ii); and
    (II) if a State has one Exchange
    covering more than 1 insurance market,
    the Secretary shall meet the
    requirements of clause (i) separately
    with respect to each such market.
    (2) Prohibition on the use of federal funds.--
    (A) In general.--If a qualified health plan provides
    coverage of services described in paragraph (1)(B)(i),
    the issuer of the plan shall not use any amount
    attributable to any of the following for purposes of
    paying for such services:
    (i) The credit under section 36B of the
    Internal Revenue Code of 1986 (and the amount (if
    any) of the advance payment of the credit under
    section 1412 of the Patient Protection and
    Affordable Care Act).
    (ii) Any cost-sharing reduction under section
    1402 of thePatient Protection and Affordable Care
    Act (and the amount (if any) of the advance
    payment of the reduction under section 1412 of the
    Patient Protection and Affordable Care Act).
    (B) Segregation of funds.--In the case of a plan to
    which subparagraph (A) applies, the issuer of the plan
    shall, out of amounts not described in subparagraph (A),
    segregate an amount equal to the actuarial amounts
    determined under subparagraph (C) for all enrollees from
    the amounts described in subparagraph (A).
    (C) <>  Actuarial value of
    optional service coverage.--
    (i) In general.--The Secretary shall estimate
    the basic per enrollee, per month cost, determined
    on an average actuarial basis, for including
    coverage under a qualified health plan of the
    services described in paragraph (1)(B)(i).
    (ii) Considerations.--In making such estimate,
    the Secretary--
    (I) may take into account the impact
    on overall costs of the inclusion of
    such coverage, but may not take into
    account any cost reduction estimated

    [[Page 171]]

    to result from such services, including
    prenatal care, delivery, or postnatal
    care;
    (II) shall estimate such costs as if
    such coverage were included for the
    entire population covered; and
    (III) may not estimate such a cost
    at less than $1 per enrollee, per month.
    (3) Provider conscience protections.--
    <> No individual health care provider or
    health care facility may be discriminated against because of a
    willingness or an unwillingness, if doing so is contrary to the
    religious or moral beliefs of the provider or facility, to
    provide, pay for, provide coverage of, or refer for abortions.

    (b) Application of State and Federal Laws Regarding Abortion.--
    (1) No preemption of state laws regarding abortion.--Nothing
    in this Act shall be construed to preempt or otherwise have any
    effect on State laws regarding the prohibition of (or
    requirement of) coverage, funding, or procedural requirements on
    abortions, including parental notification or consent for the
    performance of an abortion on a minor.
    (2) No effect on federal laws regarding abortion.--
    (A) In general.--Nothing in this Act shall be
    construed to have any effect on Federal laws regarding--
    (i) conscience protection;
    (ii) willingness or refusal to provide
    abortion; and
    (iii) discrimination on the basis of the
    willingness or refusal to provide, pay for, cover,
    or refer for abortion or to provide or participate
    in training to provide abortion.
    (3) No effect on federal civil rights law.--Nothing in this
    subsection shall alter the rights and obligations of employees
    and employers under title VII of the Civil Rights Act of 1964.

    (c) Application of Emergency Services Laws.--Nothing in this Act
    shall be construed to relieve any health care provider from providing
    emergency services as required by State or Federal law, including
    section 1867 of the Social Security Act (popularly known as ``EMTALA'').

    SEC. 1304. <> RELATED DEFINITIONS.

    (a) Definitions Relating to Markets.--In this title:
    (1) Group market.--The term ``group market'' means the
    health insurance market under which individuals obtain health
    insurance coverage (directly or through any arrangement) on
    behalf of themselves (and their dependents) through a group
    health plan maintained by an employer.
    (2) Individual market.--The term ``individual market'' means
    the market for health insurance coverage offered to individuals
    other than in connection with a group health plan.
    (3) Large and small group markets.--The terms ``large group
    market'' and ``small group market'' mean the health insurance
    market under which individuals obtain health insurance coverage
    (directly or through any arrangement) on behalf of themselves
    (and their dependents) through a group health plan maintained by
    a large employer (as defined in subsection

    [[Page 172]]

    (b)(1)) or by a small employer (as defined in subsection
    (b)(2)), respectively.

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

    (c) Secretary.--In this title, the term ``Secretary'' means the
    Secretary of Health and Human Services.
    (d) State.--In this title, the term ``State'' means each of the 50
    States and the District of Columbia.

    [[Page 173]]

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

    SEC. 1311. <> AFFORDABLE CHOICES OF HEALTH BENEFIT
    PLANS.

    (a) Assistance to States to Establish American Health Benefit
    Exchanges.--
    (1) Planning and establishment grants.--
    <> There shall be appropriated to the
    Secretary, out of any moneys in the Treasury not otherwise
    appropriated, an amount necessary to enable the Secretary to
    make awards, not later than 1 year after the date of enactment
    of this Act, to States in the amount specified in paragraph (2)
    for the uses described in paragraph (3).
    (2) Amount specified.-- <> For each
    fiscal year, the Secretary shall determine the total amount that
    the Secretary will make available to each State for grants under
    this subsection.
    (3) Use of funds.--A State shall use amounts awarded under
    this subsection for activities (including planning activities)
    related to establishing an American Health Benefit Exchange, as
    described in subsection (b).
    (4) Renewability of grant.--
    (A) In general.--Subject to subsection (d)(4), the
    Secretary may renew a grant awarded under paragraph (1)
    if the State recipient of such grant--
    (i) is making progress, as determined by the
    Secretary, toward--
    (I) establishing an Exchange; and
    (II) implementing the reforms
    described in subtitles A and C (and the
    amendments made by such subtitles); and
    (ii) is meeting such other benchmarks as the
    Secretary may establish.
    (B) Limitation.--No <> grant shall
    be awarded under this subsection after January 1, 2015.
    (5) Technical assistance to facilitate participation in shop
    exchanges.--The Secretary shall provide technical assistance to
    States to facilitate the participation of qualified small
    businesses in such States in SHOP Exchanges.

    (b) American Health Benefit Exchanges.--
    (1) In general.--
    Each <> State shall, not later
    than January 1, 2014, establish an American Health Benefit
    Exchange (referred to in this title as an ``Exchange'') for the
    State that--
    (A) facilitates the purchase of qualified health
    plans;
    (B) provides for the establishment of a Small
    Business Health Options Program (in this title referred
    to as a ``SHOP Exchange'') that is designed to assist
    qualified employers in the State who are small employers
    in facilitating the enrollment of their employees in
    qualified health plans offered in the small group market
    in the State; and
    (C) meets the requirements of subsection (d).
    (2) Merger of individual and shop exchanges.--A State may
    elect to provide only one Exchange in the State for providing
    both Exchange and SHOP Exchange services to both qualified
    individuals and qualified small employers, but only

    [[Page 174]]

    if the Exchange has adequate resources to assist such
    individuals and employers.

    (c) Responsibilities of the Secretary.--
    (1) In general.--The <> Secretary shall,
    by regulation, establish criteria for the certification of
    health plans as qualified health plans. Such criteria shall
    require that, to be certified, a plan shall, at a minimum--
    (A) meet marketing requirements, and not employ
    marketing practices or benefit designs that have the
    effect of discouraging the enrollment in such plan by
    individuals with significant health needs;
    (B) ensure a sufficient choice of providers (in a
    manner consistent with applicable network adequacy
    provisions under section 2702(c) of the Public Health
    Service Act), and provide information to enrollees and
    prospective enrollees on the availability of in-network
    and out-of-network providers;
    (C) include within health insurance plan networks
    those essential community providers, where available,
    that serve predominately low-income, medically-
    underserved individuals, such as health care providers
    defined in section 340B(a)(4) of the Public Health
    Service Act and providers described in section
    1927(c)(1)(D)(i)(IV) of the Social Security Act as set
    forth by section 221 of Public Law 111-8, except that
    nothing in this subparagraph shall be construed to
    require any health plan to provide coverage for any
    specific medical procedure;
    (D)(i) be accredited with respect to local
    performance on clinical quality measures such as the
    Healthcare Effectiveness Data and Information Set,
    patient experience ratings on a standardized Consumer
    Assessment of Healthcare Providers and Systems survey,
    as well as consumer access, utilization management,
    quality assurance, provider credentialing, complaints
    and appeals, network adequacy and access, and patient
    information programs by any entity recognized by the
    Secretary for the accreditation of health insurance
    issuers or plans (so long as any such entity has
    transparent and rigorous methodological and scoring
    criteria); or
    (ii) receive such accreditation within a period
    established by an Exchange for such accreditation that
    is applicable to all qualified health plans;
    (E) implement a quality improvement strategy
    described in subsection (g)(1);
    (F) utilize a uniform enrollment form that qualified
    individuals and qualified employers may use (either
    electronically or on paper) in enrolling in qualified
    health plans offered through such Exchange, and that
    takes into account criteria that the National
    Association of Insurance Commissioners develops and
    submits to the Secretary;
    (G) utilize the standard format established for
    presenting health benefits plan options; and
    (H) provide information to enrollees and prospective
    enrollees, and to each Exchange in which the plan is
    offered, on any quality measures for health plan
    performance endorsed under section 399JJ of the Public
    Health Service Act, as applicable.

    [[Page 175]]

    (2) Rule of construction.-- <> Nothing in
    paragraph (1)(C) shall be construed to require a qualified
    health plan to contract with a provider described in such
    paragraph if such provider refuses to accept the generally
    applicable payment rates of such plan.
    (3) Rating system.--The Secretary shall develop a rating
    system that would rate qualified health plans offered through an
    Exchange in each benefits level on the basis of the relative
    quality and price. The Exchange shall include the quality rating
    in the information provided to individuals and employers through
    the Internet portal established under paragraph (4).
    (4) Enrollee satisfaction system.--The Secretary shall
    develop an enrollee satisfaction survey system that would
    evaluate the level of enrollee satisfaction with qualified
    health plans offered through an Exchange, for each such
    qualified health plan that had more than 500 enrollees in the
    previous year. The Exchange shall include enrollee satisfaction
    information in the information provided to individuals and
    employers through the Internet portal established under
    paragraph (5) in a manner that allows individuals to easily
    compare enrollee satisfaction levels between comparable plans.
    (5) Internet portals.--The Secretary shall--
    (A) continue to operate, maintain, and update the
    Internet portal developed under section 1103(a) and to
    assist States in developing and maintaining their own
    such portal; and
    (B) make available for use by Exchanges a model
    template for an Internet portal that may be used to
    direct qualified individuals and qualified employers to
    qualified health plans, to assist such individuals and
    employers in determining whether they are eligible to
    participate in an Exchange or eligible for a premium tax
    credit or cost-sharing reduction, and to present
    standardized information (including quality ratings)
    regarding qualified health plans offered through an
    Exchange to assist consumers in making easy health
    insurance choices.
    Such template shall include, with respect to each qualified
    health plan offered through the Exchange in each rating area,
    access to the uniform outline of coverage the plan is required
    to provide under section 2716 of the Public Health Service Act
    and to a copy of the plan's written policy.
    (6) Enrollment periods.--The Secretary shall require an
    Exchange to provide for--
    (A) <> an initial open
    enrollment, as determined by the Secretary (such
    determination to be made not later than July 1, 2012);
    (B) <> annual open enrollment
    periods, as determined by the Secretary for calendar
    years after the initial enrollment period;
    (C) special enrollment periods specified in section
    9801 of the Internal Revenue Code of 1986 and other
    special enrollment periods under circumstances similar
    to such periods under part D of title XVIII of the
    Social Security Act; and
    (D) <> special monthly
    enrollment periods for Indians (as defined in section 4
    of the Indian Health Care Improvement Act).

    [[Page 176]]

    (d) Requirements.--
    (1) In general.--An Exchange shall be a governmental agency
    or nonprofit entity that is established by a State.
    (2) Offering of coverage.--
    (A) In general.--An Exchange shall make available
    qualified health plans to qualified individuals and
    qualified employers.
    (B) Limitation.--
    (i) In general.--An Exchange may not make
    available any health plan that is not a qualified
    health plan.
    (ii) Offering of stand-alone dental
    benefits.--Each Exchange within a State shall
    allow an issuer of a plan that only provides
    limited scope dental benefits meeting the
    requirements of section 9832(c)(2)(A) of the
    Internal Revenue Code of 1986 to offer the plan
    through the Exchange (either separately or in
    conjunction with a qualified health plan) if the
    plan provides pediatric dental benefits meeting
    the requirements of section 1302(b)(1)(J)).
    (3) Rules relating to additional required benefits.--
    (A) In general.--Except as provided in subparagraph
    (B), an Exchange may make available a qualified health
    plan notwithstanding any provision of law that may
    require benefits other than the essential health
    benefits specified under section 1302(b).
    (B) States may require additional benefits.--
    (i) In general.--Subject to the requirements
    of clause (ii), a State may require that a
    qualified health plan offered in such State offer
    benefits in addition to the essential health
    benefits specified under section 1302(b).
    (ii) State must assume cost.--
    A <> State shall make payments to
    or on behalf of an individual eligible for the
    premium tax credit under section 36B of the
    Internal Revenue Code of 1986 and any cost-sharing
    reduction under section 1402 to defray the cost to
    the individual of any additional benefits
    described in clause (i) which are not eligible for
    such credit or reduction under section
    36B(b)(3)(D) of such Code and section 1402(c)(4).
    (4) Functions.--An Exchange shall, at a minimum--
    (A) <> implement procedures for
    the certification, recertification, and decertification,
    consistent with guidelines developed by the Secretary
    under subsection (c), of health plans as qualified
    health plans;
    (B) <> provide for the operation of
    a toll-free telephone hotline to respond to requests for
    assistance;
    (C) <> maintain an Internet website
    through which enrollees and prospective enrollees of
    qualified health plans may obtain standardized
    comparative information on such plans;
    (D) assign a rating to each qualified health plan
    offered through such Exchange in accordance with the
    criteria developed by the Secretary under subsection
    (c)(3);
    (E) utilize a standardized format for presenting
    health benefits plan options in the Exchange, including
    the use

    [[Page 177]]

    of the uniform outline of coverage established under
    section 2715 of the Public Health Service Act;
    (F) in accordance with section 1413, inform
    individuals of eligibility requirements for the medicaid
    program under title XIX of the Social Security Act, the
    CHIP program under title XXI of such Act, or any
    applicable State or local public program and if through
    screening of the application by the Exchange, the
    Exchange determines that such individuals are eligible
    for any such program, enroll such individuals in such
    program;
    (G) establish and make available by electronic means
    a calculator to determine the actual cost of coverage
    after the application of any premium tax credit under
    section 36B of the Internal Revenue Code of 1986 and any
    cost-sharing reduction under section 1402;
    (H) <> subject to section
    1411, grant a certification attesting that, for purposes
    of the individual responsibility penalty under section
    5000A of the Internal Revenue Code of 1986, an
    individual is exempt from the individual requirement or
    from the penalty imposed by such section because--
    (i) there is no affordable qualified health
    plan available through the Exchange, or the
    individual's employer, covering the individual; or
    (ii) the individual meets the requirements for
    any other such exemption from the individual
    responsibility requirement or penalty;
    (I) transfer to the Secretary of the Treasury--
    (i) <> a list of the individuals
    who are issued a certification under subparagraph
    (H), including the name and taxpayer
    identification number of each individual;
    (ii) the name and taxpayer identification
    number of each individual who was an employee of
    an employer but who was determined to be eligible
    for the premium tax credit under section 36B of
    the Internal Revenue Code of 1986 because--
    (I) the employer did not provide
    minimum essential coverage; or
    (II) the employer provided such
    minimum essential coverage but it was
    determined under section 36B(c)(2)(C) of
    such Code to either be unaffordable to
    the employee or not provide the required
    minimum actuarial value; and
    (iii) the name and taxpayer identification
    number of each individual who notifies the
    Exchange under section 1411(b)(4) that they have
    changed employers and of each individual who
    ceases coverage under a qualified health plan
    during a plan year (and the effective date of such
    cessation);
    (J) provide to each employer the name of each
    employee of the employer described in subparagraph
    (I)(ii) who ceases coverage under a qualified health
    plan during a plan year (and the effective date of such
    cessation); and
    (K) establish the Navigator program described in
    subsection (i).
    (5) Funding limitations.--

    [[Page 178]]

    (A) No federal funds for continued
    operations. <> --In establishing
    an Exchange under this section, the State shall ensure
    that such Exchange is self-sustaining beginning on
    January 1, 2015, including allowing the Exchange to
    charge assessments or user fees to participating health
    insurance issuers, or to otherwise generate funding, to
    support its operations.
    (B) Prohibiting wasteful use of funds.--In carrying
    out activities under this subsection, an Exchange shall
    not utilize any funds intended for the administrative
    and operational expenses of the Exchange for staff
    retreats, promotional giveaways, excessive executive
    compensation, or promotion of Federal or State
    legislative and regulatory modifications.
    (6) Consultation.--An Exchange shall consult with
    stakeholders relevant to carrying out the activities under this
    section, including--
    (A) health care consumers who are enrollees in
    qualified health plans;
    (B) individuals and entities with experience in
    facilitating enrollment in qualified health plans;
    (C) representatives of small businesses and self-
    employed individuals;
    (D) State Medicaid offices; and
    (E) advocates for enrolling hard to reach
    populations.
    (7) Publication of costs.-- <> An Exchange
    shall publish the average costs of licensing, regulatory fees,
    and any other payments required by the Exchange, and the
    administrative costs of such Exchange, on an Internet website to
    educate consumers on such costs. Such information shall also
    include monies lost to waste, fraud, and abuse.

    (e) Certification.--
    (1) In general.--An Exchange may certify a health plan as a
    qualified health plan if--
    (A) such health plan meets the requirements for
    certification as promulgated by the Secretary under
    subsection (c)(1); and
    (B) <> the Exchange determines
    that making available such health plan through such
    Exchange is in the interests of qualified individuals
    and qualified employers in the State or States in which
    such Exchange operates, except that the Exchange may not
    exclude a health plan--
    (i) on the basis that such plan is a fee-for-
    service plan;
    (ii) through the imposition of premium price
    controls; or
    (iii) on the basis that the plan provides
    treatments necessary to prevent patients' deaths
    in circumstances the Exchange determines are
    inappropriate or too costly.
    (2) Premium considerations.--The Exchange shall require
    health plans seeking certification as qualified health plans to
    submit a justification for any premium increase prior to
    implementation of the increase. <> Such plans
    shall prominently post such information on their websites. The
    Exchange may take this information, and the information and the
    recommendations provided to the Exchange by the State under

    [[Page 179]]

    section 2794(b)(1) of the Public Health Service Act (relating to
    patterns or practices of excessive or unjustified premium
    increases), into consideration when determining whether to make
    such health plan available through the Exchange. The Exchange
    shall take into account any excess of premium growth outside the
    Exchange as compared to the rate of such growth inside the
    Exchange, including information reported by the States.

    (f) Flexibility.--
    (1) Regional or other interstate exchanges.--An Exchange may
    operate in more than one State if--
    (A) each State in which such Exchange operates
    permits such operation; and
    (B) the Secretary approves such regional or
    interstate Exchange.
    (2) Subsidiary exchanges.--A State may establish one or more
    subsidiary Exchanges if--
    (A) each such Exchange serves a geographically
    distinct area; and
    (B) the area served by each such Exchange is at
    least as large as a rating area described in section
    2701(a) of the Public Health Service Act.
    (3) Authority to contract.--
    (A) In general.--A State may elect to authorize an
    Exchange established by the State under this section to
    enter into an agreement with an eligible entity to carry
    out 1 or more responsibilities of the Exchange.
    (B) Eligible entity. <> --In this
    paragraph, the term ``eligible entity'' means--
    (i) a person--
    (I) incorporated under, and subject
    to the laws of, 1 or more States;
    (II) that has demonstrated
    experience on a State or regional basis
    in the individual and small group health
    insurance markets and in benefits
    coverage; and
    (III) that is not a health insurance
    issuer or that is treated under
    subsection (a) or (b) of section 52 of
    the Internal Revenue Code of 1986 as a
    member of the same controlled group of
    corporations (or under common control
    with) as a health insurance issuer; or
    (ii) the State medicaid agency under title XIX
    of the Social Security Act.

    (g) Rewarding Quality Through Market-Based Incentives.--
    (1) Strategy described.--A strategy described in this
    paragraph is a payment structure that provides increased
    reimbursement or other incentives for--
    (A) improving health outcomes through the
    implementation of activities that shall include quality
    reporting, effective case management, care coordination,
    chronic disease management, medication and care
    compliance initiatives, including through the use of the
    medical home model, for treatment or services under the
    plan or coverage;

    [[Page 180]]

    (B) the implementation of activities to prevent
    hospital readmissions through a comprehensive program
    for hospital discharge that includes patient-centered
    education and counseling, comprehensive discharge
    planning, and post discharge reinforcement by an
    appropriate health care professional;
    (C) the implementation of activities to improve
    patient safety and reduce medical errors through the
    appropriate use of best clinical practices, evidence
    based medicine, and health information technology under
    the plan or coverage; and
    (D) the implementation of wellness and health
    promotion activities.
    (2) Guidelines.--The Secretary, in consultation with experts
    in health care quality and stakeholders, shall develop
    guidelines concerning the matters described in paragraph (1).
    (3) Requirements.-- <> The guidelines
    developed under paragraph (2) shall require the periodic
    reporting to the applicable Exchange of the activities that a
    qualified health plan has conducted to implement a strategy
    described in paragraph (1).

    (h) Quality Improvement.--
    (1) Enhancing patient safety.-- <> Beginning on January 1, 2015, a qualified health plan
    may contract with--
    (A) a hospital with greater than 50 beds only if
    such hospital--
    (i) utilizes a patient safety evaluation
    system as described in part C of title IX of the
    Public Health Service Act; and
    (ii) implements a mechanism to ensure that
    each patient receives a comprehensive program for
    hospital discharge that includes patient-centered
    education and counseling, comprehensive discharge
    planning, and post discharge reinforcement by an
    appropriate health care professional; or
    (B) a health care provider only if such provider
    implements such mechanisms to improve health care
    quality as the Secretary may by regulation require.
    (2) Exceptions.--The Secretary may establish reasonable
    exceptions to the requirements described in paragraph (1).
    (3) Adjustment.--The Secretary may by regulation adjust the
    number of beds described in paragraph (1)(A).

    (i) Navigators.--
    (1) <>  In general.--An Exchange shall
    establish a program under which it awards grants to entities
    described in paragraph (2) to carry out the duties described in
    paragraph (3).
    (2) Eligibility.--
    (A) In general.--To be eligible to receive a grant
    under paragraph (1), an entity shall demonstrate to the
    Exchange involved that the entity has existing
    relationships, or could readily establish relationships,
    with employers and employees, consumers (including
    uninsured and underinsured consumers), or self-employed
    individuals likely to be qualified to enroll in a
    qualified health plan.
    (B) Types.--Entities described in subparagraph (A)
    may include trade, industry, and professional
    associations, commercial fishing industry organizations,
    ranching and farming organizations, community and
    consumer-focused

    [[Page 181]]

    nonprofit groups, chambers of commerce, unions, small
    business development centers, other licensed insurance
    agents and brokers, and other entities that--
    (i) are capable of carrying out the duties
    described in paragraph (3);
    (ii) meet the standards described in paragraph
    (4); and
    (iii) provide information consistent with the
    standards developed under paragraph (5).
    (3) Duties.--An entity that serves as a navigator under a
    grant under this subsection shall--
    (A) conduct public education activities to raise
    awareness of the availability of qualified health plans;
    (B) distribute fair and impartial information
    concerning enrollment in qualified health plans, and the
    availability of premium tax credits under section 36B of
    the Internal Revenue Code of 1986 and cost-sharing
    reductions under section 1402;
    (C) facilitate enrollment in qualified health plans;
    (D) provide referrals to any applicable office of
    health insurance consumer assistance or health insurance
    ombudsman established under section 2793 of the Public
    Health Service Act, or any other appropriate State
    agency or agencies, for any enrollee with a grievance,
    complaint, or question regarding their health plan,
    coverage, or a determination under such plan or
    coverage; and
    (E) provide information in a manner that is
    culturally and linguistically appropriate to the needs
    of the population being served by the Exchange or
    Exchanges.
    (4) Standards.--
    (A) In general.--The Secretary shall establish
    standards for navigators under this subsection,
    including provisions to ensure that any private or
    public entity that is selected as a navigator is
    qualified, and licensed if appropriate, to engage in the
    navigator activities described in this subsection and to
    avoid conflicts of interest. Under such standards, a
    navigator shall not--
    (i) be a health insurance issuer; or
    (ii) receive any consideration directly or
    indirectly from any health insurance issuer in
    connection with the enrollment of any qualified
    individuals or employees of a qualified employer
    in a qualified health plan.
    (5) Fair and impartial information and services.--
    <> The Secretary, in collaboration with
    States, shall develop standards to ensure that information made
    available by navigators is fair, accurate, and impartial.
    (6) Funding.--Grants under this subsection shall be made
    from the operational funds of the Exchange and not Federal funds
    received by the State to establish the Exchange.

    (j) Applicability of Mental Health Parity.--Section 2726 of the
    Public Health Service Act shall apply to qualified health plans in the
    same manner and to the same extent as such section applies to health
    insurance issuers and group health plans.
    (k) Conflict.--An Exchange may not establish rules that conflict
    with or prevent the application of regulations promulgated by the
    Secretary under this subtitle.

    [[Page 182]]

    SEC. 1312. <>  CONSUMER CHOICE.

    (a) Choice.--
    (1) Qualified individuals.--A qualified individual may
    enroll in any qualified health plan available to such
    individual.
    (2) Qualified employers.--
    (A) Employer may specify level.--A qualified
    employer may provide support for coverage of employees
    under a qualified health plan by selecting any level of
    coverage under section 1302(d) to be made available to
    employees through an Exchange.
    (B) Employee may choose plans within a level.--Each
    employee of a qualified employer that elects a level of
    coverage under subparagraph (A) may choose to enroll in
    a qualified health plan that offers coverage at that
    level.

    (b) Payment of Premiums by Qualified Individuals.--A qualified
    individual enrolled in any qualified health plan may pay any applicable
    premium owed by such individual to the health insurance issuer issuing
    such qualified health plan.
    (c) Single Risk Pool.--
    (1) Individual market.--A health insurance issuer shall
    consider all enrollees in all health plans (other than
    grandfathered health plans) offered by such issuer in the
    individual market, including those enrollees who do not enroll
    in such plans through the Exchange, to be members of a single
    risk pool.
    (2) Small group market.--A health insurance issuer shall
    consider all enrollees in all health plans (other than
    grandfathered health plans) offered by such issuer in the small
    group market, including those enrollees who do not enroll in
    such plans through the Exchange, to be members of a single risk
    pool.
    (3) Merger of markets.--A State may require the individual
    and small group insurance markets within a State to be merged if
    the State determines appropriate.
    (4) State law.--A State law requiring grandfathered health
    plans to be included in a pool described in paragraph (1) or (2)
    shall not apply.

    (d) Empowering Consumer Choice.--
    (1) Continued operation of market outside exchanges.--
    Nothing in this title shall be construed to prohibit--
    (A) a health insurance issuer from offering outside
    of an Exchange a health plan to a qualified individual
    or qualified employer; and
    (B) a qualified individual from enrolling in, or a
    qualified employer from selecting for its employees, a
    health plan offered outside of an Exchange.
    (2) Continued operation of state benefit requirements.--
    Nothing in this title shall be construed to terminate, abridge,
    or limit the operation of any requirement under State law with
    respect to any policy or plan that is offered outside of an
    Exchange to offer benefits.
    (3) Voluntary nature of an exchange.--
    (A) Choice to enroll or not to enroll.--Nothing in
    this title shall be construed to restrict the choice of

    [[Page 183]]

    a qualified individual to enroll or not to enroll in a
    qualified health plan or to participate in an Exchange.
    (B) Prohibition against compelled enrollment.--
    Nothing in this title shall be construed to compel an
    individual to enroll in a qualified health plan or to
    participate in an Exchange.
    (C) Individuals allowed to enroll in any plan.--A
    qualified individual may enroll in any qualified health
    plan, except that in the case of a catastrophic plan
    described in section 1302(e), a qualified individual may
    enroll in the plan only if the individual is eligible to
    enroll in the plan under section 1302(e)(2).
    (D) Members of congress in the exchange.--
    (i) Requirement.--Notwithstanding any other
    provision of law, after the effective date of this
    subtitle, the only health plans that the Federal
    Government may make available to Members of
    Congress and congressional staff with respect to
    their service as a Member of Congress or
    congressional staff shall be health plans that
    are--
    (I) created under this Act (or an
    amendment made by this Act); or
    (II) offered through an Exchange
    established under this Act (or an
    amendment made by this Act).
    (ii) Definitions.--In this section:
    (I) Member of congress.--The term
    ``Member of Congress'' means any member
    of the House of Representatives or the
    Senate.
    (II) Congressional staff.--The term
    ``congressional staff'' means all full-
    time and part-time employees employed by
    the official office of a Member of
    Congress, whether in Washington, DC or
    outside of Washington, DC.
    (4) No penalty for transferring to minimum essential
    coverage outside exchange.--An Exchange, or a qualified health
    plan offered through an Exchange, shall not impose any penalty
    or other fee on an individual who cancels enrollment in a plan
    because the individual becomes eligible for minimum essential
    coverage (as defined in section 5000A(f) of the Internal Revenue
    Code of 1986 without regard to paragraph (1)(C) or (D) thereof)
    or such coverage becomes affordable (within the meaning of
    section 36B(c)(2)(C) of such Code).

    (e) Enrollment Through Agents or Brokers. <> --
    The Secretary shall establish procedures under which a State may allow
    agents or brokers--
    (1) to enroll individuals in any qualified health plans in
    the individual or small group market as soon as the plan is
    offered through an Exchange in the State; and
    (2) to assist individuals in applying for premium tax
    credits and cost-sharing reductions for plans sold through an
    Exchange.

    Such procedures may include the establishment of rate schedules for
    broker commissions paid by health benefits plans offered through an
    exchange.
    (f) Qualified Individuals and Employers; Access Limited to Citizens
    and Lawful Residents.--
    (1) Qualified individuals.--In this title:

    [[Page 184]]

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

    SEC. 1313. <> FINANCIAL INTEGRITY.

    (a) Accounting for Expenditures.--
    (1) In general.-- <> An Exchange
    shall keep an accurate accounting of all activities, receipts,
    and expenditures and shall annually submit to the Secretary a
    report concerning such accountings.
    (2) Investigations.--The Secretary, in coordination with the
    Inspector General of the Department of Health and Human
    Services, may investigate the affairs of an Exchange, may
    examine the properties and records of an Exchange, and may
    require periodic reports in relation to activities undertaken by
    an Exchange. An Exchange shall fully cooperate in any
    investigation conducted under this paragraph.
    (3) Audits.-- <> An Exchange shall be
    subject to annual audits by the Secretary.

    [[Page 185]]

    (4) Pattern of abuse.-- <> If the
    Secretary determines that an Exchange or a State has engaged in
    serious misconduct with respect to compliance with the
    requirements of, or carrying out of activities required under,
    this title, the Secretary may rescind from payments otherwise
    due to such State involved under this or any other Act
    administered by the Secretary an amount not to exceed 1 percent
    of such payments per year until corrective actions are taken by
    the State that are determined to be adequate by the Secretary.
    (5) Protections against fraud and abuse.--With respect to
    activities carried out under this title, the Secretary shall
    provide for the efficient and non-discriminatory administration
    of Exchange activities and implement any measure or procedure
    that--
    (A) the Secretary determines is appropriate to
    reduce fraud and abuse in the administration of this
    title; and
    (B) the Secretary has authority to implement under
    this title or any other Act.
    (6) Application of the false claims act.--
    (A) In general.--Payments made by, through, or in
    connection with an Exchange are subject to the False
    Claims Act (31 U.S.C. 3729 et seq.) if those payments
    include any Federal funds. Compliance with the
    requirements of this Act concerning eligibility for a
    health insurance issuer to participate in the Exchange
    shall be a material condition of an issuer's entitlement
    to receive payments, including payments of premium tax
    credits and cost-sharing reductions, through the
    Exchange.
    (B) Damages <> .--Notwithstanding
    paragraph (1) of section 3729(a) of title 31, United
    States Code, and subject to paragraph (2) of such
    section, the civil penalty assessed under the False
    Claims Act on any person found liable under such Act as
    described in subparagraph (A) shall be increased by not
    less than 3 times and not more than 6 times the amount
    of damages which the Government sustains because of the
    act of that person.

    (b) GAO Oversight. <> --Not later than 5
    years after the first date on which Exchanges are required to be
    operational under this title, the Comptroller General shall conduct an
    ongoing study of Exchange activities and the enrollees in qualified
    health plans offered through Exchanges. Such study shall review--
    (1) the operations and administration of Exchanges,
    including surveys and reports of qualified health plans offered
    through Exchanges and on the experience of such plans (including
    data on enrollees in Exchanges and individuals purchasing health
    insurance coverage outside of Exchanges), the expenses of
    Exchanges, claims statistics relating to qualified health plans,
    complaints data relating to such plans, and the manner in which
    Exchanges meet their goals;
    (2) any significant observations regarding the utilization
    and adoption of Exchanges;
    (3) where appropriate, recommendations for improvements in
    the operations or policies of Exchanges; and
    (4) how many physicians, by area and specialty, are not
    taking or accepting new patients enrolled in Federal Government
    health care programs, and the adequacy of provider networks of
    Federal Government health care programs.

    [[Page 186]]

    PART III--STATE FLEXIBILITY RELATING TO EXCHANGES

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

    (a) Establishment of Standards.--
    (1) In general.-- <> The Secretary
    shall, as soon as practicable after the date of enactment of
    this Act, issue regulations setting standards for meeting the
    requirements under this title, and the amendments made by this
    title, with respect to--
    (A) the establishment and operation of Exchanges
    (including SHOP Exchanges);
    (B) the offering of qualified health plans through
    such Exchanges;
    (C) the establishment of the reinsurance and risk
    adjustment programs under part V; and
    (D) such other requirements as the Secretary
    determines appropriate.
    The preceding sentence shall not apply to standards for
    requirements under subtitles A and C (and the amendments made by
    such subtitles) for which the Secretary issues regulations under
    the Public Health Service Act.
    (2) Consultation.--In issuing the regulations under
    paragraph (1), the Secretary shall consult with the National
    Association of Insurance Commissioners and its members and with
    health insurance issuers, consumer organizations, and such other
    individuals as the Secretary selects in a manner designed to
    ensure balanced representation among interested parties.

    (b) State Action <> .--Each State that elects, at
    such time and in such manner as the Secretary may prescribe, to apply
    the requirements described in subsection (a) shall, not later than
    January 1, 2014, adopt and have in effect--
    (1) the Federal standards established under subsection (a);
    or
    (2) a State law or regulation that the Secretary determines
    implements the standards within the State.

    (c) Failure To Establish Exchange or Implement Requirements.--
    (1) In general.--If--
    (A) a State is not an electing State under
    subsection (b); or
    (B) <> the Secretary
    determines, on or before January 1, 2013, that an
    electing State--
    (i) will not have any required Exchange
    operational by January 1, 2014; or
    (ii) has not taken the actions the Secretary
    determines necessary to implement--
    (I) the other requirements set forth
    in the standards under subsection (a);
    or
    (II) the requirements set forth in
    subtitles A and C and the amendments
    made by such subtitles;
    the Secretary shall (directly or through agreement with a not-
    for-profit entity) establish and operate such Exchange within
    the State and the Secretary shall take such actions as are
    necessary to implement such other requirements.

    [[Page 187]]

    (2) Enforcement authority.-- <> The
    provisions of section 2736(b) of the Public Health Services Act
    shall apply to the enforcement under paragraph (1) of
    requirements of subsection (a)(1) (without regard to any
    limitation on the application of those provisions to group
    health plans).

    (d) No Interference With State Regulatory Authority.--Nothing in
    this title shall be construed to preempt any State law that does not
    prevent the application of the provisions of this title.
    (e) Presumption for Certain State-Operated Exchanges.--
    (1) In general.-- <> In the case of a
    State operating an Exchange before January 1, 2010, and which
    has insured a percentage of its population not less than the
    percentage of the population projected to be covered nationally
    after the implementation of this Act, that seeks to operate an
    Exchange under this section, the Secretary shall presume that
    such Exchange meets the standards under this section unless the
    Secretary determines, after completion of the process
    established under paragraph (2), that the Exchange does not
    comply with such standards.
    (2) Process.--The Secretary shall establish a process to
    work with a State described in paragraph (1) to provide
    assistance necessary to assist the State's Exchange in coming
    into compliance with the standards for approval under this
    section.

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

    (a) Establishment of Program.--
    (1) In general.--The Secretary shall establish a program to
    carry out the purposes of this section to be known as the
    Consumer Operated and Oriented Plan (CO-OP) program.
    (2) Purpose.--It is the purpose of the CO-OP program to
    foster the creation of qualified nonprofit health insurance
    issuers to offer qualified health plans in the individual and
    small group markets in the States in which the issuers are
    licensed to offer such plans.

    (b) Loans and Grants Under the CO-OP Program.--
    (1) In general.--The Secretary shall provide through the CO-
    OP program for the awarding to persons applying to become
    qualified nonprofit health insurance issuers of--
    (A) loans to provide assistance to such person in
    meeting its start-up costs; and
    (B) grants to provide assistance to such person in
    meeting any solvency requirements of States in which the
    person seeks to be licensed to issue qualified health
    plans.
    (2) Requirements for awarding loans and grants.--
    (A) In general.--In awarding loans and grants under
    the CO-OP program, the Secretary shall--
    (i) take into account the recommendations of
    the advisory board established under paragraph
    (3);
    (ii) give priority to applicants that will
    offer qualified health plans on a Statewide basis,
    will utilize integrated care models, and have
    significant private support; and
    (iii) ensure that there is sufficient funding
    to establish at least 1 qualified nonprofit health
    insurance

    [[Page 188]]

    issuer in each State, except that nothing in this
    clause shall prohibit the Secretary from funding
    the establishment of multiple qualified nonprofit
    health insurance issuers in any State if the
    funding is sufficient to do so.
    (B) States without issuers in program.--If no health
    insurance issuer applies to be a qualified nonprofit
    health insurance issuer within a State, the Secretary
    may use amounts appropriated under this section for the
    awarding of grants to encourage the establishment of a
    qualified nonprofit health insurance issuer within the
    State or the expansion of a qualified nonprofit health
    insurance issuer from another State to the State.
    (C) Agreement.--
    (i) In general.--The Secretary shall require
    any person receiving a loan or grant under the CO-
    OP program to enter into an agreement with the
    Secretary which requires such person to meet (and
    to continue to meet)--
    (I) any requirement under this
    section for such person to be treated as
    a qualified nonprofit health insurance
    issuer; and
    (II) any requirements contained in
    the agreement for such person to receive
    such loan or grant.
    (ii) Restrictions on use of federal funds.--
    The agreement shall include a requirement that no
    portion of the funds made available by any loan or
    grant under this section may be used--
    (I) <> for carrying
    on propaganda, or otherwise attempting,
    to influence legislation; or
    (II) for marketing.
    Nothing in this clause shall be construed to allow
    a person to take any action prohibited by section
    501(c)(29) of the Internal Revenue Code of 1986.
    (iii) Failure to meet
    requirements <> .--
    If the Secretary determines that a person has
    failed to meet any requirement described in clause
    (i) or (ii) and has failed to correct such failure
    within a reasonable period of time of when the
    person first knows (or reasonably should have
    known) of such failure, such person shall repay to
    the Secretary an amount equal to the sum of--
    (I) 110 percent of the aggregate
    amount of loans and grants received
    under this section; plus
    (II) interest on the aggregate
    amount of loans and grants received
    under this section for the period the
    loans or grants were outstanding.
    <> The Secretary shall notify
    the Secretary of the Treasury of any determination
    under this section of a failure that results in
    the termination of an issuer's tax-exempt status
    under section 501(c)(29) of such Code.
    (D) Time for awarding loans and
    grants. <> --The Secretary shall not
    later than July 1, 2013, award the loans and grants
    under the CO-OP program and begin the distribution of
    amounts awarded under such loans and grants.
    (3) <>  Advisory board.--

    [[Page 189]]

    (A) In general.--The advisory board under this
    paragraph shall consist of 15 members appointed by the
    Comptroller General of the United States from among
    individuals with qualifications described in section
    1805(c)(2) of the Social Security Act.
    (B) Rules relating to appointments.--
    (i) Standards.--Any individual appointed under
    subparagraph (A) shall meet ethics and conflict of
    interest standards protecting against insurance
    industry involvement and interference.
    (ii) Original
    appointments. <> --The original
    appointment of board members under subparagraph
    (A)(ii) shall be made no later than 3 months after
    the date of enactment of this Act.
    (C) Vacancy.--Any vacancy on the advisory board
    shall be filled in the same manner as the original
    appointment.
    (D) Pay and reimbursement.--
    (i) No compensation for members of advisory
    board.--Except as provided in clause (ii), a
    member of the advisory board may not receive pay,
    allowances, or benefits by reason of their service
    on the board.
    (ii) Travel expenses.--Each member shall
    receive travel expenses, including per diem in
    lieu of subsistence under subchapter I of chapter
    57 of title 5, United States Code.
    (E) Application of faca.--The Federal Advisory
    Committee Act (5 U.S.C. App.) shall apply to the
    advisory board, except that section 14 of such Act shall
    not apply.
    (F) Termination.--The advisory board shall terminate
    on the earlier of the date that it completes its duties
    under this section or December 31, 2015.

    (c) Qualified Nonprofit Health Insurance Issuer.--For purposes of
    this section--
    (1) In general.-- <> The term ``qualified
    nonprofit health insurance issuer'' means a health insurance
    issuer that is an organization--
    (A) that is organized under State law as a
    nonprofit, member corporation;
    (B) substantially all of the activities of which
    consist of the issuance of qualified health plans in the
    individual and small group markets in each State in
    which it is licensed to issue such plans; and
    (C) that meets the other requirements of this
    subsection.
    (2) Certain organizations prohibited.--An organization shall
    not be treated as a qualified nonprofit health insurance issuer
    if--
    (A) the organization or a related entity (or any
    predecessor of either) was a health insurance issuer on
    July 16, 2009; or
    (B) the organization is sponsored by a State or
    local government, any political subdivision thereof, or
    any instrumentality of such government or political
    subdivision.
    (3) Governance requirements.--An organization shall not be
    treated as a qualified nonprofit health insurance issuer
    unless--

    [[Page 190]]

    (A) the governance of the organization is subject to
    a majority vote of its members;
    (B) its governing documents incorporate ethics and
    conflict of interest standards protecting against
    insurance industry involvement and interference; and
    (C) as provided in regulations promulgated by the
    Secretary, the organization is required to operate with
    a strong consumer focus, including timeliness,
    responsiveness, and accountability to members.
    (4) Profits inure to benefit of members.--An organization
    shall not be treated as a qualified nonprofit health insurance
    issuer unless any profits made by the organization are required
    to be used to lower premiums, to improve benefits, or for other
    programs intended to improve the quality of health care
    delivered to its members.
    (5) Compliance with state insurance laws.--An organization
    shall not be treated as a qualified nonprofit health insurance
    issuer unless the organization meets all the requirements that
    other issuers of qualified health plans are required to meet in
    any State where the issuer offers a qualified health plan,
    including solvency and licensure requirements, rules on payments
    to providers, and compliance with network adequacy rules, rate
    and form filing rules, any applicable State premium assessments
    and any other State law described in section 1324(b).
    (6) Coordination with state insurance reforms.--An
    organization shall not be treated as a qualified nonprofit
    health insurance issuer unless the organization does not offer a
    health plan in a State until that State has in effect (or the
    Secretary has implemented for the State) the market reforms
    required by part A of title XXVII of the Public Health Service
    Act (as amended by subtitles A and C of this Act).

    (d) Establishment of Private Purchasing Council.--
    (1) In general.--Qualified nonprofit health insurance
    issuers participating in the CO-OP program under this section
    may establish a private purchasing council to enter into
    collective purchasing arrangements for items and services that
    increase administrative and other cost efficiencies, including
    claims administration, administrative services, health
    information technology, and actuarial services.
    (2) Council may not set payment rates.--The private
    purchasing council established under paragraph (1) shall not set
    payment rates for health care facilities or providers
    participating in health insurance coverage provided by qualified
    nonprofit health insurance issuers.
    (3) Continued application of antitrust laws.--
    (A) In general.--Nothing in this section shall be
    construed to limit the application of the antitrust laws
    to any private purchasing council (whether or not
    established under this subsection) or to any qualified
    nonprofit health insurance issuer participating in such
    a council.
    (B) Antitrust laws.--For purposes of this
    subparagraph, the term ``antitrust laws'' has the
    meaning given the term in subsection (a) of the first
    section of the Clayton Act (15 U.S.C. 12(a)). Such term
    also includes section 5 of the Federal Trade Commission
    Act (15 U.S.C. 45) to

    [[Page 191]]

    the extent that such section 5 applies to unfair methods
    of competition.

    (e) Limitation on Participation.--No representative of any Federal,
    State, or local government (or of any political subdivision or
    instrumentality thereof), and no representative of a person described in
    subsection (c)(2)(A), may serve on the board of directors of a qualified
    nonprofit health insurance issuer or with a private purchasing council
    established under subsection (d).
    (f) Limitations on Secretary.--
    (1) In general.--The Secretary shall not--
    (A) participate in any negotiations between 1 or
    more qualified nonprofit health insurance issuers (or a
    private purchasing council established under subsection
    (d)) and any health care facilities or providers,
    including any drug manufacturer, pharmacy, or hospital;
    and
    (B) establish or maintain a price structure for
    reimbursement of any health benefits covered by such
    issuers.
    (2) Competition.--Nothing in this section shall be construed
    as authorizing the Secretary to interfere with the competitive
    nature of providing health benefits through qualified nonprofit
    health insurance issuers.

    (g) Appropriations.--There are hereby appropriated, out of any funds
    in the Treasury not otherwise appropriated, $6,000,000,000 to carry out
    this section.
    (h) Tax Exemption for Qualified Nonprofit Health Insurance Issuer.--
    (1) In general.--Section 501(c) of the Internal Revenue Code
    of 1986 <>  (relating to list of exempt
    organizations) is amended by adding at the end the following:
    ``(29) CO-OP health insurance issuers.--
    ``(A) In general.--A qualified nonprofit health
    insurance issuer (within the meaning of section 1322 of
    the Patient Protection and Affordable Care Act) which
    has received a loan or grant under the CO-OP program
    under such section, but only with respect to periods for
    which the issuer is in compliance with the requirements
    of such section and any agreement with respect to the
    loan or grant.
    ``(B) Conditions for
    exemption <> .--Subparagraph (A)
    shall apply to an organization only if--
    ``(i) <> the organization has
    given notice to the Secretary, in such manner as
    the Secretary may by regulations prescribe, that
    it is applying for recognition of its status under
    this paragraph,
    ``(ii) except as provided in section
    1322(c)(4) of the Patient Protection and
    Affordable Care Act, no part of the net earnings
    of which inures to the benefit of any private
    shareholder or individual,
    ``(iii) <> no substantial
    part of the activities of which is carrying on
    propaganda, or otherwise attempting, to influence
    legislation, and
    ``(iv) the organization does not participate
    in, or intervene in (including the publishing or
    distributing of statements), any political
    campaign on behalf of (or in opposition to) any
    candidate for public office.''.

    [[Page 192]]

    (2) Additional reporting requirement.--Section 6033 of such
    Code (relating to returns by exempt organizations) is amended by
    redesignating subsection (m) as subsection (n) and by inserting
    after subsection (l) the following:

    ``(m) Additional Information Required From CO-OP Insurers.--An
    organization described in section 501(c)(29) shall include on the return
    required under subsection (a) the following information:
    ``(1) The amount of the reserves required by each State in
    which the organization is licensed to issue qualified health
    plans.
    ``(2) The amount of reserves on hand.''.
    (3) Application of tax on excess benefit transactions.--
    Section 4958(e)(1) of such Code (defining applicable tax-exempt
    organization) is amended by striking ``paragraph (3) or (4)''
    and inserting ``paragraph (3), (4), or (29)''.

    (i) GAO Study and Report.--
    (1) Study.--The Comptroller General of the General
    Accountability Office shall conduct an ongoing study on
    competition and market concentration in the health insurance
    market in the United States after the implementation of the
    reforms in such market under the provisions of, and the
    amendments made by, this Act. Such study shall include an
    analysis of new issuers of health insurance in such market.
    (2) Report.-- <> The Comptroller
    General shall, not later than December 31 of each even-numbered
    year (beginning with 2014), report to the appropriate committees
    of the Congress the results of the study conducted under
    paragraph (1), including any recommendations for administrative
    or legislative changes the Comptroller General determines
    necessary or appropriate to increase competition in the health
    insurance market.

    SEC. 1323. <> COMMUNITY HEALTH INSURANCE OPTION.

    (a) Voluntary Nature.--
    (1) No requirement for health care providers to
    participate.--Nothing in this section shall be construed to
    require a health care provider to participate in a community
    health insurance option, or to impose any penalty for non-
    participation.
    (2) No requirement for individuals to join.--Nothing in this
    section shall be construed to require an individual to
    participate in a community health insurance option, or to impose
    any penalty for non-participation.
    (3) State opt out.--
    (A) In general.--A State may elect to prohibit
    Exchanges in such State from offering a community health
    insurance option if such State enacts a law to provide
    for such prohibition.
    (B) Termination of opt out.--A State may repeal a
    law described in subparagraph (A) and provide for the
    offering of such an option through the Exchange.

    (b) Establishment of Community Health Insurance Option.--
    (1) Establishment.--The Secretary shall establish a
    community health insurance option to offer, through the
    Exchanges established under this title (other than Exchanges

    [[Page 193]]

    in States that elect to opt out as provided for in subsection
    (a)(3)), health care coverage that provides value, choice,
    competition, and stability of affordable, high quality coverage
    throughout the United States.
    (2) Community health insurance option.--
    <> In this section, the term ``community
    health insurance option'' means health insurance coverage that--
    (A) except as specifically provided for in this
    section, complies with the requirements for being a
    qualified health plan;
    (B) provides high value for the premium charged;
    (C) reduces administrative costs and promotes
    administrative simplification for beneficiaries;
    (D) promotes high quality clinical care;
    (E) provides high quality customer service to
    beneficiaries;
    (F) offers a sufficient choice of providers; and
    (G) complies with State laws (if any), except as
    otherwise provided for in this title, relating to the
    laws described in section 1324(b).
    (3) Essential health benefits.--
    (A) General rule.--Except as provided in
    subparagraph (B), a community health insurance option
    offered under this section shall provide coverage only
    for the essential health benefits described in section
    1302(b).
    (B) States may offer additional benefits.--Nothing
    in this section shall preclude a State from requiring
    that benefits in addition to the essential health
    benefits required under subparagraph (A) be provided to
    enrollees of a community health insurance option offered
    in such State.
    (C) Credits.--
    (i) In general.--An individual enrolled in a
    community health insurance option under this
    section shall be eligible for credits under
    section 36B of the Internal Revenue Code of 1986
    in the same manner as an individual who is
    enrolled in a qualified health plan.
    (ii) No additional federal cost.--A
    requirement by a State under subparagraph (B) that
    benefits in addition to the essential health
    benefits required under subparagraph (A) be
    provided to enrollees of a community health
    insurance option shall not affect the amount of a
    premium tax credit provided under section 36B of
    the Internal Revenue Code of 1986 with respect to
    such plan.
    (D) State must assume cost <> .--A
    State shall make payments to or on behalf of an eligible
    individual to defray the cost of any additional benefits
    described in subparagraph (B).
    (E) Ensuring access to all services.--Nothing in
    this Act shall prohibit an individual enrolled in a
    community health insurance option from paying out-of-
    pocket the full cost of any item or service not included
    as an essential health benefit or otherwise covered as a
    benefit by a health plan. Nothing in subparagraph (B)
    shall prohibit any type of medical provider from
    accepting an out-of-pocket payment from an individual
    enrolled in a community health

    [[Page 194]]

    insurance option for a service otherwise not included as
    an essential health benefit.
    (F) Protecting access to end of life care.--A
    community health insurance option offered under this
    section shall be prohibited from limiting access to end
    of life care.
    (4) Cost sharing.--A community health insurance option shall
    offer coverage at each of the levels of coverage described in
    section 1302(d).
    (5) Premiums.--
    (A) Premiums sufficient to cover costs.--The
    Secretary shall establish geographically adjusted
    premium rates in an amount sufficient to cover expected
    costs (including claims and administrative costs) using
    methods in general use by qualified health plans.
    (B) Applicable rules.--The provisions of title XXVII
    of the Public Health Service Act relating to premiums
    shall apply to community health insurance options under
    this section, including modified community rating
    provisions under section 2701 of such Act.
    (C) Collection of data.--The Secretary shall collect
    data as necessary to set premium rates under
    subparagraph (A).
    (D) National pooling.--Notwithstanding any other
    provision of law, the Secretary may treat all enrollees
    in community health insurance options as members of a
    single pool.
    (E) Contingency margin.--In establishing premium
    rates under subparagraph (A), the Secretary shall
    include an appropriate amount for a contingency margin.
    (6) Reimbursement rates.--
    (A) Negotiated rates.--The Secretary shall negotiate
    rates for the reimbursement of health care providers for
    benefits covered under a community health insurance
    option.
    (B) Limitation.--The rates described in subparagraph
    (A) shall not be higher, in aggregate, than the average
    reimbursement rates paid by health insurance issuers
    offering qualified health plans through the Exchange.
    (C) Innovation.--Subject to the limits contained in
    subparagraph (A), a State Advisory Council established
    or designated under subsection (d) may develop or
    encourage the use of innovative payment policies that
    promote quality, efficiency and savings to consumers.
    (7) Solvency and consumer protection.--
    (A) <>  Solvency.--The Secretary
    shall establish a Federal solvency standard to be
    applied with respect to a community health insurance
    option. A community health insurance option shall also
    be subject to the solvency standard of each State in
    which such community health insurance option is offered.
    (B) Minimum required.--In establishing the standard
    described under subparagraph (A), the Secretary shall
    require a reserve fund that shall be equal to at least
    the dollar value of the incurred but not reported claims
    of a community health insurance option.

    [[Page 195]]

    (C) Consumer
    protections <> .--The consumer
    protection laws of a State shall apply to a community
    health insurance option.
    (8) Requirements established in partnership with insurance
    commissioners.--
    (A) In general.--The Secretary, in collaboration
    with the National Association of Insurance Commissioners
    (in this paragraph referred to as the ``NAIC''), may
    promulgate regulations to establish additional
    requirements for a community health insurance option.
    (B) Applicability <> .--Any
    requirement promulgated under subparagraph (A) shall be
    applicable to such option beginning 90 days after the
    date on which the regulation involved becomes final.

    (c) Start-up Fund.--
    (1) Establishment of fund.--
    (A) In general.--There is established in the
    Treasury of the United States a trust fund to be known
    as the ``Health Benefit Plan Start-Up Fund'' (referred
    to in this section as the ``Start-Up Fund''), that shall
    consist of such amounts as may be appropriated or
    credited to the Start-Up Fund as provided for in this
    subsection to provide loans for the initial operations
    of a community health insurance option. Such amounts
    shall remain available until expended.
    (B) Funding.--There is hereby appropriated to the
    Start-Up Fund, out of any moneys in the Treasury not
    otherwise appropriated an amount requested by the
    Secretary of Health and Human Services as necessary to--
    (i) pay the start-up costs associated with the
    initial operations of a community health insurance
    option; and
    (ii) pay the costs of making payments on
    claims submitted during the period that is not
    more than 90 days from the date on which such
    option is offered.
    (2) Use of start-up fund.--The Secretary shall use amounts
    contained in the Start-Up Fund to make payments (subject to the
    repayment requirements in paragraph (4)) for the purposes
    described in paragraph (1)(B).
    (3) Pass through of rebates.--The Secretary may establish
    procedures for reducing the amount of payments to a contracting
    administrator to take into account any rebates or price
    concessions.
    (4) Repayment.--
    (A) <>  In general.--A community
    health insurance option shall be required to repay the
    Secretary of the Treasury (on such terms as the
    Secretary may require) for any payments made under
    paragraph (1)(B) by the date that is not later than 9
    years after the date on which the payment is made. The
    Secretary may require the payment of interest with
    respect to such repayments at rates that do not exceed
    the market interest rate (as determined by the
    Secretary).
    (B) Sanctions in case of for-profit conversion.--In
    any case in which the Secretary enters into a contract
    with a qualified entity for the offering of a community
    health insurance option and such entity is determined to

    [[Page 196]]

    be a for-profit entity by the Secretary, such entity
    shall be--
    (i) immediately liable to the Secretary for
    any payments received by such entity from the
    Start-Up Fund; and
    (ii) permanently ineligible to offer a
    qualified health plan.

    (d) State Advisory Council.--
    (1) Establishment.--A State (other than a State that elects
    to opt out as provided for in subsection (a)(3)) shall establish
    or designate a public or non-profit private entity to serve as
    the State Advisory Council to provide recommendations to the
    Secretary on the operations and policies of a community health
    insurance option in the State. Such Council shall provide
    recommendations on at least the following:
    (A) policies and procedures to integrate quality
    improvement and cost containment mechanisms into the
    health care delivery system;
    (B) mechanisms to facilitate public awareness of the
    availability of a community health insurance option; and
    (C) alternative payment structures under a community
    health insurance option for health care providers that
    encourage quality improvement and cost control.
    (2) Members.--The members of the State Advisory Council
    shall be representatives of the public and shall include health
    care consumers and providers.
    (3) Applicability of recommendations.--The Secretary may
    apply the recommendations of a State Advisory Council to a
    community health insurance option in that State, in any other
    State, or in all States.

    (e) Authority To Contract; Terms of Contract.--
    (1) Authority.--
    (A) In general.--The Secretary may enter into a
    contract or contracts with one or more qualified
    entities for the purpose of performing administrative
    functions (including functions described in subsection
    (a)(4) of section 1874A of the Social Security Act) with
    respect to a community health insurance option in the
    same manner as the Secretary may enter into contracts
    under subsection (a)(1) of such section. The Secretary
    shall have the same authority with respect to a
    community health insurance option under this section as
    the Secretary has under subsections (a)(1) and (b) of
    section 1874A of the Social Security Act with respect to
    title XVIII of such Act.
    (B) Requirements apply.--If the Secretary enters
    into a contract with a qualified entity to offer a
    community health insurance option, under such contract
    such entity--
    (i) shall meet the criteria established under
    paragraph (2); and
    (ii) <> shall receive an
    administrative fee under paragraph (7).
    (C) Limitation.--Contracts under this subsection
    shall not involve the transfer of insurance risk to the
    contracting administrator.
    (D) Reference.--An entity with which the Secretary
    has entered into a contract under this paragraph shall
    be referred to as a ``contracting administrator''.

    [[Page 197]]

    (2) Qualified entity.--To be qualified to be selected by the
    Secretary to offer a community health insurance option, an
    entity shall--
    (A) meet the criteria established under section
    1874A(a)(2) of the Social Security Act;
    (B) be a nonprofit entity for purposes of offering
    such option;
    (C) meet the solvency standards applicable under
    subsection (b)(7);
    (D) be eligible to offer health insurance or health
    benefits coverage;
    (E) meet quality standards specified by the
    Secretary;
    (F) have in place effective procedures to control
    fraud, abuse, and waste; and
    (G) meet such other requirements as the Secretary
    may impose.
    Procedures described under subparagraph (F) shall include the
    implementation of procedures to use beneficiary identifiers to
    identify individuals entitled to benefits so that such an
    individual's social security account number is not used, and
    shall also include procedures for the use of technology
    (including front-end, prepayment intelligent data-matching
    technology similar to that used by hedge funds, investment
    funds, and banks) to provide real-time data analysis of claims
    for payment under this title to identify and investigate unusual
    billing or order practices under this title that could indicate
    fraud or abuse.
    (3) Term.--A contract provided for under paragraph (1) shall
    be for a term of at least 5 years but not more than 10 years, as
    determined by the Secretary. At the end of each such term, the
    Secretary shall conduct a competitive bidding process for the
    purposes of renewing existing contracts or selecting new
    qualified entities with which to enter into contracts under such
    paragraph.
    (4) <>  Limitation.--A contract may
    not be renewed under this subsection unless the Secretary
    determines that the contracting administrator has met
    performance requirements established by the Secretary in the
    areas described in paragraph (7)(B).
    (5) Audits.--The Inspector General shall conduct periodic
    audits with respect to contracting administrators under this
    subsection to ensure that the administrator involved is in
    compliance with this section.
    (6) Revocation.-- <> A contract awarded
    under this subsection shall be revoked by the Secretary, upon
    the recommendation of the Inspector General, only after notice
    to the contracting administrator involved and an opportunity for
    a hearing. The Secretary may revoke such contract if the
    Secretary determines that such administrator has engaged in
    fraud, deception, waste, abuse of power, negligence,
    mismanagement of taxpayer dollars, or gross mismanagement. An
    entity that has had a contract revoked under this paragraph
    shall not be qualified to enter into a subsequent contract under
    this subsection.
    (7) Fee for administration.--
    (A) In general.--The Secretary shall pay the
    contracting administrator a fee for the management,
    administration, and delivery of the benefits under this
    section.

    [[Page 198]]

    (B) Requirement for high quality administration.--
    The Secretary may increase the fee described in
    subparagraph (A) by not more than 10 percent, or reduce
    the fee described in subparagraph (A) by not more than
    50 percent, based on the extent to which the contracting
    administrator, in the determination of the Secretary,
    meets performance requirements established by the
    Secretary, in at least the following areas:
    (i) Maintaining low premium costs and low cost
    sharing requirements, provided that such
    requirements are consistent with section 1302.
    (ii) Reducing administrative costs and
    promoting administrative simplification for
    beneficiaries.
    (iii) Promoting high quality clinical care.
    (iv) Providing high quality customer service
    to beneficiaries.
    (C) Non-renewal.--The Secretary may not renew a
    contract to offer a community health insurance option
    under this section with any contracting entity that has
    been assessed more than one reduction under subparagraph
    (B) during the contract period.
    (8) Limitation.--Notwithstanding the terms of a contract
    under this subsection, the Secretary shall negotiate the
    reimbursement rates for purposes of subsection (b)(6).

    (f) Report by HHS and Insolvency Warnings.--
    (1) In general.--On an annual basis, the Secretary shall
    conduct a study on the solvency of a community health insurance
    option and submit to Congress a report describing the results of
    such study.
    (2) Result.--If, in any year, the result of the study under
    paragraph (1) is that a community health insurance option is
    insolvent, such result shall be treated as a community health
    insurance option solvency warning.
    (3) Submission of plan and procedure.--
    (A) In general <> .--If
    there is a community health insurance option solvency
    warning under paragraph (2) made in a year, the
    President shall submit to Congress, within the 15-day
    period beginning on the date of the budget submission to
    Congress under section 1105(a) of title 31, United
    States Code, for the succeeding year, proposed
    legislation to respond to such warning.
    (B) Procedure.--In the case of a legislative
    proposal submitted by the President pursuant to
    subparagraph (A), such proposal shall be considered by
    Congress using the same procedures described under
    sections 803 and 804 of the Medicare Prescription Drug,
    Improvement, and Modernization Act of 2003 that shall be
    used for a medicare funding warning.

    (g) Marketing Parity.--In a facility controlled by the Federal
    Government, or by a State, where marketing or promotional materials
    related to a community health insurance option are made available to the
    public, making available marketing or promotional materials relating to
    private health insurance plans shall not be prohibited. Such materials
    include informational pamphlets, guidebooks, enrollment forms, or other
    materials determined reasonable for display.

    [[Page 199]]

    (h) Authorization of Appropriations.--There is authorized to be
    appropriated such sums as may be necessary to carry out this section.

    SEC. 1324. <>  LEVEL PLAYING FIELD.

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

    PART IV--STATE FLEXIBILITY TO ESTABLISH ALTERNATIVE PROGRAMS

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

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

    [[Page 200]]

    enrolled in the applicable second lowest cost
    silver plan (as defined in section 36B(b)(3)(B) of
    the Internal Revenue Code of 1986) offered to the
    individual through an Exchange; and
    (ii) that the cost-sharing an eligible
    individual is required to pay under the standard
    health plan does not exceed--
    (I) the cost-sharing required under
    a platinum plan in the case of an
    eligible individual with household
    income not in excess of 150 percent of
    the poverty line for the size of the
    family involved; and
    (II) the cost-sharing required under
    a gold plan in the case of an eligible
    individual not described in subclause
    (I); and
    (B) the benefits provided under the standard health
    plans offered through the program cover at least the
    essential health benefits described in section 1302(b).
    For purposes of subparagraph (A)(i), the amount of the monthly
    premium an individual is required to pay under either the
    standard health plan or the applicable second lowest cost silver
    plan shall be determined after reduction for any premium tax
    credits and cost-sharing reductions allowable with respect to
    either plan.

    (b) Standard Health Plan. <> --In this section,
    the term ``standard heath plan'' means a health benefits plan that the
    State contracts with under this section--
    (1) under which the only individuals eligible to enroll are
    eligible individuals;
    (2) that provides at least the essential health benefits
    described in section 1302(b); and
    (3) in the case of a plan that provides health insurance
    coverage offered by a health insurance issuer, that has a
    medical loss ratio of at least 85 percent.

    (c) Contracting Process.--
    (1) In general.--A State basic health program shall
    establish a competitive process for entering into contracts with
    standard health plans under subsection (a), including
    negotiation of premiums and cost-sharing and negotiation of
    benefits in addition to the essential health benefits described
    in section 1302(b).
    (2) Specific items to be considered.--A State shall, as part
    of its competitive process under paragraph (1), include at least
    the following:
    (A) Innovation.--Negotiation with offerors of a
    standard health plan for the inclusion of innovative
    features in the plan, including--
    (i) care coordination and care management for
    enrollees, especially for those with chronic
    health conditions;
    (ii) incentives for use of preventive
    services; and
    (iii) the establishment of relationships
    between providers and patients that maximize
    patient involvement in health care decision-
    making, including providing incentives for
    appropriate utilization under the plan.

    [[Page 201]]

    (B) Health and resource differences.--Consideration
    of, and the making of suitable allowances for,
    differences in health care needs of enrollees and
    differences in local availability of, and access to,
    health care providers. Nothing in this subparagraph
    shall be construed as allowing discrimination on the
    basis of pre-existing conditions or other health status-
    related factors.
    (C) Managed care.--Contracting with managed care
    systems, or with systems that offer as many of the
    attributes of managed care as are feasible in the local
    health care market.
    (D) Performance measures.--Establishing specific
    performance measures and standards for issuers of
    standard health plans that focus on quality of care and
    improved health outcomes, requiring such plans to report
    to the State with respect to the measures and standards,
    and making the performance and quality information
    available to enrollees in a useful form.
    (3) Enhanced availability.--
    (A) Multiple plans.--A State shall, to the maximum
    extent feasible, seek to make multiple standard health
    plans available to eligible individuals within a State
    to ensure individuals have a choice of such plans.
    (B) Regional compacts.--A State may negotiate a
    regional compact with other States to include coverage
    of eligible individuals in all such States in agreements
    with issuers of standard health plans.
    (4) Coordination with other state programs.--A State shall
    seek to coordinate the administration of, and provision of
    benefits under, its program under this section with the State
    medicaid program under title XIX of the Social Security Act, the
    State child health plan under title XXI of such Act, and other
    State-administered health programs to maximize the efficiency of
    such programs and to improve the continuity of care.

    (d) Transfer of Funds to States.--
    (1) <>  In general.--If the Secretary
    determines that a State electing the application of this section
    meets the requirements of the program established under
    subsection (a), the Secretary shall transfer to the State for
    each fiscal year for which 1 or more standard health plans are
    operating within the State the amount determined under paragraph
    (3).
    (2) Use of funds.--A State shall establish a trust for the
    deposit of the amounts received under paragraph (1) and amounts
    in the trust fund shall only be used to reduce the premiums and
    cost-sharing of, or to provide additional benefits for, eligible
    individuals enrolled in standard health plans within the State.
    Amounts in the trust fund, and expenditures of such amounts,
    shall not be included in determining the amount of any non-
    Federal funds for purposes of meeting any matching or
    expenditure requirement of any federally-funded program.
    (3) Amount of payment.--
    (A) Secretarial determination.--
    (i) In general.--The amount determined under
    this paragraph for any fiscal year is the amount
    the Secretary determines is equal to 85 percent of
    the premium tax credits under section 36B of the
    Internal

    [[Page 202]]

    Revenue Code of 1986, and the cost-sharing
    reductions under section 1402, that would have
    been provided for the fiscal year to eligible
    individuals enrolled in standard health plans in
    the State if such eligible individuals were
    allowed to enroll in qualified health plans
    through an Exchange established under this
    subtitle.
    (ii) Specific requirements.--The Secretary
    shall make the determination under clause (i) on a
    per enrollee basis and shall take into account all
    relevant factors necessary to determine the value
    of the premium tax credits and cost-sharing
    reductions that would have been provided to
    eligible individuals described in clause (i),
    including the age and income of the enrollee,
    whether the enrollment is for self-only or family
    coverage, geographic differences in average
    spending for health care across rating areas, the
    health status of the enrollee for purposes of
    determining risk adjustment payments and
    reinsurance payments that would have been made if
    the enrollee had enrolled in a qualified health
    plan through an Exchange, and whether any
    reconciliation of the credit or cost-sharing
    reductions would have occurred if the enrollee had
    been so enrolled. This determination shall take
    into consideration the experience of other States
    with respect to participation in an Exchange and
    such credits and reductions provided to residents
    of the other States, with a special focus on
    enrollees with income below 200 percent of
    poverty.
    (iii) Certification.--The Chief Actuary of the
    Centers for Medicare & Medicaid Services, in
    consultation with the Office of Tax Analysis of
    the Department of the Treasury, shall certify
    whether the methodology used to make
    determinations under this subparagraph, and such
    determinations, meet the requirements of clause
    (ii). Such certifications shall be based on
    sufficient data from the State and from comparable
    States about their experience with programs
    created by this Act.
    (B) Corrections.--The Secretary shall adjust the
    payment for any fiscal year to reflect any error in the
    determinations under subparagraph (A) for any preceding
    fiscal year.
    (4) Application of special rules.--The provisions of section
    1303 shall apply to a State basic health program, and to
    standard health plans offered through such program, in the same
    manner as such rules apply to qualified health plans.

    (e) Eligible Individual.--
    (1) <>  In general.--In this section, the
    term ``eligible individual'' means, with respect to any State,
    an individual--
    (A) who a resident of the State who is not eligible
    to enroll in the State's medicaid program under title
    XIX of the Social Security Act for benefits that at a
    minimum consist of the essential health benefits
    described in section 1302(b);

    [[Page 203]]

    (B) whose household income exceeds 133 percent but
    does not exceed 200 percent of the poverty line for the
    size of the family involved;
    (C) who is not eligible for minimum essential
    coverage (as defined in section 5000A(f) of the Internal
    Revenue Code of 1986) or is eligible for an employer-
    sponsored plan that is not affordable coverage (as
    determined under section 5000A(e)(2) of such Code); and
    (D) who has not attained age 65 as of the beginning
    of the plan year.
    Such term shall not include any individual who is not a
    qualified individual under section 1312 who is eligible to be
    covered by a qualified health plan offered through an Exchange.
    (2) Eligible individuals may not use exchange.--An eligible
    individual shall not be treated as a qualified individual under
    section 1312 eligible for enrollment in a qualified health plan
    offered through an Exchange established under section 1311.

    (f) Secretarial Oversight <> .--The Secretary shall
    each year conduct a review of each State program to ensure compliance
    with the requirements of this section, including ensuring that the State
    program meets--
    (1) eligibility verification requirements for participation
    in the program;
    (2) the requirements for use of Federal funds received by
    the program; and
    (3) the quality and performance standards under this
    section.

    (g) Standard Health Plan Offerors.--A State may provide that persons
    eligible to offer standard health plans under a basic health program
    established under this section may include a licensed health maintenance
    organization, a licensed health insurance insurer, or a network of
    health care providers established to offer services under the program.
    (h) Definitions.--Any term used in this section which is also used
    in section 36B of the Internal Revenue Code of 1986 shall have the
    meaning given such term by such section.

    SEC. 1332. <>  WAIVER FOR STATE INNOVATION.

    (a) Application.--
    (1) <>  In general.--A State may
    apply to the Secretary for the waiver of all or any requirements
    described in paragraph (2) with respect to health insurance
    coverage within that State for plan years beginning on or after
    January 1, 2017. Such application shall--
    (A) be filed at such time and in such manner as the
    Secretary may require;
    (B) contain such information as the Secretary may
    require, including--
    (i) a comprehensive description of the State
    legislation and program to implement a plan
    meeting the requirements for a waiver under this
    section; and
    (ii) a 10-year budget plan for such plan that
    is budget neutral for the Federal Government; and
    (C) provide an assurance that the State has enacted
    the law described in subsection (b)(2).

    [[Page 204]]

    (2) Requirements.-- <> The
    requirements described in this paragraph with respect to health
    insurance coverage within the State for plan years beginning on
    or after January 1, 2014, are as follows:
    (A) Part I of subtitle D.
    (B) Part II of subtitle D.
    (C) Section 1402.
    (D) Sections 36B, 4980H, and 5000A of the Internal
    Revenue Code of 1986.
    (3) Pass through of funding.--With respect to a State waiver
    under paragraph (1), under which, due to the structure of the
    State plan, individuals and small employers in the State would
    not qualify for the premium tax credits, cost-sharing
    reductions, or small business credits under sections 36B of the
    Internal Revenue Code of 1986 or under part I of subtitle E for
    which they would otherwise be eligible, the Secretary shall
    provide for an alternative means by which the aggregate amount
    of such credits or reductions that would have been paid on
    behalf of participants in the Exchanges established under this
    title had the State not received such waiver, shall be paid to
    the State for purposes of implementing the State plan under the
    waiver. Such amount shall be determined annually by the
    Secretary, taking into consideration the experience of other
    States with respect to participation in an Exchange and credits
    and reductions provided under such provisions to residents of
    the other States.
    (4) Waiver consideration and transparency.--
    (A) In general.--An application for a waiver under
    this section shall be considered by the Secretary in
    accordance with the regulations described in
    subparagraph (B).
    (B) Regulations <> .--Not later
    than 180 days after the date of enactment of this Act,
    the Secretary shall promulgate regulations relating to
    waivers under this section that provide--
    (i) a process for public notice and comment at
    the State level, including public hearings,
    sufficient to ensure a meaningful level of public
    input;
    (ii) a process for the submission of an
    application that ensures the disclosure of--
    (I) the provisions of law that the
    State involved seeks to waive; and
    (II) the specific plans of the State
    to ensure that the waiver will be in
    compliance with subsection (b);
    (iii) a process for providing public notice
    and comment after the application is received by
    the Secretary, that is sufficient to ensure a
    meaningful level of public input and that does not
    impose requirements that are in addition to, or
    duplicative of, requirements imposed under the
    Administrative Procedures Act, or requirements
    that are unreasonable or unnecessarily burdensome
    with respect to State compliance;
    (iv) a process for the submission to the
    Secretary of periodic reports by the State
    concerning the implementation of the program under
    the waiver; and
    (v) a process for the periodic evaluation by
    the Secretary of the program under the waiver.

    [[Page 205]]

    (C) Report.--The Secretary shall annually report to
    Congress concerning actions taken by the Secretary with
    respect to applications for waivers under this section.
    (5) Coordinated waiver process.--The Secretary shall develop
    a process for coordinating and consolidating the State waiver
    processes applicable under the provisions of this section, and
    the existing waiver processes applicable under titles XVIII,
    XIX, and XXI of the Social Security Act, and any other Federal
    law relating to the provision of health care items or services.
    Such process shall permit a State to submit a single application
    for a waiver under any or all of such provisions.
    (6) Definition.--In this section, the term ``Secretary''
    means--
    (A) the Secretary of Health and Human Services with
    respect to waivers relating to the provisions described
    in subparagraph (A) through (C) of paragraph (2); and
    (B) the Secretary of the Treasury with respect to
    waivers relating to the provisions described in
    paragraph (2)(D).

    (b) Granting of Waivers.--
    (1) In general.--The Secretary may grant a request for a
    waiver under subsection (a)(1) only if the Secretary determines
    that the State plan--
    (A) will provide coverage that is at least as
    comprehensive as the coverage defined in section 1302(b)
    and offered through Exchanges established under this
    title as certified by Office of the Actuary of the
    Centers for Medicare & Medicaid Services based on
    sufficient data from the State and from comparable
    States about their experience with programs created by
    this Act and the provisions of this Act that would be
    waived;
    (B) will provide coverage and cost sharing
    protections against excessive out-of-pocket spending
    that are at least as affordable as the provisions of
    this title would provide;
    (C) will provide coverage to at least a comparable
    number of its residents as the provisions of this title
    would provide; and
    (D) will not increase the Federal deficit.
    (2) Requirement to enact a law.--
    (A) In general.--A law described in this paragraph
    is a State law that provides for State actions under a
    waiver under this section, including the implementation
    of the State plan under subsection (a)(1)(B).
    (B) Termination of opt out.--A State may repeal a
    law described in subparagraph (A) and terminate the
    authority provided under the waiver with respect to the
    State.

    (c) Scope of Waiver.--
    (1) <>  In general.--The Secretary
    shall determine the scope of a waiver of a requirement described
    in subsection (a)(2) granted to a State under subsection (a)(1).
    (2) Limitation.--The Secretary may not waive under this
    section any Federal law or requirement that is not within the
    authority of the Secretary.

    (d) Determinations by Secretary.--
    (1) Time for determination.-- <> The
    Secretary shall make a determination under subsection (a)(1) not
    later than 180

    [[Page 206]]

    days after the receipt of an application from a State under such
    subsection.
    (2) Effect of determination.-- <>
    (A) Granting of waivers.--If the Secretary
    determines to grant a waiver under subsection (a)(1),
    the Secretary shall notify the State involved of such
    determination and the terms and effectiveness of such
    waiver.
    (B) Denial of waiver.--If the Secretary determines a
    waiver should not be granted under subsection (a)(1),
    the Secretary shall notify the State involved, and the
    appropriate committees of Congress of such determination
    and the reasons therefore.

    (e) <>  Term of Waiver.--No waiver
    under this section may extend over a period of longer than 5 years
    unless the State requests continuation of such waiver, and such request
    shall be deemed granted unless the Secretary, within 90 days after the
    date of its submission to the Secretary, either denies such request in
    writing or informs the State in writing with respect to any additional
    information which is needed in order to make a final determination with
    respect to the request.

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

    (a) Health Care Choice Compacts.--
    (1) In general.-- <> Not later
    than July 1, 2013, the Secretary shall, in consultation with the
    National Association of Insurance Commissioners, issue
    regulations for the creation of health care choice compacts
    under which 2 or more States may enter into an agreement under
    which--
    (A) 1 or more qualified health plans could be
    offered in the individual markets in all such States
    but, except as provided in subparagraph (B), only be
    subject to the laws and regulations of the State in
    which the plan was written or issued;
    (B) the issuer of any qualified health plan to which
    the compact applies--
    (i) would continue to be subject to market
    conduct, unfair trade practices, network adequacy,
    and consumer protection standards (including
    standards relating to rating), including
    addressing disputes as to the performance of the
    contract, of the State in which the purchaser
    resides;
    (ii) would be required to be licensed in each
    State in which it offers the plan under the
    compact or to submit to the jurisdiction of each
    such State with regard to the standards described
    in clause (i) (including allowing access to
    records as if the insurer were licensed in the
    State); and
    (iii) <> must clearly
    notify consumers that the policy may not be
    subject to all the laws and regulations of the
    State in which the purchaser resides.
    (2) State authority.--A State may not enter into an
    agreement under this subsection unless the State enacts a law
    after the date of the enactment of this title that specifically
    authorizes the State to enter into such agreements.
    (3) Approval of compacts.--The Secretary may approve
    interstate health care choice compacts under paragraph (1)

    [[Page 207]]

    only if the Secretary determines that such health care choice
    compact--
    (A) will provide coverage that is at least as
    comprehensive as the coverage defined in section 1302(b)
    and offered through Exchanges established under this
    title;
    (B) will provide coverage and cost sharing
    protections against excessive out-of-pocket spending
    that are at least as affordable as the provisions of
    this title would provide;
    (C) will provide coverage to at least a comparable
    number of its residents as the provisions of this title
    would provide;
    (D) will not increase the Federal deficit; and
    (E) will not weaken enforcement of laws and
    regulations described in paragraph (1)(B)(i) in any
    State that is included in such compact.
    (4) Effective date.--A health care choice compact described
    in paragraph (1) shall not take effect before January 1, 2016.

    (b) Authority for Nationwide Plans.--
    (1) In general.--Except as provided in paragraph (2), if an
    issuer (including a group of health insurance issuers affiliated
    either by common ownership and control or by the common use of a
    nationally licensed service mark) of a qualified health plan in
    the individual or small group market meets the requirements of
    this subsection (in this subsection a ``nationwide qualified
    health plan'')--
    (A) the issuer of the plan may offer the nationwide
    qualified health plan in the individual or small group
    market in more than 1 State; and
    (B) <> with respect to State
    laws mandating benefit coverage by a health plan, only
    the State laws of the State in which such plan is
    written or issued shall apply to the nationwide
    qualified health plan.
    (2) State opt-out.--A State may, by specific reference in a
    law enacted after the date of enactment of this title, provide
    that this subsection shall not apply to that State. Such opt-out
    shall be effective until such time as the State by law revokes
    it.
    (3) Plan requirements.--An issuer meets the requirements of
    this subsection with respect to a nationwide qualified health
    plan if, in the determination of the Secretary--
    (A) the plan offers a benefits package that is
    uniform in each State in which the plan is offered and
    meets the requirements set forth in paragraphs (4)
    through (6);
    (B) the issuer is licensed in each State in which it
    offers the plan and is subject to all requirements of
    State law not inconsistent with this section, including
    but not limited to, the standards and requirements that
    a State imposes that do not prevent the application of a
    requirement of part A of title XXVII of the Public
    Health Service Act or a requirement of this title;
    (C) the issuer meets all requirements of this title
    with respect to a qualified health plan, including the
    requirement to offer the silver and gold levels of the
    plan in each Exchange in the State for the market in
    which the plan is offered;

    [[Page 208]]

    (D) the issuer determines the premiums for the plan
    in any State on the basis of the rating rules in effect
    in that State for the rating areas in which it is
    offered;
    (E) the issuer offers the nationwide qualified
    health plan in at least 60 percent of the participating
    States in the first year in which the plan is offered,
    65 percent of such States in the second year, 70 percent
    of such States in the third year, 75 percent of such
    States in the fourth year, and 80 percent of such States
    in the fifth and subsequent years;
    (F) the issuer shall offer the plan in participating
    States across the country, in all geographic regions,
    and in all States that have adopted adjusted community
    rating before the date of enactment of this Act; and
    (G) the issuer clearly notifies consumers that the
    policy may not contain some benefits otherwise mandated
    for plans in the State in which the purchaser resides
    and provides a detailed statement of the benefits
    offered and the benefit differences in that State, in
    accordance with rules promulgated by the Secretary.
    (4) <>  Form review for nationwide plans.--
    Notwithstanding any contrary provision of State law, at least 3
    months before any nationwide qualified health plan is offered,
    the issuer shall file all nationwide qualified health plan forms
    with the regulator in each participating State in which the plan
    will be offered. An issuer may appeal the disapproval of a
    nationwide qualified health plan form to the Secretary.
    (5) Applicable rules.--The Secretary shall, in consultation
    with the National Association of Insurance Commissioners, issue
    rules for the offering of nationwide qualified health plans
    under this subsection. Nationwide qualified health plans may be
    offered only after such rules have taken effect.
    (6) Coverage.--The Secretary shall provide that the health
    benefits coverage provided to an individual through a nationwide
    qualified health plan under this subsection shall include at
    least the essential benefits package described in section 1302.
    (7) State law mandating benefit coverage by a health
    benefits plan.--For the purposes of this subsection, a State law
    mandating benefit coverage by a health plan is a law that
    mandates health insurance coverage or the offer of health
    insurance coverage for specific health services or specific
    diseases. A law that mandates health insurance coverage or
    reimbursement for services provided by certain classes of
    providers of health care services, or a law that mandates that
    certain classes of individuals must be covered as a group or as
    dependents, is not a State law mandating benefit coverage by a
    health benefits plan.

    PART V--REINSURANCE AND RISK ADJUSTMENT

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

    (a) In General <> .--Each State shall, not later
    than January 1, 2014--

    [[Page 209]]

    (1) include in the Federal standards or State law or
    regulation the State adopts and has in effect under section
    1321(b) the provisions described in subsection (b); and
    (2) <> establish (or enter into a contract
    with) 1 or more applicable reinsurance entities to carry out the
    reinsurance program under this section.

    (b) Model Regulation.--
    (1) In general.--In establishing the Federal standards under
    section 1321(a), the Secretary, in consultation with the
    National Association of Insurance Commissioners (the ``NAIC''),
    shall include provisions that enable States to establish and
    maintain a program under which--
    (A) <> health
    insurance issuers, and third party administrators on
    behalf of group health plans, are required to make
    payments to an applicable reinsurance entity for any
    plan year beginning in the 3-year period beginning
    January 1, 2014 (as specified in paragraph (3); and
    (B) the applicable reinsurance entity collects
    payments under subparagraph (A) and uses amounts so
    collected to make reinsurance payments to health
    insurance issuers described in subparagraph (A) that
    cover high risk individuals in the individual market
    (excluding grandfathered health plans) for any plan year
    beginning in such 3-year period.
    (2) High-risk individual; payment amounts.--The Secretary
    shall include the following in the provisions under paragraph
    (1):
    (A) Determination of high-risk individuals.--The
    method by which individuals will be identified as high
    risk individuals for purposes of the reinsurance program
    established under this section. Such method shall
    provide for identification of individuals as high-risk
    individuals on the basis of--
    (i) a list of at least 50 but not more than
    100 medical conditions that are identified as
    high-risk conditions and that may be based on the
    identification of diagnostic and procedure codes
    that are indicative of individuals with pre-
    existing, high-risk conditions; or
    (ii) any other comparable objective method of
    identification recommended by the American Academy
    of Actuaries.
    (B) Payment amount.--The formula for determining the
    amount of payments that will be paid to health insurance
    issuers described in paragraph (1)(A) that insure high-
    risk individuals. Such formula shall provide for the
    equitable allocation of available funds through
    reconciliation and may be designed--
    (i) to provide a schedule of payments that
    specifies the amount that will be paid for each of
    the conditions identified under subparagraph (A);
    or
    (ii) to use any other comparable method for
    determining payment amounts that is recommended by
    the American Academy of Actuaries and that
    encourages the use of care coordination and care
    management programs for high risk conditions.
    (3) Determination of required contributions.--

    [[Page 210]]

    (A) In general <> .--The Secretary shall include in the
    provisions under paragraph (1) the method for
    determining the amount each health insurance issuer and
    group health plan described in paragraph (1)(A)
    contributing to the reinsurance program under this
    section is required to contribute under such paragraph
    for each plan year beginning in the 36-month period
    beginning January 1, 2014. The contribution amount for
    any plan year may be based on the percentage of revenue
    of each issuer and the total costs of providing benefits
    to enrollees in self-insured plans or on a specified
    amount per enrollee and may be required to be paid in
    advance or periodically throughout the plan year.
    (B) Specific requirements.--The method under this
    paragraph shall be designed so that--
    (i) the contribution amount for each issuer
    proportionally reflects each issuer's fully
    insured commercial book of business for all major
    medical products and the total value of all fees
    charged by the issuer and the costs of coverage
    administered by the issuer as a third party
    administrator;
    (ii) the contribution amount can include an
    additional amount to fund the administrative
    expenses of the applicable reinsurance entity;
    (iii) the aggregate contribution amounts for
    all States shall, based on the best estimates of
    the NAIC and without regard to amounts described
    in clause (ii), equal $10,000,000,000 for plan
    years beginning in 2014, $6,000,000,000 for plan
    years beginning 2015, and $4,000,000,000 for plan
    years beginning in 2016; and
    (iv) in addition to the aggregate contribution
    amounts under clause (iii), each issuer's
    contribution amount for any calendar year under
    clause (iii) reflects its proportionate share of
    an additional $2,000,000,000 for 2014, an
    additional $2,000,000,000 for 2015, and an
    additional $1,000,000,000 for 2016.
    Nothing in this subparagraph shall be construed to
    preclude a State from collecting additional amounts from
    issuers on a voluntary basis.
    (4) Expenditure of funds.--The provisions under paragraph
    (1) shall provide that--
    (A) the contribution amounts collected for any
    calendar year may be allocated and used in any of the
    three calendar years for which amounts are collected
    based on the reinsurance needs of a particular period or
    to reflect experience in a prior period; and
    (B) <> amounts
    remaining unexpended as of December, 2016, may be used
    to make payments under any reinsurance program of a
    State in the individual market in effect in the 2-year
    period beginning on January 1, 2017.
    Notwithstanding the preceding sentence, any contribution amounts
    described in paragraph (3)(B)(iv) shall be deposited into the
    general fund of the Treasury of the United States and may not be
    used for the program established under this section.

    [[Page 211]]

    (c) Applicable Reinsurance Entity.--For purposes of this section--
    (1) In general.-- <> The term
    ``applicable reinsurance entity'' means a not-for-profit
    organization--
    (A) the purpose of which is to help stabilize
    premiums for coverage in the individual and small group
    markets in a State during the first 3 years of operation
    of an Exchange for such markets within the State when
    the risk of adverse selection related to new rating
    rules and market changes is greatest; and
    (B) the duties of which shall be to carry out the
    reinsurance program under this section by coordinating
    the funding and operation of the risk-spreading
    mechanisms designed to implement the reinsurance
    program.
    (2) State discretion.--A State may have more than 1
    applicable reinsurance entity to carry out the reinsurance
    program under this section within the State and 2 or more States
    may enter into agreements to provide for an applicable
    reinsurance entity to carry out such program in all such States.
    (3) Entities are tax-exempt.--An applicable reinsurance
    entity established under this section shall be exempt from
    taxation under chapter 1 of the Internal Revenue Code of 1986.
    The preceding sentence shall not apply to the tax imposed by
    section 511 such Code (relating to tax on unrelated business
    taxable income of an exempt organization).

    (d) Coordination With State High-risk Pools.--The State shall
    eliminate or modify any State high-risk pool to the extent necessary to
    carry out the reinsurance program established under this section. The
    State may coordinate the State high-risk pool with such program to the
    extent not inconsistent with the provisions of this section.

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

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

    [[Page 212]]

    (2) Payments in.--The Secretary shall provide under the
    program established under subsection (a) that if--
    (A) a participating plan's allowable costs for any
    plan year are less than 97 percent but not less than 92
    percent of the target amount, the plan shall pay to the
    Secretary an amount equal to 50 percent of the excess of
    97 percent of the target amount over the allowable
    costs; and
    (B) a participating plan's allowable costs for any
    plan year are less than 92 percent of the target amount,
    the plan shall pay to the Secretary an amount equal to
    the sum of 2.5 percent of the target amount plus 80
    percent of the excess of 92 percent of the target amount
    over the allowable costs.

    (c) Definitions.--In this section:
    (1) Allowable costs.--
    (A) In general.--The amount of allowable costs of a
    plan for any year is an amount equal to the total costs
    (other than administrative costs) of the plan in
    providing benefits covered by the plan.
    (B) Reduction for risk adjustment and reinsurance
    payments.--Allowable costs shall reduced by any risk
    adjustment and reinsurance payments received under
    section 1341 and 1343.
    (2) Target amount.--The target amount of a plan for any year
    is an amount equal to the total premiums (including any premium
    subsidies under any governmental program), reduced by the
    administrative costs of the plan.

    SEC. 1343. <> RISK ADJUSTMENT.

    (a) In General.--
    (1) Low actuarial risk plans.--Using the criteria and
    methods developed under subsection (b), each State shall assess
    a charge on health plans and health insurance issuers (with
    respect to health insurance coverage) described in subsection
    (c) if the actuarial risk of the enrollees of such plans or
    coverage for a year is less than the average actuarial risk of
    all enrollees in all plans or coverage in such State for such
    year that are not self-insured group health plans (which are
    subject to the provisions of the Employee Retirement Income
    Security Act of 1974).
    (2) High actuarial risk plans.--Using the criteria and
    methods developed under subsection (b), each State shall provide
    a payment to health plans and health insurance issuers (with
    respect to health insurance coverage) described in subsection
    (c) if the actuarial risk of the enrollees of such plans or
    coverage for a year is greater than the average actuarial risk
    of all enrollees in all plans and coverage in such State for
    such year that are not self-insured group health plans (which
    are subject to the provisions of the Employee Retirement Income
    Security Act of 1974).

    (b) Criteria and Methods.--The Secretary, in consultation with
    States, shall establish criteria and methods to be used in carrying out
    the risk adjustment activities under this section. The Secretary may
    utilize criteria and methods similar to the criteria and methods
    utilized under part C or D of title XVIII of the Social Security Act.
    Such criteria and methods shall be included

    [[Page 213]]

    in the standards and requirements the Secretary prescribes under section
    1321.
    (c) Scope.--A health plan or a health insurance issuer is described
    in this subsection if such health plan or health insurance issuer
    provides coverage in the individual or small group market within the
    State. This subsection shall not apply to a grandfathered health plan or
    the issuer of a grandfathered health plan with respect to that plan.

    Subtitle E--Affordable Coverage Choices for All Americans

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

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

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

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

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

    ``(a) In General.--In the case of an applicable taxpayer, there
    shall be allowed as a credit against the tax imposed by this subtitle
    for any taxable year an amount equal to the premium assistance credit
    amount of the taxpayer for the taxable year.
    ``(b) Premium Assistance Credit Amount.--For purposes of this
    section--
    ``(1) In general.-- <> The term `premium
    assistance credit amount' means, with respect to any taxable
    year, the sum of the premium assistance amounts determined under
    paragraph (2) with respect to all coverage months of the
    taxpayer occurring during the taxable year.
    ``(2) Premium assistance amount.--The premium assistance
    amount determined under this subsection with respect to any
    coverage month is the amount equal to the lesser of--
    ``(A) the monthly premiums for such month for 1 or
    more qualified health plans offered in the individual
    market within a State which cover the taxpayer, the
    taxpayer's spouse, or any dependent (as defined in
    section 152) of the taxpayer and which were enrolled in
    through an Exchange established by the State under 1311
    of the Patient Protection and Affordable Care Act, or
    ``(B) the excess (if any) of--
    ``(i) the adjusted monthly premium for such
    month for the applicable second lowest cost silver
    plan with respect to the taxpayer, over

    [[Page 214]]

    ``(ii) an amount equal to 1/12 of the product
    of the applicable percentage and the taxpayer's
    household income for the taxable year.
    ``(3) Other terms and rules relating to premium assistance
    amounts.--For purposes of paragraph (2)--
    ``(A) Applicable percentage.--
    ``(i) In general.--Except as provided in
    clause (ii), the applicable percentage with
    respect to any taxpayer for any taxable year is
    equal to 2.8 percent, increased by the number of
    percentage points (not greater than 7) which bears
    the same ratio to 7 percentage points as--
    ``(I) the taxpayer's household
    income for the taxable year in excess of
    100 percent of the poverty line for a
    family of the size involved, bears to
    ``(II) an amount equal to 200
    percent of the poverty line for a family
    of the size involved.
    ``(ii) Special rule for taxpayers under 133
    percent of poverty line.--If a taxpayer's
    household income for the taxable year is in excess
    of 100 percent, but not more than 133 percent, of
    the poverty line for a family of the size
    involved, the taxpayer's applicable percentage
    shall be 2 percent.
    ``(iii) Indexing.--In the case of taxable
    years beginning in any calendar year after 2014,
    the Secretary shall adjust the initial and final
    applicable percentages under clause (i), and the 2
    percent under clause (ii), for the calendar year
    to reflect the excess of the rate of premium
    growth between the preceding calendar year and
    2013 over the rate of income growth for such
    period.
    ``(B) Applicable second lowest cost silver plan.--
    The applicable second lowest cost silver plan with
    respect to any applicable taxpayer is the second lowest
    cost silver plan of the individual market in the rating
    area in which the taxpayer resides which--
    ``(i) is offered through the same Exchange
    through which the qualified health plans taken
    into account under paragraph (2)(A) were offered,
    and
    ``(ii) provides--
    ``(I) self-only coverage in the case
    of an applicable taxpayer--
    ``(aa) whose tax for the
    taxable year is determined under
    section 1(c) (relating to
    unmarried individuals other than
    surviving spouses and heads of
    households) and who is not
    allowed a deduction under
    section 151 for the taxable year
    with respect to a dependent, or
    ``(bb) who is not described
    in item (aa) but who purchases
    only self-only coverage, and
    ``(II) family coverage in the case
    of any other applicable taxpayer.
    If a taxpayer files a joint return and no credit is
    allowed under this section with respect to 1 of the
    spouses by reason of subsection (e), the taxpayer shall
    be treated as described in clause (ii)(I) unless a
    deduction is allowed

    [[Page 215]]

    under section 151 for the taxable year with respect to a
    dependent other than either spouse and subsection (e)
    does not apply to the dependent.
    ``(C) Adjusted monthly premium.--The adjusted
    monthly premium for an applicable second lowest cost
    silver plan is the monthly premium which would have been
    charged (for the rating area with respect to which the
    premiums under paragraph (2)(A) were determined) for the
    plan if each individual covered under a qualified health
    plan taken into account under paragraph (2)(A) were
    covered by such silver plan and the premium was adjusted
    only for the age of each such individual in the manner
    allowed under section 2701 of the Public Health Service
    Act. In the case of a State participating in the
    wellness discount demonstration project under section
    2705(d) of the Public Health Service Act, the adjusted
    monthly premium shall be determined without regard to
    any premium discount or rebate under such project.
    ``(D) Additional benefits.--If--
    ``(i) a qualified health plan under section
    1302(b)(5) of the Patient Protection and
    Affordable Care Act offers benefits in addition to
    the essential health benefits required to be
    provided by the plan, or
    ``(ii) a State requires a qualified health
    plan under section 1311(d)(3)(B) of such Act to
    cover benefits in addition to the essential health
    benefits required to be provided by the plan,
    the portion of the premium for the plan properly
    allocable (under rules prescribed by the Secretary of
    Health and Human Services) to such additional benefits
    shall not be taken into account in determining either
    the monthly premium or the adjusted monthly premium
    under paragraph (2).
    ``(E) Special rule for pediatric dental coverage.--
    For purposes of determining the amount of any monthly
    premium, if an individual enrolls in both a qualified
    health plan and a plan described in section
    1311(d)(2)(B)(ii)(I) of the Patient Protection and
    Affordable Care Act for any plan year, the portion of
    the premium for the plan described in such section that
    (under regulations prescribed by the Secretary) is
    properly allocable to pediatric dental benefits which
    are included in the essential health benefits required
    to be provided by a qualified health plan under section
    1302(b)(1)(J) of such Act shall be treated as a premium
    payable for a qualified health plan.

    ``(c) Definition and Rules Relating to Applicable Taxpayers,
    Coverage Months, and Qualified Health Plan.--For purposes of this
    section--
    ``(1) Applicable taxpayer.--
    ``(A) In general.--The term `applicable taxpayer'
    means, with respect to any taxable year, a taxpayer
    whose household income for the taxable year exceeds 100
    percent but does not exceed 400 percent of an amount
    equal to the poverty line for a family of the size
    involved.
    ``(B) Special rule for certain individuals lawfully
    present in the united states.--If--

    [[Page 216]]

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

    [[Page 217]]

    respect to the plan exceeds 9.8 percent
    of the applicable taxpayer's household
    income.
    <> This clause shall also
    apply to an individual who is eligible to enroll
    in the plan by reason of a relationship the
    individual bears to the employee.
    ``(ii) Coverage must provide minimum value.--
    Except as provided in clause (iii), an employee
    shall not be treated as eligible for minimum
    essential coverage if such coverage consists of an
    eligible employer-sponsored plan (as defined in
    section 5000A(f)(2)) and the plan's share of the
    total allowed costs of benefits provided under the
    plan is less than 60 percent of such costs.
    ``(iii) Employee or family must not be covered
    under employer plan.--Clauses (i) and (ii) shall
    not apply if the employee (or any individual
    described in the last sentence of clause (i)) is
    covered under the eligible employer-sponsored plan
    or the grandfathered health plan.
    ``(iv) Indexing.--In the case of plan years
    beginning in any calendar year after 2014, the
    Secretary shall adjust the 9.8 percent under
    clause (i)(II) in the same manner as the
    percentages are adjusted under subsection
    (b)(3)(A)(ii).
    ``(3) Definitions and other rules.--
    ``(A) Qualified health plan.--The term `qualified
    health plan' has the meaning given such term by section
    1301(a) of the Patient Protection and Affordable Care
    Act, except that such term shall not include a qualified
    health plan which is a catastrophic plan described in
    section 1302(e) of such Act.
    ``(B) Grandfathered health plan.--The term
    `grandfathered health plan' has the meaning given such
    term by section 1251 of the Patient Protection and
    Affordable Care Act.

    ``(d) Terms Relating to Income and Families.--For purposes of this
    section--
    ``(1) Family size.--The family size involved with respect to
    any taxpayer shall be equal to the number of individuals for
    whom the taxpayer is allowed a deduction under section 151
    (relating to allowance of deduction for personal exemptions) for
    the taxable year.
    ``(2) Household income.--
    ``(A) Household income.--The term `household income'
    means, with respect to any taxpayer, an amount equal to
    the sum of--
    ``(i) the modified gross income of the
    taxpayer, plus
    ``(ii) the aggregate modified gross incomes of
    all other individuals who--
    ``(I) were taken into account in
    determining the taxpayer's family size
    under paragraph (1), and
    ``(II) were required to file a
    return of tax imposed by section 1 for
    the taxable year.
    ``(B) Modified gross income.--The term `modified
    gross income' means gross income--

    [[Page 218]]

    ``(i) decreased by the amount of any deduction
    allowable under paragraph (1), (3), (4), or (10)
    of section 62(a),
    ``(ii) increased by the amount of interest
    received or accrued during the taxable year which
    is exempt from tax imposed by this chapter, and
    ``(iii) determined without regard to sections
    911, 931, and 933.
    ``(3) Poverty line.--
    ``(A) In general.--The term `poverty line' has the
    meaning given that term in section 2110(c)(5) of the
    Social Security Act (42 U.S.C. 1397jj(c)(5)).
    ``(B) Poverty line used.--In the case of any
    qualified health plan offered through an Exchange for
    coverage during a taxable year beginning in a calendar
    year, the poverty line used shall be the most recently
    published poverty line as of the 1st day of the regular
    enrollment period for coverage during such calendar
    year.

    ``(e) Rules for Individuals Not Lawfully Present.--
    ``(1) In general.--If 1 or more individuals for whom a
    taxpayer is allowed a deduction under section 151 (relating to
    allowance of deduction for personal exemptions) for the taxable
    year (including the taxpayer or his spouse) are individuals who
    are not lawfully present--
    ``(A) the aggregate amount of premiums otherwise
    taken into account under clauses (i) and (ii) of
    subsection (b)(2)(A) shall be reduced by the portion (if
    any) of such premiums which is attributable to such
    individuals, and
    ``(B) for purposes of applying this section, the
    determination as to what percentage a taxpayer's
    household income bears to the poverty level for a family
    of the size involved shall be made under one of the
    following methods:
    ``(i) A method under which--
    ``(I) the taxpayer's family size is
    determined by not taking such
    individuals into account, and
    ``(II) the taxpayer's household
    income is equal to the product of the
    taxpayer's household income (determined
    without regard to this subsection) and a
    fraction--
    ``(aa) the numerator of
    which is the poverty line for
    the taxpayer's family size
    determined after application of
    subclause (I), and
    ``(bb) the denominator of
    which is the poverty line for
    the taxpayer's family size
    determined without regard to
    subclause (I).
    ``(ii) A comparable method reaching the same
    result as the method under clause (i).
    ``(2) Lawfully present.--For purposes of this section, an
    individual shall be treated as lawfully present only if the
    individual is, and is reasonably expected to be for the entire
    period of enrollment for which the credit under this section is
    being claimed, a citizen or national of the United States or an
    alien lawfully present in the United States.
    ``(3) Secretarial authority.-- <> The
    Secretary of Health and Human Services, in consultation with the
    Secretary, shall prescribe rules setting forth the methods by
    which calculations of family size and household income are made
    for purposes

    [[Page 219]]

    of this subsection. Such rules shall be designed to ensure that
    the least burden is placed on individuals enrolling in qualified
    health plans through an Exchange and taxpayers eligible for the
    credit allowable under this section.

    ``(f) Reconciliation of Credit and Advance Credit.--
    ``(1) In general.--The amount of the credit allowed under
    this section for any taxable year shall be reduced (but not
    below zero) by the amount of any advance payment of such credit
    under section 1412 of the Patient Protection and Affordable Care
    Act.
    ``(2) Excess advance payments.--
    ``(A) In general.--If the advance payments to a
    taxpayer under section 1412 of the Patient Protection
    and Affordable Care Act for a taxable year exceed the
    credit allowed by this section (determined without
    regard to paragraph (1)), the tax imposed by this
    chapter for the taxable year shall be increased by the
    amount of such excess.
    ``(B) Limitation on increase where income less than
    400 percent of poverty line.--
    ``(i) In general.--In the case of an
    applicable taxpayer whose household income is less
    than 400 percent of the poverty line for the size
    of the family involved for the taxable year, the
    amount of the increase under subparagraph (A)
    shall in no event exceed $400 ($250 in the case of
    a taxpayer whose tax is determined under section
    1(c) for the taxable year).
    ``(ii) Indexing of amount.--In the case of any
    calendar year beginning after 2014, each of the
    dollar amounts under clause (i) shall be increased
    by an amount equal to--
    ``(I) such dollar amount, multiplied
    by
    ``(II) the cost-of-living adjustment
    determined under section 1(f)(3) for the
    calendar year, determined by
    substituting `calendar year 2013' for
    `calendar year 1992' in subparagraph (B)
    thereof.
    If the amount of any increase under clause (i) is
    not a multiple of $50, such increase shall be
    rounded to the next lowest multiple of $50.

    ``(g) Regulations.--The Secretary shall prescribe such regulations
    as may be necessary to carry out the provisions of this section,
    including regulations which provide for--
    ``(1) the coordination of the credit allowed under this
    section with the program for advance payment of the credit under
    section 1412 of the Patient Protection and Affordable Care Act,
    and
    ``(2) the application of subsection (f) where the filing
    status of the taxpayer for a taxable year is different from such
    status used for determining the advance payment of the
    credit.''.

    (b) Disallowance of Deduction.--Section 280C of the Internal Revenue
    Code of 1986 <>  is amended by adding at the end the
    following new subsection:

    ``(g) Credit for Health Insurance Premiums.--No deduction shall be
    allowed for the portion of the premiums paid by the taxpayer for
    coverage of 1 or more individuals under a qualified health plan which is
    equal to the amount of the credit determined for the taxable year under
    section 36B(a) with respect to such premiums.''.

    [[Page 220]]

    (c) Study on Affordable Coverage.--
    (1) Study and report.--
    (A) In general.--Not later than 5 years after the
    date of the enactment of this Act, the Comptroller
    General shall conduct a study on the affordability of
    health insurance coverage, including--
    (i) the impact of the tax credit for qualified
    health insurance coverage of individuals under
    section 36B of the Internal Revenue Code of 1986
    and the tax credit for employee health insurance
    expenses of small employers under section 45R of
    such Code on maintaining and expanding the health
    insurance coverage of individuals;
    (ii) the availability of affordable health
    benefits plans, including a study of whether the
    percentage of household income used for purposes
    of section 36B(c)(2)(C) of the Internal Revenue
    Code of 1986 (as added by this section) is the
    appropriate level for determining whether
    employer-provided coverage is affordable for an
    employee and whether such level may be lowered
    without significantly increasing the costs to the
    Federal Government and reducing employer-provided
    coverage; and
    (iii) the ability of individuals to maintain
    essential health benefits coverage (as defined in
    section 5000A(f) of the Internal Revenue Code of
    1986).
    (B) Report.--The Comptroller General shall submit to
    the appropriate committees of Congress a report on the
    study conducted under subparagraph (A), together with
    legislative recommendations relating to the matters
    studied under such subparagraph.
    (2) Appropriate committees of congress.--In this subsection,
    the term ``appropriate committees of Congress'' means the
    Committee on Ways and Means, the Committee on Education and
    Labor, and the Committee on Energy and Commerce of the House of
    Representatives and the Committee on Finance and the Committee
    on Health, Education, Labor and Pensions of the Senate.

    (d) Conforming Amendments.--
    (1) Paragraph (2) of section 1324(b) of title 31, United
    States Code, is amended by inserting ``36B,'' after ``36A,''.
    (2) The table of sections for subpart C of part IV of
    subchapter A of chapter 1 of the Internal Revenue Code of 1986
    is amended by inserting after the item relating to section 36A
    the following new item:

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

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

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

    (a) In General.--In the case of an eligible insured enrolled in a
    qualified health plan--
    (1) <>  the Secretary shall notify the
    issuer of the plan of such eligibility; and
    (2) the issuer shall reduce the cost-sharing under the plan
    at the level and in the manner specified in subsection (c).

    [[Page 221]]

    (b) Eligible Insured.--In this section, the term ``eligible
    insured'' means an individual--
    (1) who enrolls in a qualified health plan in the silver
    level of coverage in the individual market offered through an
    Exchange; and
    (2) whose household income exceeds 100 percent but does not
    exceed 400 percent of the poverty line for a family of the size
    involved.

    In the case of an individual described in section 36B(c)(1)(B) of the
    Internal Revenue Code of 1986, the individual shall be treated as having
    household income equal to 100 percent for purposes of applying this
    section.
    (c) Determination of Reduction in Cost-sharing.--
    (1) Reduction in out-of-pocket limit.--
    (A) In general.--The reduction in cost-sharing under
    this subsection shall first be achieved by reducing the
    applicable out-of pocket limit under section 1302(c)(1)
    in the case of--
    (i) an eligible insured whose household income
    is more than 100 percent but not more than 200
    percent of the poverty line for a family of the
    size involved, by two-thirds;
    (ii) an eligible insured whose household
    income is more than 200 percent but not more than
    300 percent of the poverty line for a family of
    the size involved, by one-half; and
    (iii) an eligible insured whose household
    income is more than 300 percent but not more than
    400 percent of the poverty line for a family of
    the size involved, by one-third.
    (B) Coordination with actuarial value limits.--
    (i) In general.--The Secretary shall ensure
    the reduction under this paragraph shall not
    result in an increase in the plan's share of the
    total allowed costs of benefits provided under the
    plan above--
    (I) 90 percent in the case of an
    eligible insured described in paragraph
    (2)(A);
    (II) 80 percent in the case of an
    eligible insured described in paragraph
    (2)(B); and
    (III) 70 percent in the case of an
    eligible insured described in clause
    (ii) or (iii) of subparagraph (A).
    (ii) Adjustment.--The Secretary shall adjust
    the out-of pocket limits under paragraph (1) if
    necessary to ensure that such limits do not cause
    the respective actuarial values to exceed the
    levels specified in clause (i).
    (2) Additional reduction for lower income insureds.--
    The <> Secretary shall establish procedures
    under which the issuer of a qualified health plan to which this
    section applies shall further reduce cost-sharing under the plan
    in a manner sufficient to--
    (A) in the case of an eligible insured whose
    household income is not less than 100 percent but not
    more than 150 percent of the poverty line for a family
    of the size involved, increase the plan's share of the
    total allowed

    [[Page 222]]

    costs of benefits provided under the plan to 90 percent
    of such costs; and
    (B) in the case of an eligible insured whose
    household income is more than 150 percent but not more
    than 200 percent of the poverty line for a family of the
    size involved, increase the plan's share of the total
    allowed costs of benefits provided under the plan to 80
    percent of such costs.
    (3) Methods for reducing cost-sharing.--
    (A) <>  In general.--An issuer
    of a qualified health plan making reductions under this
    subsection shall notify the Secretary of such reductions
    and the Secretary shall make periodic and timely
    payments to the issuer equal to the value of the
    reductions.
    (B) Capitated payments.--The Secretary may establish
    a capitated payment system to carry out the payment of
    cost-sharing reductions under this section. Any such
    system shall take into account the value of the
    reductions and make appropriate risk adjustments to such
    payments.
    (4) Additional benefits.--If a qualified health plan under
    section 1302(b)(5) offers benefits in addition to the essential
    health benefits required to be provided by the plan, or a State
    requires a qualified health plan under section 1311(d)(3)(B) to
    cover benefits in addition to the essential health benefits
    required to be provided by the plan, the reductions in cost-
    sharing under this section shall not apply to such additional
    benefits.
    (5) Special rule for pediatric dental plans.--If an
    individual enrolls in both a qualified health plan and a plan
    described in section 1311(d)(2)(B)(ii)(I) for any plan year,
    subsection (a) shall not apply to that portion of any reduction
    in cost-sharing under subsection (c) that (under regulations
    prescribed by the Secretary) is properly allocable to pediatric
    dental benefits which are included in the essential health
    benefits required to be provided by a qualified health plan
    under section 1302(b)(1)(J).

    (d) Special Rules for Indians.--
    (1) Indians under 300 percent of poverty.--If an individual
    enrolled in any qualified health plan in the individual market
    through an Exchange is an Indian (as defined in section 4(d) of
    the Indian Self-Determination and Education Assistance Act (25
    U.S.C. 450b(d))) whose household income is not more than 300
    percent of the poverty line for a family of the size involved,
    then, for purposes of this section--
    (A) such individual shall be treated as an eligible
    insured; and
    (B) the issuer of the plan shall eliminate any cost-
    sharing under the plan.
    (2) Items or services furnished through indian health
    providers.--If an Indian (as so defined) enrolled in a qualified
    health plan is furnished an item or service directly by the
    Indian Health Service, an Indian Tribe, Tribal Organization, or
    Urban Indian Organization or through referral under contract
    health services--
    (A) no cost-sharing under the plan shall be imposed
    under the plan for such item or service; and
    (B) the issuer of the plan shall not reduce the
    payment to any such entity for such item or service by
    the amount

    [[Page 223]]

    of any cost-sharing that would be due from the Indian
    but for subparagraph (A).
    (3) Payment.--The Secretary shall pay to the issuer of a
    qualified health plan the amount necessary to reflect the
    increase in actuarial value of the plan required by reason of
    this subsection.

    (e) Rules for Individuals Not Lawfully Present.--
    (1) In general.--If an individual who is an eligible insured
    is not lawfully present--
    (A) no cost-sharing reduction under this section
    shall apply with respect to the individual; and
    (B) for purposes of applying this section, the
    determination as to what percentage a taxpayer's
    household income bears to the poverty level for a family
    of the size involved shall be made under one of the
    following methods:
    (i) A method under which--
    (I) the taxpayer's family size is
    determined by not taking such
    individuals into account, and
    (II) the taxpayer's household income
    is equal to the product of the
    taxpayer's household income (determined
    without regard to this subsection) and a
    fraction--
    (aa) the numerator of which
    is the poverty line for the
    taxpayer's family size
    determined after application of
    subclause (I), and
    (bb) the denominator of
    which is the poverty line for
    the taxpayer's family size
    determined without regard to
    subclause (I).
    (ii) A comparable method reaching the same
    result as the method under clause (i).
    (2) Lawfully present.--For purposes of this section, an
    individual shall be treated as lawfully present only if the
    individual is, and is reasonably expected to be for the entire
    period of enrollment for which the cost-sharing reduction under
    this section is being claimed, a citizen or national of the
    United States or an alien lawfully present in the United States.
    (3) <>  Secretarial authority.--The
    Secretary, in consultation with the Secretary of the Treasury,
    shall prescribe rules setting forth the methods by which
    calculations of family size and household income are made for
    purposes of this subsection. Such rules shall be designed to
    ensure that the least burden is placed on individuals enrolling
    in qualified health plans through an Exchange and taxpayers
    eligible for the credit allowable under this section.

    (f) Definitions and Special Rules.--In this section:
    (1) In general.--Any term used in this section which is also
    used in section 36B of the Internal Revenue Code of 1986 shall
    have the meaning given such term by such section.
    (2) Limitations on reduction.--No cost-sharing reduction
    shall be allowed under this section with respect to coverage for
    any month unless the month is a coverage month with respect to
    which a credit is allowed to the insured (or an applicable
    taxpayer on behalf of the insured) under section 36B of such
    Code.
    (3) Data used for eligibility.--Any determination under this
    section shall be made on the basis of the taxable year for which
    the advance determination is made under section

    [[Page 224]]

    1412 and not the taxable year for which the credit under section
    36B of such Code is allowed.

    Subpart B--Eligibility Determinations

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

    (a) Establishment of Program.--The Secretary shall establish a
    program meeting the requirements of this section for determining--
    (1) whether an individual who is to be covered in the
    individual market by a qualified health plan offered through an
    Exchange, or who is claiming a premium tax credit or reduced
    cost-sharing, meets the requirements of sections 1312(f)(3),
    1402(e), and 1412(d) of this title and section 36B(e) of the
    Internal Revenue Code of 1986 that the individual be a citizen
    or national of the United States or an alien lawfully present in
    the United States;
    (2) in the case of an individual claiming a premium tax
    credit or reduced cost-sharing under section 36B of such Code or
    section 1402--
    (A) whether the individual meets the income and
    coverage requirements of such sections; and
    (B) the amount of the tax credit or reduced cost-
    sharing;
    (3) whether an individual's coverage under an employer-
    sponsored health benefits plan is treated as unaffordable under
    sections 36B(c)(2)(C) and 5000A(e)(2); and
    (4) whether to grant a certification under section
    1311(d)(4)(H) attesting that, for purposes of the individual
    responsibility requirement under section 5000A of the Internal
    Revenue Code of 1986, an individual is entitled to an exemption
    from either the individual responsibility requirement or the
    penalty imposed by such section.

    (b) Information Required To Be Provided by Applicants.--
    (1) In general.--An applicant for enrollment in a qualified
    health plan offered through an Exchange in the individual market
    shall provide--
    (A) the name, address, and date of birth of each
    individual who is to be covered by the plan (in this
    subsection referred to as an ``enrollee''); and
    (B) the information required by any of the following
    paragraphs that is applicable to an enrollee.
    (2) Citizenship or immigration status.--The following
    information shall be provided with respect to every enrollee:
    (A) In the case of an enrollee whose eligibility is
    based on an attestation of citizenship of the enrollee,
    the enrollee's social security number.
    (B) In the case of an individual whose eligibility
    is based on an attestation of the enrollee's immigration
    status, the enrollee's social security number (if
    applicable) and such identifying information with
    respect to the enrollee's immigration status as the
    Secretary, after consultation with the Secretary of
    Homeland Security, determines appropriate.

    [[Page 225]]

    (3) Eligibility and amount of tax credit or reduced cost-
    sharing.--In the case of an enrollee with respect to whom a
    premium tax credit or reduced cost-sharing under section 36B of
    such Code or section 1402 is being claimed, the following
    information:
    (A) Information regarding income and family size.--
    The information described in section 6103(l)(21) for the
    taxable year ending with or within the second calendar
    year preceding the calendar year in which the plan year
    begins.
    (B) Changes in circumstances.--The information
    described in section 1412(b)(2), including information
    with respect to individuals who were not required to
    file an income tax return for the taxable year described
    in subparagraph (A) or individuals who experienced
    changes in marital status or family size or significant
    reductions in income.
    (4) Employer-sponsored coverage.--In the case of an enrollee
    with respect to whom eligibility for a premium tax credit under
    section 36B of such Code or cost-sharing reduction under section
    1402 is being established on the basis that the enrollee's (or
    related individual's) employer is not treated under section
    36B(c)(2)(C) of such Code as providing minimum essential
    coverage or affordable minimum essential coverage, the following
    information:
    (A) The name, address, and employer identification
    number (if available) of the employer.
    (B) Whether the enrollee or individual is a full-
    time employee and whether the employer provides such
    minimum essential coverage.
    (C) If the employer provides such minimum essential
    coverage, the lowest cost option for the enrollee's or
    individual's enrollment status and the enrollee's or
    individual's required contribution (within the meaning
    of section 5000A(e)(1)(B) of such Code) under the
    employer-sponsored plan.
    (D) If an enrollee claims an employer's minimum
    essential coverage is unaffordable, the information
    described in paragraph (3).
    If an enrollee changes employment or obtains additional
    employment while enrolled in a qualified health plan for which
    such credit or reduction is allowed, the enrollee shall notify
    the Exchange of such change or additional employment and provide
    the information described in this paragraph with respect to the
    new employer.
    (5) Exemptions from individual responsibility
    requirements.--In the case of an individual who is seeking an
    exemption certificate under section 1311(d)(4)(H) from any
    requirement or penalty imposed by section 5000A, the following
    information:
    (A) In the case of an individual seeking exemption
    based on the individual's status as a member of an
    exempt religious sect or division, as a member of a
    health care sharing ministry, as an Indian, or as an
    individual eligible for a hardship exemption, such
    information as the Secretary shall prescribe.

    [[Page 226]]

    (B) In the case of an individual seeking exemption
    based on the lack of affordable coverage or the
    individual's status as a taxpayer with household income
    less than 100 percent of the poverty line, the
    information described in paragraphs (3) and (4), as
    applicable.

    (c) Verification of Information Contained in Records of Specific
    Federal Officials.--
    (1) Information transferred to secretary.--An Exchange shall
    submit the information provided by an applicant under subsection
    (b) to the Secretary for verification in accordance with the
    requirements of this subsection and subsection (d).
    (2) Citizenship or immigration status.--
    (A) Commissioner of social security.--The Secretary
    shall submit to the Commissioner of Social Security the
    following information for a determination as to whether
    the information provided is consistent with the
    information in the records of the Commissioner:
    (i) The name, date of birth, and social
    security number of each individual for whom such
    information was provided under subsection (b)(2).
    (ii) The attestation of an individual that the
    individual is a citizen.
    (B) Secretary of homeland security.--
    (i) <>  In general.--In the
    case of an individual--
    (I) who attests that the individual
    is an alien lawfully present in the
    United States; or
    (II) who attests that the individual
    is a citizen but with respect to whom
    the Commissioner of Social Security has
    notified the Secretary under subsection
    (e)(3) that the attestation is
    inconsistent with information in the
    records maintained by the Commissioner;
    the Secretary shall submit to the Secretary of
    Homeland Security the information described in
    clause (ii) for a determination as to whether the
    information provided is consistent with the
    information in the records of the Secretary of
    Homeland Security.
    (ii) Information.--The information described
    in clause (ii) is the following:
    (I) The name, date of birth, and any
    identifying information with respect to
    the individual's immigration status
    provided under subsection (b)(2).
    (II) The attestation that the
    individual is an alien lawfully present
    in the United States or in the case of
    an individual described in clause
    (i)(II), the attestation that the
    individual is a citizen.
    (3) Eligibility for tax credit and cost-sharing reduction.--
    The Secretary shall submit the information described in
    subsection (b)(3)(A) provided under paragraph (3), (4), or (5)
    of subsection (b) to the Secretary of the Treasury for
    verification of household income and family size for purposes of
    eligibility.
    (4) Methods.--
    (A) <>  In general.--
    The Secretary, in consultation with the Secretary of the
    Treasury, the Secretary of Homeland

    [[Page 227]]

    Security, and the Commissioner of Social Security, shall
    provide that verifications and determinations under this
    subsection shall be done--
    (i) through use of an on-line system or
    otherwise for the electronic submission of, and
    response to, the information submitted under this
    subsection with respect to an applicant; or
    (ii) by determining the consistency of the
    information submitted with the information
    maintained in the records of the Secretary of the
    Treasury, the Secretary of Homeland Security, or
    the Commissioner of Social Security through such
    other method as is approved by the Secretary.
    (B) Flexibility.--The Secretary may modify the
    methods used under the program established by this
    section for the Exchange and verification of information
    if the Secretary determines such modifications would
    reduce the administrative costs and burdens on the
    applicant, including allowing an applicant to request
    the Secretary of the Treasury to provide the information
    described in paragraph (3) directly to the Exchange or
    to the Secretary. The Secretary shall not make any such
    modification unless the Secretary determines that any
    applicable requirements under this section and section
    6103 of the Internal Revenue Code of 1986 with respect
    to the confidentiality, disclosure, maintenance, or use
    of information will be met.

    (d) Verification by Secretary.--In the case of information provided
    under subsection (b) that is not required under subsection (c) to be
    submitted to another person for verification, the Secretary shall verify
    the accuracy of such information in such manner as the Secretary
    determines appropriate, including delegating responsibility for
    verification to the Exchange.
    (e) Actions Relating to Verification.--
    (1) In general.--Each person to whom the Secretary provided
    information under subsection (c) shall report to the Secretary
    under the method established under subsection (c)(4) the results
    of its verification and the Secretary shall notify the Exchange
    of such results. <> Each person to whom the
    Secretary provided information under subsection (d) shall report
    to the Secretary in such manner as the Secretary determines
    appropriate.
    (2) Verification.--
    (A) Eligibility for enrollment and premium tax
    credits and cost-sharing reductions.--If information
    provided by an applicant under paragraphs (1), (2), (3),
    and (4) of subsection (b) is verified under subsections
    (c) and (d)--
    (i) the individual's eligibility to enroll
    through the Exchange and to apply for premium tax
    credits and cost-sharing reductions shall be
    satisfied; and
    (ii) <>  the Secretary
    shall, if applicable, notify the Secretary of the
    Treasury under section 1412(c) of the amount of
    any advance payment to be made.
    (B) Exemption from individual responsibility.--If
    information provided by an applicant under subsection
    (b)(5) is verified under subsections (c) and (d), the
    Secretary

    [[Page 228]]

    shall issue the certification of exemption described in
    section 1311(d)(4)(H).
    (3) Inconsistencies involving attestation of citizenship or
    lawful presence.--If the information provided by any applicant
    under subsection (b)(2) is inconsistent with information in the
    records maintained by the Commissioner of Social Security or
    Secretary of Homeland Security, whichever is applicable, the
    applicant's eligibility will be determined in the same manner as
    an individual's eligibility under the medicaid program is
    determined under section 1902(ee) of the Social Security Act (as
    in effect on January 1, 2010).
    (4) <>  Inconsistencies involving
    other information.--
    (A) In general.--If the information provided by an
    applicant under subsection (b) (other than subsection
    (b)(2)) is inconsistent with information in the records
    maintained by persons under subsection (c) or is not
    verified under subsection (d), the Secretary shall
    notify the Exchange and the Exchange shall take the
    following actions:
    (i) Reasonable effort.--The Exchange shall
    make a reasonable effort to identify and address
    the causes of such inconsistency, including
    through typographical or other clerical errors, by
    contacting the applicant to confirm the accuracy
    of the information, and by taking such additional
    actions as the Secretary, through regulation or
    other guidance, may identify.
    (ii) Notice and opportunity to correct.--In
    the case the inconsistency or inability to verify
    is not resolved under subparagraph (A), the
    Exchange shall--
    (I) notify the applicant of such
    fact;
    (II) <>  provide
    the applicant an opportunity to either
    present satisfactory documentary
    evidence or resolve the inconsistency
    with the person verifying the
    information under subsection (c) or (d)
    during the 90-day period beginning the
    date on which the notice required under
    subclause (I) is sent to the applicant.
    The Secretary may extend the 90-day period under
    subclause (II) for enrollments occurring during
    2014.
    (B) Specific actions not involving citizenship or
    lawful presence.--
    (i) In general.--Except as provided in
    paragraph (3), the Exchange shall, during any
    period before the close of the period under
    subparagraph (A)(ii)(II), make any determination
    under paragraphs (2), (3), and (4) of subsection
    (a) on the basis of the information contained on
    the application.
    (ii) Eligibility or amount of credit or
    reduction.--If an inconsistency involving the
    eligibility for, or amount of, any premium tax
    credit or cost-sharing reduction is unresolved
    under this subsection as of the close of the
    period under subparagraph (A)(ii)(II), the
    Exchange shall notify the applicant of the amount
    (if any) of the credit or reduction that is
    determined on the basis of the records maintained
    by persons under subsection (c).
    (iii) Employer affordability.--If the
    Secretary notifies an Exchange that an enrollee is
    eligible for

    [[Page 229]]

    a premium tax credit under section 36B of such
    Code or cost-sharing reduction under section 1402
    because the enrollee's (or related individual's)
    employer does not provide minimum essential
    coverage through an employer-sponsored plan or
    that the employer does provide that coverage but
    it is not affordable coverage, the Exchange shall
    notify the employer of such fact and that the
    employer may be liable for the payment assessed
    under section 4980H of such Code.
    (iv) Exemption.--In any case where the
    inconsistency involving, or inability to verify,
    information provided under subsection (b)(5) is
    not resolved as of the close of the period under
    subparagraph (A)(ii)(II), the Exchange shall
    notify an applicant that no certification of
    exemption from any requirement or payment under
    section 5000A of such Code will be issued.
    (C) Appeals process.--The Exchange shall also notify
    each person receiving notice under this paragraph of the
    appeals processes established under subsection (f).

    (f) Appeals and Redeterminations.--
    (1) <>  In general.--The Secretary, in
    consultation with the Secretary of the Treasury, the Secretary
    of Homeland Security, and the Commissioner of Social Security,
    shall establish procedures by which the Secretary or one of such
    other Federal officers--
    (A) hears and makes decisions with respect to
    appeals of any determination under subsection (e); and
    (B) redetermines eligibility on a periodic basis in
    appropriate circumstances.
    (2) Employer liability.--
    (A) In general.--The Secretary shall establish a
    separate appeals process for employers who are notified
    under subsection (e)(4)(C) that the employer may be
    liable for a tax imposed by section 4980H of the
    Internal Revenue Code of 1986 with respect to an
    employee because of a determination that the employer
    does not provide minimum essential coverage through an
    employer-sponsored plan or that the employer does
    provide that coverage but it is not affordable coverage
    with respect to an employee. Such process shall provide
    an employer the opportunity to--
    (i) present information to the Exchange for
    review of the determination either by the Exchange
    or the person making the determination, including
    evidence of the employer-sponsored plan and
    employer contributions to the plan; and
    (ii) have access to the data used to make the
    determination to the extent allowable by law.
    Such process shall be in addition to any rights of
    appeal the employer may have under subtitle F of such
    Code.
    (B) Confidentiality.--Notwithstanding any provision
    of this title (or the amendments made by this title) or
    section 6103 of the Internal Revenue Code of 1986, an
    employer shall not be entitled to any taxpayer return
    information with respect to an employee for purposes of
    determining whether the employer is subject to the
    penalty under section 4980H of such Code with respect to
    the employee, except that--

    [[Page 230]]

    (i) the employer may be notified as to the
    name of an employee and whether or not the
    employee's income is above or below the threshold
    by which the affordability of an employer's health
    insurance coverage is measured; and
    (ii) this subparagraph shall not apply to an
    employee who provides a waiver (at such time and
    in such manner as the Secretary may prescribe)
    authorizing an employer to have access to the
    employee's taxpayer return information.

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

    (h) Penalties.--
    (1) False or fraudulent information.--
    (A) Civil penalty.--
    (i) In general.--If--
    (I) any person fails to provides
    correct information under subsection
    (b); and
    (II) such failure is attributable to
    negligence or disregard of any rules or
    regulations of the Secretary,
    such person shall be subject, in addition to any
    other penalties that may be prescribed by law, to
    a civil penalty of not more than $25,000 with
    respect to any failures involving an application
    for a plan year. For purposes of this
    subparagraph, the terms ``negligence'' and
    ``disregard'' shall have the same meanings as when
    used in section 6662 of the Internal Revenue Code
    of 1986.
    (ii) Reasonable cause exception.--No penalty
    shall be imposed under clause (i) if the Secretary
    determines that there was a reasonable cause for
    the failure and that the person acted in good
    faith.
    (B) Knowing and willful violations.--Any person who
    knowingly and willfully provides false or fraudulent
    information under subsection (b) shall be subject, in
    addition to any other penalties that may be prescribed
    by law, to a civil penalty of not more than $250,000.

    [[Page 231]]

    (2) Improper use or disclosure of information.--Any person
    who knowingly and willfully uses or discloses information in
    violation of subsection (g) shall be subject, in addition to any
    other penalties that may be prescribed by law, to a civil
    penalty of not more than $25,000.
    (3) Limitations on liens and levies.--The Secretary (or, if
    applicable, the Attorney General of the United States) shall
    not--
    (A) file notice of lien with respect to any property
    of a person by reason of any failure to pay the penalty
    imposed by this subsection; or
    (B) levy on any such property with respect to such
    failure.

    (i) Study of Administration of Employer Responsibility.--
    (1) In general.--The Secretary of Health and Human Services
    shall, in consultation with the Secretary of the Treasury,
    conduct a study of the procedures that are necessary to ensure
    that in the administration of this title and section 4980H of
    the Internal Revenue Code of 1986 (as added by section 1513)
    that the following rights are protected:
    (A) The rights of employees to preserve their right
    to confidentiality of their taxpayer return information
    and their right to enroll in a qualified health plan
    through an Exchange if an employer does not provide
    affordable coverage.
    (B) The rights of employers to adequate due process
    and access to information necessary to accurately
    determine any payment assessed on employers.
    (2) Report.--Not later than January 1, 2013, the Secretary
    of Health and Human Services shall report the results of the
    study conducted under paragraph (1), including any
    recommendations for legislative changes, to the Committees on
    Finance and Health, Education, Labor and Pensions of the Senate
    and the Committees of Education and Labor and Ways and Means of
    the House of Representatives.

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

    (a) In General.--The Secretary, in consultation with the Secretary
    of the Treasury, shall establish a program under which--
    (1) upon request of an Exchange, advance determinations are
    made under section 1411 with respect to the income eligibility
    of individuals enrolling in a qualified health plan in the
    individual market through the Exchange for the premium tax
    credit allowable under section 36B of the Internal Revenue Code
    of 1986 and the cost-sharing reductions under section 1402;
    (2) <>  the Secretary notifies--
    (A) the Exchange and the Secretary of the Treasury
    of the advance determinations; and
    (B) the Secretary of the Treasury of the name and
    employer identification number of each employer with
    respect to whom 1 or more employee of the employer were
    determined to be eligible for the premium tax credit
    under section 36B of the Internal Revenue Code of 1986
    and the cost-sharing reductions under section 1402
    because--

    [[Page 232]]

    (i) the employer did not provide minimum
    essential coverage; or
    (ii) the employer provided such minimum
    essential coverage but it was determined under
    section 36B(c)(2)(C) of such Code to either be
    unaffordable to the employee or not provide the
    required minimum actuarial value; and
    (3) the Secretary of the Treasury makes advance payments of
    such credit or reductions to the issuers of the qualified health
    plans in order to reduce the premiums payable by individuals
    eligible for such credit.

    (b) Advance Determinations.--
    (1) In general.--The Secretary shall provide under the
    program established under subsection (a) that advance
    determination of eligibility with respect to any individual
    shall be made--
    (A) during the annual open enrollment period
    applicable to the individual (or such other enrollment
    period as may be specified by the Secretary); and
    (B) on the basis of the individual's household
    income for the most recent taxable year for which the
    Secretary, after consultation with the Secretary of the
    Treasury, determines information is available.
    (2) Changes in circumstances.--The Secretary shall provide
    procedures for making advance determinations on the basis of
    information other than that described in paragraph (1)(B) in
    cases where information included with an application form
    demonstrates substantial changes in income, changes in family
    size or other household circumstances, change in filing status,
    the filing of an application for unemployment benefits, or other
    significant changes affecting eligibility, including--
    (A) allowing an individual claiming a decrease of 20
    percent or more in income, or filing an application for
    unemployment benefits, to have eligibility for the
    credit determined on the basis of household income for a
    later period or on the basis of the individual's
    estimate of such income for the taxable year; and
    (B) the determination of household income in cases
    where the taxpayer was not required to file a return of
    tax imposed by this chapter for the second preceding
    taxable year.

    (c) <>  Payment of Premium Tax Credits and
    Cost-sharing Reductions.--
    (1) In general.--The Secretary shall notify the Secretary of
    the Treasury and the Exchange through which the individual is
    enrolling of the advance determination under section 1411.
    (2) Premium tax credit.--
    (A) In general.--The Secretary of the Treasury shall
    make the advance payment under this section of any
    premium tax credit allowed under section 36B of the
    Internal Revenue Code of 1986 to the issuer of a
    qualified health plan on a monthly basis (or such other
    periodic basis as the Secretary may provide).
    (B) Issuer responsibilities.--An issuer of a
    qualified health plan receiving an advance payment with
    respect to an individual enrolled in the plan shall--

    [[Page 233]]

    (i) reduce the premium charged the insured for
    any period by the amount of the advance payment
    for the period;
    (ii) notify the Exchange and the Secretary of
    such reduction;
    (iii) include with each billing statement the
    amount by which the premium for the plan has been
    reduced by reason of the advance payment; and
    (iv) in the case of any nonpayment of premiums
    by the insured--
    (I) notify the Secretary of such
    nonpayment; and
    (II) allow a 3-month grace period
    for nonpayment of premiums before
    discontinuing coverage.
    (3) Cost-sharing reductions.--The Secretary shall also
    notify the Secretary of the Treasury and the Exchange under
    paragraph (1) if an advance payment of the cost-sharing
    reductions under section 1402 is to be made to the issuer of any
    qualified health plan with respect to any individual enrolled in
    the plan. The Secretary of the Treasury shall make such advance
    payment at such time and in such amount as the Secretary
    specifies in the notice.

    (d) No Federal Payments for Individuals Not Lawfully Present.--
    Nothing in this subtitle or the amendments made by this subtitle allows
    Federal payments, credits, or cost-sharing reductions for individuals
    who are not lawfully present in the United States.
    (e) State Flexibility.--Nothing in this subtitle or the amendments
    made by this subtitle shall be construed to prohibit a State from making
    payments to or on behalf of an individual for coverage under a qualified
    health plan offered through an Exchange that are in addition to any
    credits or cost-sharing reductions allowable to the individual under
    this subtitle and such amendments.

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

    (a) In General.--The Secretary shall establish a system meeting the
    requirements of this section under which residents of each State may
    apply for enrollment in, receive a determination of eligibility for
    participation in, and continue participation in, applicable State health
    subsidy programs. Such system shall ensure that if an individual
    applying to an Exchange is found through screening to be eligible for
    medical assistance under the State medicaid plan under title XIX, or
    eligible for enrollment under a State children's health insurance
    program (CHIP) under title XXI of such Act, the individual is enrolled
    for assistance under such plan or program.
    (b) Requirements Relating to Forms and Notice.--
    (1) Requirements relating to forms.--
    (A) In general.--The Secretary shall develop and
    provide to each State a single, streamlined form that--
    (i) may be used to apply for all applicable
    State health subsidy programs within the State;
    (ii) may be filed online, in person, by mail,
    or by telephone;

    [[Page 234]]

    (iii) may be filed with an Exchange or with
    State officials operating one of the other
    applicable State health subsidy programs; and
    (iv) is structured to maximize an applicant's
    ability to complete the form satisfactorily,
    taking into account the characteristics of
    individuals who qualify for applicable State
    health subsidy programs.
    (B) State authority to establish form.--A State may
    develop and use its own single, streamlined form as an
    alternative to the form developed under subparagraph (A)
    if the alternative form is consistent with standards
    promulgated by the Secretary under this section.
    (C) Supplemental eligibility forms.--The Secretary
    may allow a State to use a supplemental or alternative
    form in the case of individuals who apply for
    eligibility that is not determined on the basis of the
    household income (as defined in section 36B of the
    Internal Revenue Code of 1986).
    (2) Notice.--The Secretary shall provide that an applicant
    filing a form under paragraph (1) shall receive notice of
    eligibility for an applicable State health subsidy program
    without any need to provide additional information or paperwork
    unless such information or paperwork is specifically required by
    law when information provided on the form is inconsistent with
    data used for the electronic verification under paragraph (3) or
    is otherwise insufficient to determine eligibility.

    (c) Requirements Relating to Eligibility Based on Data Exchanges.--
    (1) Development of secure interfaces.--Each State shall
    develop for all applicable State health subsidy programs a
    secure, electronic interface allowing an exchange of data
    (including information contained in the application forms
    described in subsection (b)) that allows a determination of
    eligibility for all such programs based on a single application.
    Such interface shall be compatible with the method established
    for data verification under section 1411(c)(4).
    (2) Data matching program.--Each applicable State health
    subsidy program shall participate in a data matching arrangement
    for determining eligibility for participation in the program
    under paragraph (3) that--
    (A) provides access to data described in paragraph
    (3);
    (B) applies only to individuals who--
    (i) receive assistance from an applicable
    State health subsidy program; or
    (ii) apply for such assistance--
    (I) by filing a form described in
    subsection (b); or
    (II) by requesting a determination
    of eligibility and authorizing
    disclosure of the information described
    in paragraph (3) to applicable State
    health coverage subsidy programs for
    purposes of determining and establishing
    eligibility; and
    (C) consistent with standards promulgated by the
    Secretary, including the privacy and data security
    safeguards described in section 1942 of the Social
    Security Act or that are otherwise applicable to such
    programs.

    [[Page 235]]

    (3) Determination of eligibility.--
    (A) In general.--Each applicable State health
    subsidy program shall, to the maximum extent
    practicable--
    (i) establish, verify, and update eligibility
    for participation in the program using the data
    matching arrangement under paragraph (2); and
    (ii) determine such eligibility on the basis
    of reliable, third party data, including
    information described in sections 1137, 453(i),
    and 1942(a) of the Social Security Act, obtained
    through such arrangement.
    (B) Exception.--This paragraph shall not apply in
    circumstances with respect to which the Secretary
    determines that the administrative and other costs of
    use of the data matching arrangement under paragraph (2)
    outweigh its expected gains in accuracy, efficiency, and
    program participation.
    (4) Secretarial standards.--The Secretary shall, after
    consultation with persons in possession of the data to be
    matched and representatives of applicable State health subsidy
    programs, promulgate standards governing the timing, contents,
    and procedures for data matching described in this subsection.
    Such standards shall take into account administrative and other
    costs and the value of data matching to the establishment,
    verification, and updating of eligibility for applicable State
    health subsidy programs.

    (d) Administrative Authority.--
    (1) Agreements.--Subject to section 1411 and section
    6103(l)(21) of the Internal Revenue Code of 1986 and any other
    requirement providing safeguards of privacy and data integrity,
    the Secretary may establish model agreements, and enter into
    agreements, for the sharing of data under this section.
    (2) Authority of exchange to contract out.--Nothing in this
    section shall be construed to--
    (A) prohibit contractual arrangements through which
    a State medicaid agency determines eligibility for all
    applicable State health subsidy programs, but only if
    such agency complies with the Secretary's requirements
    ensuring reduced administrative costs, eligibility
    errors, and disruptions in coverage; or
    (B) change any requirement under title XIX that
    eligibility for participation in a State's medicaid
    program must be determined by a public agency.

    (e) Applicable State Health Subsidy Program.--In this section, the
    term ``applicable State health subsidy program'' means--
    (1) the program under this title for the enrollment in
    qualified health plans offered through an Exchange, including
    the premium tax credits under section 36B of the Internal
    Revenue Code of 1986 and cost-sharing reductions under section
    1402;
    (2) a State medicaid program under title XIX of the Social
    Security Act;
    (3) a State children's health insurance program (CHIP) under
    title XXI of such Act; and
    (4) a State program under section 1331 establishing
    qualified basic health plans.

    [[Page 236]]

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

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

    [[Page 237]]

    ``(i) establishing eligibility for
    participation in the Exchange, and verifying the
    appropriate amount of, any credit or reduction
    described in subparagraph (A),
    ``(ii) determining eligibility for
    participation in the State programs described in
    subparagraph (A).''.
    (2) Social security numbers.--Section 205(c)(2)(C) of the
    Social Security Act <>  is amended by adding
    at the end the following new clause:
    ``(x) The Secretary of Health and Human
    Services, and the Exchanges established under
    section 1311 of the Patient Protection and
    Affordable Care Act, are authorized to collect and
    use the names and social security account numbers
    of individuals as required to administer the
    provisions of, and the amendments made by, the
    such Act.''.

    (b) Confidentiality and Disclosure.--Paragraph (3) of section
    6103(a) of such Code <>  is amended by striking ``or
    (20)'' and inserting ``(20), or (21)''.

    (c) Procedures and Recordkeeping Related to Disclosures.--Paragraph
    (4) of section 6103(p) of such Code is amended--
    (1) by inserting ``, or any entity described in subsection
    (l)(21),'' after ``or (20)'' in the matter preceding
    subparagraph (A),
    (2) by inserting ``or any entity described in subsection
    (l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), and
    (3) by inserting ``or any entity described in subsection
    (l)(21),'' after ``or (20)'' both places it appears in the
    matter after subparagraph (F).

    (d) Unauthorized Disclosure or Inspection.--Paragraph (2) of section
    7213(a) of such Code is amended by striking ``or (20)'' and inserting
    ``(20), or (21)''.

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

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

    PART II--SMALL BUSINESS TAX CREDIT

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

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1
    of the Internal Revenue Code of 1986 (relating to business-

    [[Page 238]]

    related credits) is amended by inserting after section 45Q the
    following:

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

    ``(a) General Rule.--For purposes of section 38, in the case of an
    eligible small employer, the small employer health insurance credit
    determined under this section for any taxable year in the credit period
    is the amount determined under subsection (b).
    ``(b) Health Insurance Credit Amount.--Subject to subsection (c),
    the amount determined under this subsection with respect to any eligible
    small employer is equal to 50 percent (35 percent in the case of a tax-
    exempt eligible small employer) of the lesser of--
    ``(1) the aggregate amount of nonelective contributions the
    employer made on behalf of its employees during the taxable year
    under the arrangement described in subsection (d)(4) for
    premiums for qualified health plans offered by the employer to
    its employees through an Exchange, or
    ``(2) the aggregate amount of nonelective contributions
    which the employer would have made during the taxable year under
    the arrangement if each employee taken into account under
    paragraph (1) had enrolled in a qualified health plan which had
    a premium equal to the average premium (as determined by the
    Secretary of Health and Human Services) for the small group
    market in the rating area in which the employee enrolls for
    coverage.

    ``(c) Phaseout of Credit Amount Based on Number of Employees and
    Average Wages.--The amount of the credit determined under subsection (b)
    without regard to this subsection shall be reduced (but not below zero)
    by the sum of the following amounts:
    ``(1) Such amount multiplied by a fraction the numerator of
    which is the total number of full-time equivalent employees of
    the employer in excess of 10 and the denominator of which is 15.
    ``(2) Such amount multiplied by a fraction the numerator of
    which is the average annual wages of the employer in excess of
    the dollar amount in effect under subsection (d)(3)(B) and the
    denominator of which is such dollar amount.

    ``(d) Eligible Small Employer.--For purposes of this section--
    ``(1) In general.--The term `eligible small employer' means,
    with respect to any taxable year, an employer--
    ``(A) which has no more than 25 full-time equivalent
    employees for the taxable year,
    ``(B) the average annual wages of which do not
    exceed an amount equal to twice the dollar amount in
    effect under paragraph (3)(B) for the taxable year, and
    ``(C) which has in effect an arrangement described
    in paragraph (4).
    ``(2) Full-time equivalent employees.--
    ``(A) In general.--The term `full-time equivalent
    employees' means a number of employees equal to the
    number determined by dividing--
    ``(i) the total number of hours of service for
    which wages were paid by the employer to employees
    during the taxable year, by
    ``(ii) 2,080.

    [[Page 239]]

    Such number shall be rounded to the next lowest whole
    number if not otherwise a whole number.
    ``(B) Excess hours not counted.--If an employee
    works in excess of 2,080 hours of service during any
    taxable year, such excess shall not be taken into
    account under subparagraph (A).
    ``(C) <>  Hours of service.--The
    Secretary, in consultation with the Secretary of Labor,
    shall prescribe such regulations, rules, and guidance as
    may be necessary to determine the hours of service of an
    employee, including rules for the application of this
    paragraph to employees who are not compensated on an
    hourly basis.
    ``(3) Average annual wages.--
    ``(A) In general.--The average annual wages of an
    eligible small employer for any taxable year is the
    amount determined by dividing--
    ``(i) the aggregate amount of wages which were
    paid by the employer to employees during the
    taxable year, by
    ``(ii) the number of full-time equivalent
    employees of the employee determined under
    paragraph (2) for the taxable year.
    Such amount shall be rounded to the next lowest multiple
    of $1,000 if not otherwise such a multiple.
    ``(B) Dollar amount.--For purposes of paragraph
    (1)(B)--
    ``(i) 2011, 2012, and 2013.--The dollar amount
    in effect under this paragraph for taxable years
    beginning in 2011, 2012, or 2013 is $20,000.
    ``(ii) Subsequent years.--In the case of a
    taxable year beginning in a calendar year after
    2013, the dollar amount in effect under this
    paragraph shall be equal to $20,000, multiplied by
    the cost-of-living adjustment determined under
    section 1(f)(3) for the calendar year, determined
    by substituting `calendar year 2012' for `calendar
    year 1992' in subparagraph (B) thereof.
    ``(4) Contribution arrangement.--An arrangement is described
    in this paragraph if it requires an eligible small employer to
    make a nonelective contribution on behalf of each employee who
    enrolls in a qualified health plan offered to employees by the
    employer through an exchange in an amount equal to a uniform
    percentage (not less than 50 percent) of the premium cost of the
    qualified health plan.
    ``(5) Seasonal worker hours and wages not counted.--For
    purposes of this subsection--
    ``(A) In general.--The number of hours of service
    worked by, and wages paid to, a seasonal worker of an
    employer shall not be taken into account in determining
    the full-time equivalent employees and average annual
    wages of the employer unless the worker works for the
    employer on more than 120 days during the taxable year.
    ``(B) Definition of seasonal worker.--The term
    `seasonal worker' means a worker who performs labor or
    services on a seasonal basis as defined by the Secretary
    of Labor, including workers covered by section
    500.20(s)(1) of title 29, Code of Federal Regulations
    and retail workers employed exclusively during holiday
    seasons.

    [[Page 240]]

    ``(e) Other Rules and Definitions.--For purposes of this section--
    ``(1) Employee.--
    ``(A) Certain employees excluded.--The term
    `employee' shall not include--
    ``(i) an employee within the meaning of
    section 401(c)(1),
    ``(ii) any 2-percent shareholder (as defined
    in section 1372(b)) of an eligible small business
    which is an S corporation,
    ``(iii) any 5-percent owner (as defined in
    section 416(i)(1)(B)(i)) of an eligible small
    business, or
    ``(iv) any individual who bears any of the
    relationships described in subparagraphs (A)
    through (G) of section 152(d)(2) to, or is a
    dependent described in section 152(d)(2)(H) of, an
    individual described in clause (i), (ii), or
    (iii).
    ``(B) Leased employees.--The term `employee' shall
    include a leased employee within the meaning of section
    414(n).
    ``(2) Credit period.--The term `credit period' means, with
    respect to any eligible small employer, the 2-consecutive-
    taxable year period beginning with the 1st taxable year in which
    the employer (or any predecessor) offers 1 or more qualified
    health plans to its employees through an Exchange.
    ``(3) Nonelective contribution.--The term `nonelective
    contribution' means an employer contribution other than an
    employer contribution pursuant to a salary reduction
    arrangement.
    ``(4) Wages.--The term `wages' has the meaning given such
    term by section 3121(a) (determined without regard to any dollar
    limitation contained in such section).
    ``(5) Aggregation and other rules made applicable.--
    ``(A) Aggregation rules.--All employers treated as a
    single employer under subsection (b), (c), (m), or (o)
    of section 414 shall be treated as a single employer for
    purposes of this section.
    ``(B) <>  Other rules.--Rules
    similar to the rules of subsections (c), (d), and (e) of
    section 52 shall apply.

    ``(f) Credit Made Available to Tax-exempt Eligible Small
    Employers.--
    ``(1) In general.--In the case of a tax-exempt eligible
    small employer, there shall be treated as a credit allowable
    under subpart C (and not allowable under this subpart) the
    lesser of--
    ``(A) the amount of the credit determined under this
    section with respect to such employer, or
    ``(B) the amount of the payroll taxes of the
    employer during the calendar year in which the taxable
    year begins.
    ``(2) Tax-exempt eligible small employer.--For purposes of
    this section, the term `tax-exempt eligible small employer'
    means an eligible small employer which is any organization
    described in section 501(c) which is exempt from taxation under
    section 501(a).
    ``(3) Payroll taxes.--For purposes of this subsection--
    ``(A) In general.--The term `payroll taxes' means--

    [[Page 241]]

    ``(i) amounts required to be withheld from the
    employees of the tax-exempt eligible small
    employer under section 3401(a),
    ``(ii) amounts required to be withheld from
    such employees under section 3101(b), and
    ``(iii) amounts of the taxes imposed on the
    tax-exempt eligible small employer under section
    3111(b).
    ``(B) <>  Special rule.--A
    rule similar to the rule of section 24(d)(2)(C) shall
    apply for purposes of subparagraph (A).

    ``(g) Application of Section for Calendar Years 2011, 2012, and
    2013.--In the case of any taxable year beginning in 2011, 2012, or 2013,
    the following modifications to this section shall apply in determining
    the amount of the credit under subsection (a):
    ``(1) No credit period required.--The credit shall be
    determined without regard to whether the taxable year is in a
    credit period and for purposes of applying this section to
    taxable years beginning after 2013, no credit period shall be
    treated as beginning with a taxable year beginning before 2014.
    ``(2) Amount of credit.--The amount of the credit determined
    under subsection (b) shall be determined--
    ``(A) by substituting `35 percent (25 percent in the
    case of a tax-exempt eligible small employer)' for `50
    percent (35 percent in the case of a tax-exempt eligible
    small employer)',
    ``(B) by reference to an eligible small employer's
    nonelective contributions for premiums paid for health
    insurance coverage (within the meaning of section
    9832(b)(1)) of an employee, and
    ``(C) <>  by substituting for
    the average premium determined under subsection (b)(2)
    the amount the Secretary of Health and Human Services
    determines is the average premium for the small group
    market in the State in which the employer is offering
    health insurance coverage (or for such area within the
    State as is specified by the Secretary).
    ``(3) Contribution arrangement.--An arrangement shall not
    fail to meet the requirements of subsection (d)(4) solely
    because it provides for the offering of insurance outside of an
    Exchange.

    ``(h) Insurance Definitions.--Any term used in this section which is
    also used in the Public Health Service Act or subtitle A of title I of
    the Patient Protection and Affordable Care Act shall have the meaning
    given such term by such Act or subtitle.
    ``(i) Regulations.--The Secretary shall prescribe such regulations
    as may be necessary to carry out the provisions of this section,
    including regulations to prevent the avoidance of the 2-year limit on
    the credit period through the use of successor entities and the
    avoidance of the limitations under subsection (c) through the use of
    multiple entities.''.
    (b) Credit To Be Part of General Business Credit.--Section 38(b) of
    the Internal Revenue Code of 1986 <>  (relating to
    current year business credit) is amended by striking ``plus'' at the end
    of paragraph (34), by striking the period at the end of paragraph (35)
    and inserting ``, plus'', and by inserting after paragraph (35) the
    following:

    [[Page 242]]

    ``(36) the small employer health insurance credit determined
    under section 45R.''.

    (c) Credit Allowed Against Alternative Minimum Tax.--Section
    38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified
    credits) <>  is amended by redesignating clauses (vi),
    (vii), and (viii) as clauses (vii), (viii), and (ix), respectively, and
    by inserting after clause (v) the following new clause:
    ``(vi) the credit determined under section
    45R,''.

    (d) Disallowance of Deduction for Certain Expenses for Which Credit
    Allowed.--
    (1) In general.--Section 280C of the Internal Revenue Code
    of 1986 (relating to disallowance of deduction for certain
    expenses for which credit allowed), as amended by section
    1401(b), is amended by adding at the end the following new
    subsection:

    ``(h) Credit for Employee Health Insurance Expenses of Small
    Employers.--No deduction shall be allowed for that portion of the
    premiums for qualified health plans (as defined in section 1301(a) of
    the Patient Protection and Affordable Care Act), or for health insurance
    coverage in the case of taxable years beginning in 2011, 2012, or 2013,
    paid by an employer which is equal to the amount of the credit
    determined under section 45R(a) with respect to the premiums.''.
    (2) Deduction for expiring credits.--Section 196(c) of such
    Code is amended by striking ``and'' at the end of paragraph
    (12), by striking the period at the end of paragraph (13) and
    inserting ``, and'', and by adding at the end the following new
    paragraph:
    ``(14) the small employer health insurance credit determined
    under section 45R(a).''.

    (e) Clerical Amendment.--The table of sections for subpart D of part
    IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is
    amended by adding at the end the following:

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

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

    Subtitle F--Shared Responsibility for Health Care

    PART I--INDIVIDUAL RESPONSIBILITY

    SEC. 1501. <>  REQUIREMENT TO MAINTAIN MINIMUM
    ESSENTIAL COVERAGE.

    (a) Findings.--Congress makes the following findings:
    (1) In general.--The individual responsibility requirement
    provided for in this section (in this subsection referred to as
    the ``requirement'') is commercial and economic in nature, and
    substantially affects interstate commerce, as a result of the
    effects described in paragraph (2).

    [[Page 243]]

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

    [[Page 244]]

    markets. By significantly increasing health insurance
    coverage and the size of purchasing pools, which will
    increase economies of scale, the requirement, together
    with the other provisions of this Act, will
    significantly reduce administrative costs and lower
    health insurance premiums. The requirement is essential
    to creating effective health insurance markets that do
    not require underwriting and eliminate its associated
    administrative costs.
    (3) Supreme court ruling.--In United States v. South-Eastern
    Underwriters Association (322 U.S. 533 (1944)), the Supreme
    Court of the United States ruled that insurance is interstate
    commerce subject to Federal regulation.

    (b) In General.--Subtitle D of the Internal Revenue Code of 1986 is
    amended by adding at the end the following new chapter:

    ``CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE

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

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

    ``(a) Requirement To Maintain Minimum Essential Coverage.--An
    applicable individual shall for each month beginning after 2013 ensure
    that the individual, and any dependent of the individual who is an
    applicable individual, is covered under minimum essential coverage for
    such month.
    ``(b) Shared Responsibility Payment.--
    ``(1) In general.-- <> If an applicable
    individual fails to meet the requirement of subsection (a) for 1
    or more months during any calendar year beginning after 2013,
    then, except as provided in subsection (d), there is hereby
    imposed a penalty with respect to the individual in the amount
    determined under subsection (c).
    ``(2) Inclusion with return.--Any penalty imposed by this
    section with respect to any month shall be included with a
    taxpayer's return under chapter 1 for the taxable year which
    includes such month.
    ``(3) Payment of penalty.--If an individual with respect to
    whom a penalty is imposed by this section for any month--
    ``(A) is a dependent (as defined in section 152) of
    another taxpayer for the other taxpayer's taxable year
    including such month, such other taxpayer shall be
    liable for such penalty, or
    ``(B) files a joint return for the taxable year
    including such month, such individual and the spouse of
    such individual shall be jointly liable for such
    penalty.

    ``(c) Amount of Penalty.--
    ``(1) In general.--The penalty determined under this
    subsection for any month with respect to any individual is an
    amount equal to \1/12\ of the applicable dollar amount for the
    calendar year.
    ``(2) Dollar limitation.--The amount of the penalty imposed
    by this section on any taxpayer for any taxable year with
    respect to all individuals for whom the taxpayer is liable under
    subsection (b)(3) shall not exceed an amount equal to 300
    percent the applicable dollar amount (determined without

    [[Page 245]]

    regard to paragraph (3)(C)) for the calendar year with or within
    which the taxable year ends.
    ``(3) Applicable dollar amount.--For purposes of paragraph
    (1)--
    ``(A) In general.--Except as provided in
    subparagraphs (B) and (C), the applicable dollar amount
    is $750.
    ``(B) Phase in.--The applicable dollar amount is $95
    for 2014 and $350 for 2015.
    ``(C) Special rule for individuals under age 18.--If
    an applicable individual has not attained the age of 18
    as of the beginning of a month, the applicable dollar
    amount with respect to such individual for the month
    shall be equal to one-half of the applicable dollar
    amount for the calendar year in which the month occurs.
    ``(D) Indexing of amount.--In the case of any
    calendar year beginning after 2016, the applicable
    dollar amount shall be equal to $750, increased by an
    amount equal to--
    ``(i) $750, multiplied by
    ``(ii) the cost-of-living adjustment
    determined under section 1(f)(3) for the calendar
    year, determined by substituting `calendar year
    2015' for `calendar year 1992' in subparagraph (B)
    thereof.
    If the amount of any increase under clause (i) is not a
    multiple of $50, such increase shall be rounded to the
    next lowest multiple of $50.
    ``(4) Terms relating to income and families.--For purposes
    of this section--
    ``(A) Family size.--The family size involved with
    respect to any taxpayer shall be equal to the number of
    individuals for whom the taxpayer is allowed a deduction
    under section 151 (relating to allowance of deduction
    for personal exemptions) for the taxable year.
    ``(B) Household income.--The term `household income'
    means, with respect to any taxpayer for any taxable
    year, an amount equal to the sum of--
    ``(i) the modified gross income of the
    taxpayer, plus
    ``(ii) the aggregate modified gross incomes of
    all other individuals who--
    ``(I) were taken into account in
    determining the taxpayer's family size
    under paragraph (1), and
    ``(II) were required to file a
    return of tax imposed by section 1 for
    the taxable year.
    ``(C) Modified gross income.--The term `modified
    gross income' means gross income--
    ``(i) decreased by the amount of any deduction
    allowable under paragraph (1), (3), (4), or (10)
    of section 62(a),
    ``(ii) increased by the amount of interest
    received or accrued during the taxable year which
    is exempt from tax imposed by this chapter, and
    ``(iii) determined without regard to sections
    911, 931, and 933.
    ``(D) Poverty line.--

    [[Page 246]]

    ``(i) In general.--The term `poverty line' has
    the meaning given that term in section 2110(c)(5)
    of the Social Security Act (42 U.S.C.
    1397jj(c)(5)).
    ``(ii) Poverty line used.--In the case of any
    taxable year ending with or within a calendar
    year, the poverty line used shall be the most
    recently published poverty line as of the 1st day
    of such calendar year.

    ``(d) Applicable Individual.--For purposes of this section--
    ``(1) In general.--The term `applicable individual' means,
    with respect to any month, an individual other than an
    individual described in paragraph (2), (3), or (4).
    ``(2) Religious exemptions.--
    ``(A) Religious conscience exemption.--Such term
    shall not include any individual for any month if such
    individual has in effect an exemption under section
    1311(d)(4)(H) of the Patient Protection and Affordable
    Care Act which certifies that such individual is a
    member of a recognized religious sect or division
    thereof described in section 1402(g)(1) and an adherent
    of established tenets or teachings of such sect or
    division as described in such section.
    ``(B) Health care sharing ministry.--
    ``(i) In general.--Such term shall not include
    any individual for any month if such individual is
    a member of a health care sharing ministry for the
    month.
    ``(ii) Health care sharing ministry.--The term
    `health care sharing ministry' means an
    organization--
    ``(I) which is described in section
    501(c)(3) and is exempt from taxation
    under section 501(a),
    ``(II) members of which share a
    common set of ethical or religious
    beliefs and share medical expenses among
    members in accordance with those beliefs
    and without regard to the State in which
    a member resides or is employed,
    ``(III) members of which retain
    membership even after they develop a
    medical condition,
    ``(IV) which (or a predecessor of
    which) has been in existence at all
    times since December 31, 1999, and
    medical expenses of its members have
    been shared continuously and without
    interruption since at least December 31,
    1999, and
    ``(V) which conducts an annual audit
    which is performed by an independent
    certified public accounting firm in
    accordance with generally accepted
    accounting principles and which is made
    available to the public upon request.
    ``(3) Individuals not lawfully present.--Such term shall not
    include an individual for any month if for the month the
    individual is not a citizen or national of the United States or
    an alien lawfully present in the United States.
    ``(4) Incarcerated individuals.--Such term shall not include
    an individual for any month if for the month the individual is
    incarcerated, other than incarceration pending the disposition
    of charges.

    ``(e) Exemptions.--No penalty shall be imposed under subsection (a)
    with respect to--
    ``(1) Individuals who cannot afford coverage.--

    [[Page 247]]

    ``(A) In general.--Any applicable individual for any
    month if the applicable individual's required
    contribution (determined on an annual basis) for
    coverage for the month exceeds 8 percent of such
    individual's household income for the taxable year
    described in section 1412(b)(1)(B) of the Patient
    Protection and Affordable Care Act. For purposes of
    applying this subparagraph, the taxpayer's household
    income shall be increased by any exclusion from gross
    income for any portion of the required contribution made
    through a salary reduction arrangement.
    ``(B) <>  Required
    contribution.--For purposes of this paragraph, the term
    `required contribution' means--
    ``(i) in the case of an individual eligible to
    purchase minimum essential coverage consisting of
    coverage through an eligible-employer-sponsored
    plan, the portion of the annual premium which
    would be paid by the individual (without regard to
    whether paid through salary reduction or
    otherwise) for self-only coverage, or
    ``(ii) in the case of an individual eligible
    only to purchase minimum essential coverage
    described in subsection (f)(1)(C), the annual
    premium for the lowest cost bronze plan available
    in the individual market through the Exchange in
    the State in the rating area in which the
    individual resides (without regard to whether the
    individual purchased a qualified health plan
    through the Exchange), reduced by the amount of
    the credit allowable under section 36B for the
    taxable year (determined as if the individual was
    covered by a qualified health plan offered through
    the Exchange for the entire taxable year).
    ``(C) Special rules for individuals related to
    employees.--For purposes of subparagraph (B)(i), if an
    applicable individual is eligible for minimum essential
    coverage through an employer by reason of a relationship
    to an employee, the determination shall be made by
    reference to the affordability of the coverage to the
    employee.
    ``(D) <>
    Indexing.--In the case of plan years beginning in any
    calendar year after 2014, subparagraph (A) shall be
    applied by substituting for `8 percent' the percentage
    the Secretary of Health and Human Services determines
    reflects the excess of the rate of premium growth
    between the preceding calendar year and 2013 over the
    rate of income growth for such period.
    ``(2) Taxpayers with income under 100 percent of poverty
    line.--Any applicable individual for any month during a calendar
    year if the individual's household income for the taxable year
    described in section 1412(b)(1)(B) of the Patient Protection and
    Affordable Care Act is less than 100 percent of the poverty line
    for the size of the family involved (determined in the same
    manner as under subsection (b)(4)).
    ``(3) Members of indian tribes.--Any applicable individual
    for any month during which the individual is a member of an
    Indian tribe (as defined in section 45A(c)(6)).
    ``(4) Months during short coverage gaps.--
    ``(A) In general.--Any month the last day of which
    occurred during a period in which the applicable
    individual

    [[Page 248]]

    was not covered by minimum essential coverage for a
    continuous period of less than 3 months.
    ``(B) <>  Special rules.--For
    purposes of applying this paragraph--
    ``(i) the length of a continuous period shall
    be determined without regard to the calendar years
    in which months in such period occur,
    ``(ii) if a continuous period is greater than
    the period allowed under subparagraph (A), no
    exception shall be provided under this paragraph
    for any month in the period, and
    ``(iii) if there is more than 1 continuous
    period described in subparagraph (A) covering
    months in a calendar year, the exception provided
    by this paragraph shall only apply to months in
    the first of such periods.
    The Secretary shall prescribe rules for the collection
    of the penalty imposed by this section in cases where
    continuous periods include months in more than 1 taxable
    year.
    ``(5) Hardships.--Any applicable individual who for any
    month is determined by the Secretary of Health and Human
    Services under section 1311(d)(4)(H) to have suffered a hardship
    with respect to the capability to obtain coverage under a
    qualified health plan.

    ``(f) Minimum Essential Coverage.--For purposes of this section--
    ``(1) <>  In general.--The term `minimum
    essential coverage' means any of the following:
    ``(A) Government sponsored programs.--Coverage
    under--
    ``(i) the Medicare program under part A of
    title XVIII of the Social Security Act,
    ``(ii) the Medicaid program under title XIX of
    the Social Security Act,
    ``(iii) the CHIP program under title XXI of
    the Social Security Act,
    ``(iv) the TRICARE for Life program,
    ``(v) the veteran's health care program under
    chapter 17 of title 38, United States Code, or
    ``(vi) a health plan under section 2504(e) of
    title 22, United States Code (relating to Peace
    Corps volunteers).
    ``(B) Employer-sponsored plan.--Coverage under an
    eligible employer-sponsored plan.
    ``(C) Plans in the individual market.--Coverage
    under a health plan offered in the individual market
    within a State.
    ``(D) Grandfathered health plan.--Coverage under a
    grandfathered health plan.
    ``(E) Other coverage.--Such other health benefits
    coverage, such as a State health benefits risk pool, as
    the Secretary of Health and Human Services, in
    coordination with the Secretary, recognizes for purposes
    of this subsection.
    ``(2) Eligible employer-sponsored plan.--The term `eligible
    employer-sponsored plan' means, with respect to any

    [[Page 249]]

    employee, a group health plan or group health insurance coverage
    offered by an employer to the employee which is--
    ``(A) a governmental plan (within the meaning of
    section 2791(d)(8) of the Public Health Service Act), or
    ``(B) any other plan or coverage offered in the
    small or large group market within a State.
    Such term shall include a grandfathered health plan described in
    paragraph (1)(D) offered in a group market.
    ``(3) Excepted benefits not treated as minimum essential
    coverage.--The term `minimum essential coverage' shall not
    include health insurance coverage which consists of coverage of
    excepted benefits--
    ``(A) described in paragraph (1) of subsection (c)
    of section 2791 of the Public Health Service Act; or
    ``(B) described in paragraph (2), (3), or (4) of
    such subsection if the benefits are provided under a
    separate policy, certificate, or contract of insurance.
    ``(4) Individuals residing outside united states or
    residents of territories.--Any applicable individual shall be
    treated as having minimum essential coverage for any month--
    ``(A) if such month occurs during any period
    described in subparagraph (A) or (B) of section
    911(d)(1) which is applicable to the individual, or
    ``(B) if such individual is a bona fide resident of
    any possession of the United States (as determined under
    section 937(a)) for such month.
    ``(5) Insurance-related terms.--Any term used in this
    section which is also used in title I of the Patient Protection
    and Affordable Care Act shall have the same meaning as when used
    in such title.

    ``(g) Administration and Procedure.--
    ``(1) In general.--The penalty provided by this section
    shall be paid upon notice and demand by the Secretary, and
    except as provided in paragraph (2), shall be assessed and
    collected in the same manner as an assessable penalty under
    subchapter B of chapter 68.
    ``(2) Special rules.--Notwithstanding any other provision of
    law--
    ``(A) Waiver of criminal penalties.--In the case of
    any failure by a taxpayer to timely pay any penalty
    imposed by this section, such taxpayer shall not be
    subject to any criminal prosecution or penalty with
    respect to such failure.
    ``(B) Limitations on liens and levies.--The
    Secretary shall not--
    ``(i) file notice of lien with respect to any
    property of a taxpayer by reason of any failure to
    pay the penalty imposed by this section, or
    ``(ii) levy on any such property with respect
    to such failure.''.

    (c) Clerical Amendment.--The table of chapters for subtitle D of the
    Internal Revenue Code of 1986 is amended by inserting after the item
    relating to chapter 47 the following new item:

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

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

    [[Page 250]]

    SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE.

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

    ``Subpart D--Information Regarding Health Insurance Coverage

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

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

    ``(a) In General.--Every person who provides minimum essential
    coverage to an individual during a calendar year shall, at such time as
    the Secretary may prescribe, make a return described in subsection (b).
    ``(b) Form and Manner of Return.--
    ``(1) In general.--A return is described in this subsection
    if such return--
    ``(A) is in such form as the Secretary may
    prescribe, and
    ``(B) contains--
    ``(i) the name, address and TIN of the primary
    insured and the name and TIN of each other
    individual obtaining coverage under the policy,
    ``(ii) the dates during which such individual
    was covered under minimum essential coverage
    during the calendar year,
    ``(iii) in the case of minimum essential
    coverage which consists of health insurance
    coverage, information concerning--
    ``(I) whether or not the coverage is
    a qualified health plan offered through
    an Exchange established under section
    1311 of the Patient Protection and
    Affordable Care Act, and
    ``(II) in the case of a qualified
    health plan, the amount (if any) of any
    advance payment under section 1412 of
    the Patient Protection and Affordable
    Care Act of any cost-sharing reduction
    under section 1402 of such Act or of any
    premium tax credit under section 36B
    with respect to such coverage, and
    ``(iv) such other information as the Secretary
    may require.
    ``(2) Information relating to employer-provided coverage.--
    If minimum essential coverage provided to an individual under
    subsection (a) consists of health insurance coverage of a health
    insurance issuer provided through a group health plan of an
    employer, a return described in this subsection shall include--
    ``(A) the name, address, and employer identification
    number of the employer maintaining the plan,
    ``(B) the portion of the premium (if any) required
    to be paid by the employer, and
    ``(C) if the health insurance coverage is a
    qualified health plan in the small group market offered
    through an Exchange, such other information as the
    Secretary may require for administration of the credit
    under section 45R

    [[Page 251]]

    (relating to credit for employee health insurance
    expenses of small employers).

    ``(c) Statements To Be Furnished to Individuals With Respect to Whom
    Information Is Reported.--
    ``(1) In general.--Every person required to make a return
    under subsection (a) shall furnish to each individual whose name
    is required to be set forth in such return a written statement
    showing--
    ``(A) the name and address of the person required to
    make such return and the phone number of the information
    contact for such person, and
    ``(B) the information required to be shown on the
    return with respect to such individual.
    ``(2) Time for furnishing statements.--The written statement
    required under paragraph (1) shall be furnished on or before
    January 31 of the year following the calendar year for which the
    return under subsection (a) was required to be made.

    ``(d) Coverage Provided by Governmental Units.--In the case of
    coverage provided by any governmental unit or any agency or
    instrumentality thereof, the officer or employee who enters into the
    agreement to provide such coverage (or the person appropriately
    designated for purposes of this section) shall make the returns and
    statements required by this section.
    ``(e) Minimum Essential Coverage.--For purposes of this section, the
    term `minimum essential coverage' has the meaning given such term by
    section 5000A(f).''.
    (b) Assessable Penalties.--
    (1) Subparagraph (B) of section 6724(d)(1) of the Internal
    Revenue Code of 1986 <>  (relating to
    definitions) is amended by striking ``or'' at the end of clause
    (xxii), by striking ``and'' at the end of clause (xxiii) and
    inserting ``or'', and by inserting after clause (xxiii) the
    following new clause:
    ``(xxiv) section 6055 (relating to returns
    relating to information regarding health insurance
    coverage), and''.
    (2) Paragraph (2) of section 6724(d) of such Code is amended
    by striking ``or'' at the end of subparagraph (EE), by striking
    the period at the end of subparagraph (FF) and inserting ``,
    or'' and by inserting after subparagraph (FF) the following new
    subparagraph:
    ``(GG) section 6055(c) (relating to statements
    relating to information regarding health insurance
    coverage).''.

    (c) Notification of Nonenrollment.-- <> Not later than June 30 of each year, the Secretary of the
    Treasury, acting through the Internal Revenue Service and in
    consultation with the Secretary of Health and Human Services, shall send
    a notification to each individual who files an individual income tax
    return and who is not enrolled in minimum essential coverage (as defined
    in section 5000A of the Internal Revenue Code of 1986). Such
    notification shall contain information on the services available through
    the Exchange operating in the State in which such individual resides.

    (d) Conforming Amendment.--The table of subparts for part III of
    subchapter A of chapter 61 of such Code is amended by inserting after
    the item relating to subpart C the following new item:

    [[Page 252]]

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

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

    PART II--EMPLOYER RESPONSIBILITIES

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

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

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

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

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

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

    ``SEC. 18B. <>  NOTICE TO EMPLOYEES.

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

    [[Page 253]]

    ``(b) Effective Date.--Subsection (a) shall take effect with respect
    to employers in a State beginning on March 1, 2013.''.

    SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERS.

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

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

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

    then there is hereby imposed on the employer an assessable payment equal
    to the product of the applicable payment amount and the number of
    individuals employed by the employer as full-time employees during such
    month.
    ``(b) Large Employers With Waiting Periods Exceeding 30 Days.--
    ``(1) In general.--In the case of any applicable large
    employer which requires an extended waiting period to enroll in
    any minimum essential coverage under an employer-sponsored plan
    (as defined in section 5000A(f)(2)), there is hereby imposed on
    the employer an assessable payment, in the amount specified in
    paragraph (2), for each full-time employee of the employer to
    whom the extended waiting period applies.
    ``(2) Amount.--For purposes of paragraph (1), the amount
    specified in this paragraph for a full-time employee is--
    ``(A) in the case of an extended waiting period
    which exceeds 30 days but does not exceed 60 days, $400,
    and
    ``(B) in the case of an extended waiting period
    which exceeds 60 days, $600.
    ``(3) Extended waiting period.--The term `extended waiting
    period' means any waiting period (as defined in section
    2701(b)(4) of the Public Health Service Act) which exceeds 30
    days.

    ``(c) Large Employers Offering Coverage With Employees Who Qualify
    for Premium Tax Credits or Cost-sharing Reductions.--
    ``(1) In general.--If--
    ``(A) an applicable large employer offers to its
    full-time employees (and their dependents) the
    opportunity to enroll in minimum essential coverage
    under an eligible employer-sponsored plan (as defined in
    section 5000A(f)(2)) for any month, and
    ``(B) 1 or more full-time employees of the
    applicable large employer has been certified to the
    employer under section 1411 of the Patient Protection
    and Affordable Care Act as having enrolled for such
    month in a qualified health

    [[Page 254]]

    plan with respect to which an applicable premium tax
    credit or cost-sharing reduction is allowed or paid with
    respect to the employee,
    then there is hereby imposed on the employer an assessable
    payment equal to the product of the number of full-time
    employees of the applicable large employer described in
    subparagraph (B) for such month and 400 percent of the
    applicable payment amount.
    ``(2) Overall limitation.--The aggregate amount of tax
    determined under paragraph (1) with respect to all employees of
    an applicable large employer for any month shall not exceed the
    product of the applicable payment amount and the number of
    individuals employed by the employer as full-time employees
    during such month.

    ``(d) Definitions and Special Rules.--For purposes of this section--
    ``(1) Applicable payment amount.--The term `applicable
    payment amount' means, with respect to any month, \1/12\ of
    $750.
    ``(2) Applicable large employer.--
    ``(A) In general.--The term `applicable large
    employer' means, with respect to a calendar year, an
    employer who employed an average of at least 50 full-
    time employees on business days during the preceding
    calendar year.
    ``(B) Exemption for certain employers.--
    ``(i) In general.--An employer shall not be
    considered to employ more than 50 full-time
    employees if--
    ``(I) the employer's workforce
    exceeds 50 full-time employees for 120
    days or fewer during the calendar year,
    and
    ``(II) the employees in excess of 50
    employed during such 120-day period were
    seasonal workers.
    ``(ii) Definition of seasonal workers.--The
    term `seasonal worker' means a worker who performs
    labor or services on a seasonal basis as defined
    by the Secretary of Labor, including workers
    covered by section 500.20(s)(1) of title 29, Code
    of Federal Regulations and retail workers employed
    exclusively during holiday seasons.
    ``(C) Rules for determining employer size.--For
    purposes of this paragraph--
    ``(i) Application of aggregation rule for
    employers.--All persons treated as a single
    employer under subsection (b), (c), (m), or (o) of
    section 414 of the Internal Revenue Code of 1986
    shall be treated as 1 employer.
    ``(ii) Employers not in existence in preceding
    year.--In the case of an employer which was not in
    existence throughout the preceding calendar year,
    the determination of whether such employer is an
    applicable large employer shall be based on the
    average number of employees that it is reasonably
    expected such employer will employ on business
    days in the current calendar year.
    ``(iii) Predecessors.--Any reference in this
    subsection to an employer shall include a
    reference to any predecessor of such employer.

    [[Page 255]]

    ``(3) Applicable premium tax credit and cost-sharing
    reduction.--The term `applicable premium tax credit and cost-
    sharing reduction' means--
    ``(A) any premium tax credit allowed under section
    36B,
    ``(B) any cost-sharing reduction under section 1402
    of the Patient Protection and Affordable Care Act, and
    ``(C) any advance payment of such credit or
    reduction under section 1412 of such Act.
    ``(4) Full-time employee.--
    ``(A) In general.--The term `full-time employee'
    means an employee who is employed on average at least 30
    hours of service per week.
    ``(B) Hours of service.--
    <> The Secretary, in
    consultation with the Secretary of Labor, shall
    prescribe such regulations, rules, and guidance as may
    be necessary to determine the hours of service of an
    employee, including rules for the application of this
    paragraph to employees who are not compensated on an
    hourly basis.
    ``(5) Inflation adjustment.--
    ``(A) In general.--In the case of any calendar year
    after 2014, each of the dollar amounts in subsection
    (b)(2) and (d)(1) shall be increased by an amount equal
    to the product of--
    ``(i) such dollar amount, and
    ``(ii) the premium adjustment percentage (as
    defined in section 1302(c)(4) of the Patient
    Protection and Affordable Care Act) for the
    calendar year.
    ``(B) Rounding.--If the amount of any increase under
    subparagraph (A) is not a multiple of $10, such increase
    shall be rounded to the next lowest multiple of $10.
    ``(6) Other definitions.--Any term used in this section
    which is also used in the Patient Protection and Affordable Care
    Act shall have the same meaning as when used in such Act.
    ``(7) Tax nondeductible.--For denial of deduction for the
    tax imposed by this section, see section 275(a)(6).

    ``(e) Administration and Procedure.--
    ``(1) In general.--Any assessable payment provided by this
    section shall be paid upon notice and demand by the Secretary,
    and shall be assessed and collected in the same manner as an
    assessable penalty under subchapter B of chapter 68.
    ``(2) Time for payment.--The Secretary may provide for the
    payment of any assessable payment provided by this section on an
    annual, monthly, or other periodic basis as the Secretary may
    prescribe.
    ``(3) Coordination with credits, etc..--
    <> The Secretary shall prescribe
    rules, regulations, or guidance for the repayment of any
    assessable payment (including interest) if such payment is based
    on the allowance or payment of an applicable premium tax credit
    or cost-sharing reduction with respect to an employee, such
    allowance or payment is subsequently disallowed, and the
    assessable payment would not have been required to be made but
    for such allowance or payment.''.

    [[Page 256]]

    (b) Clerical Amendment.--The table of sections for chapter 43 of
    such Code is amended by adding at the end the following new item:

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

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

    (d) <>  Effective Date.--The amendments
    made by this section shall apply to months beginning after December 31,
    2013.

    SEC. 1514. REPORTING OF EMPLOYER HEALTH INSURANCE COVERAGE.

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

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

    ``(a) In General.--Every applicable large employer required to meet
    the requirements of section 4980H with respect to its full-time
    employees during a calendar year shall, at such time as the Secretary
    may prescribe, make a return described in subsection (b).
    ``(b) Form and Manner of Return.--A return is described in this
    subsection if such return--
    ``(1) is in such form as the Secretary may prescribe, and
    ``(2) contains--
    ``(A) the name, date, and employer identification
    number of the employer,
    ``(B) a certification as to whether the employer
    offers to its full-time employees (and their dependents)
    the opportunity to enroll in minimum essential coverage
    under an eligible employer-sponsored plan (as defined in
    section 5000A(f)(2)),
    ``(C) <>  if the employer
    certifies that the employer did offer to its full-time
    employees (and their dependents) the opportunity to so
    enroll--
    ``(i) the length of any waiting period (as
    defined in section 2701(b)(4) of the Public Health
    Service Act) with respect to such coverage,
    ``(ii) the months during the calendar year for
    which coverage under the plan was available,
    ``(iii) the monthly premium for the lowest
    cost option in each of the enrollment categories
    under the plan, and
    ``(iv) the applicable large employer's share
    of the total allowed costs of benefits provided
    under the plan,

    [[Page 257]]

    ``(D) the number of full-time employees for each
    month during the calendar year,
    ``(E) the name, address, and TIN of each full-time
    employee during the calendar year and the months (if
    any) during which such employee (and any dependents)
    were covered under any such health benefits plans, and
    ``(F) such other information as the Secretary may
    require.

    ``(c) Statements To Be Furnished to Individuals With Respect to Whom
    Information Is Reported.--
    ``(1) In general.--Every person required to make a return
    under subsection (a) shall furnish to each full-time employee
    whose name is required to be set forth in such return under
    subsection (b)(2)(E) a written statement showing--
    ``(A) the name and address of the person required to
    make such return and the phone number of the information
    contact for such person, and
    ``(B) the information required to be shown on the
    return with respect to such individual.
    ``(2) Time for furnishing statements.--The written statement
    required under paragraph (1) shall be furnished on or before
    January 31 of the year following the calendar year for which the
    return under subsection (a) was required to be made.

    ``(d) Coordination With Other Requirements.--To the maximum extent
    feasible, the Secretary may provide that--
    ``(1) any return or statement required to be provided under
    this section may be provided as part of any return or statement
    required under section 6051 or 6055, and
    ``(2) in the case of an applicable large employer offering
    health insurance coverage of a health insurance issuer, the
    employer may enter into an agreement with the issuer to include
    information required under this section with the return and
    statement required to be provided by the issuer under section
    6055.

    ``(e) Coverage Provided by Governmental Units.--In the case of any
    applicable large employer which is a governmental unit or any agency or
    instrumentality thereof, the person appropriately designated for
    purposes of this section shall make the returns and statements required
    by this section.
    ``(f) Definitions.--For purposes of this section, any term used in
    this section which is also used in section 4980H shall have the meaning
    given such term by section 4980H.''.
    (b) Assessable Penalties.--
    (1) Subparagraph (B) of section 6724(d)(1) of the Internal
    Revenue Code of 1986 (relating to definitions), as amended by
    section 1502, <>  is amended by striking
    ``or'' at the end of clause (xxiii), by striking ``and'' at the
    end of clause (xxiv) and inserting ``or'', and by inserting
    after clause (xxiv) the following new clause:
    ``(xxv) section 6056 (relating to returns
    relating to large employers required to report on
    health insurance coverage), and''.
    (2) Paragraph (2) of section 6724(d) of such Code, as so
    amended, is amended by striking ``or'' at the end of
    subparagraph (FF), by striking the period at the end of
    subparagraph

    [[Page 258]]

    (GG) and inserting ``, or'' and by inserting after subparagraph
    (GG) the following new subparagraph:
    ``(HH) section 6056(c) (relating to statements
    relating to large employers required to report on health
    insurance coverage).''.

    (c) Conforming Amendment.--The table of sections for subpart D of
    part III of subchapter A of chapter 61 of such Code, as added by section
    1502, is amended by adding at the end the following new item:

    ``Sec. 6056. Large employers required to report on health insurance
    coverage.''.

    (d) <>  Effective Date.--The amendments
    made by this section shall apply to periods beginning after December 31,
    2013.

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

    (a) In General.--Subsection (f) of section 125 of the Internal
    Revenue Code of 1986 <>  is amended by adding at the
    end the following new paragraph:
    ``(3) Certain exchange-participating qualified health plans
    not qualified.--
    ``(A) In general.--The term `qualified benefit'
    shall not include any qualified health plan (as defined
    in section 1301(a) of the Patient Protection and
    Affordable Care Act) offered through an Exchange
    established under section 1311 of such Act.
    ``(B) Exception for exchange-eligible employers.--
    Subparagraph (A) shall not apply with respect to any
    employee if such employee's employer is a qualified
    employer (as defined in section 1312(f)(2) of the
    Patient Protection and Affordable Care Act) offering the
    employee the opportunity to enroll through such an
    Exchange in a qualified health plan in a group
    market.''.

    (b) Conforming Amendments.--Subsection (f) of section 125 of such
    Code is amended--
    (1) by striking ``For purposes of this section, the term''
    and inserting ``For purposes of this section--

    ``(1) In General.--The term'', and
    (2) by striking ``Such term shall not include'' and
    inserting the following:
    ``(2) Long-term care insurance not qualified.--The term
    `qualified benefit' shall not include''.

    (c) <>  Effective Date.--The amendments made
    by this section shall apply to taxable years beginning after December
    31, 2013.

    Subtitle G--Miscellaneous Provisions

    SEC. 1551. <>  DEFINITIONS.

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

    SEC. 1552. <>  TRANSPARENCY IN GOVERNMENT.

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

    [[Page 259]]

    SEC. 1553. <>  PROHIBITION AGAINST DISCRIMINATION
    ON ASSISTED SUICIDE.

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

    (d) Administration.--The Office for Civil Rights of the Department
    of Health and Human Services is designated to receive complaints of
    discrimination based on this section.

    SEC. 1554. <>  ACCESS TO THERAPIES.

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

    [[Page 260]]

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

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

    SEC. 1556. EQUITY FOR CERTAIN ELIGIBLE SURVIVORS.

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

    SEC. 1557. <>  NONDISCRIMINATION.

    (a) In General.--Except as otherwise provided for in this title (or
    an amendment made by this title), an individual shall not, on the ground
    prohibited under title VI of the Civil Rights Act of 1964 (42 U.S.C.
    2000d et seq.), title IX of the Education Amendments of 1972 (20 U.S.C.
    1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 6101 et
    seq.), or section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794),
    be excluded from participation in, be denied the benefits of, or be
    subjected to discrimination under, any health program or activity, any
    part of which is receiving Federal financial assistance, including
    credits, subsidies, or contracts of insurance, or under any program or
    activity that is administered by an Executive Agency or any entity
    established under this title (or amendments). <>
    The enforcement mechanisms provided for and available under such title
    VI, title IX, section 504, or such Age Discrimination Act shall apply
    for purposes of violations of this subsection.

    (b) Continued Application of Laws.--Nothing in this title (or an
    amendment made by this title) shall be construed to invalidate or limit
    the rights, remedies, procedures, or legal standards available to
    individuals aggrieved under title VI of the Civil Rights Act of 1964 (42
    U.S.C. 2000d et seq.), title VII of the Civil Rights Act of 1964 (42
    U.S.C. 2000e et seq.), title IX of the Education Amendments of 1972 (20
    U.S.C. 1681 et seq.), section 504 of the Rehabilitation Act of 1973 (29
    U.S.C. 794), or the Age Discrimination Act of 1975 (42 U.S.C. 611 et
    seq.), or to supersede State laws that provide additional protections
    against discrimination on any basis described in subsection (a).
    (c) Regulations.--The Secretary may promulgate regulations to
    implement this section.

    [[Page 261]]

    SEC. 1558. PROTECTIONS FOR EMPLOYEES.

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

    ``SEC. 18C. <>  PROTECTIONS FOR EMPLOYEES.

    ``(a) Prohibition.--No employer shall discharge or in any manner
    discriminate against any employee with respect to his or her
    compensation, terms, conditions, or other privileges of employment
    because the employee (or an individual acting at the request of the
    employee) has--
    ``(1) received a credit under section 36B of the Internal
    Revenue Code of 1986 or a subsidy under section 1402 of this
    Act;
    ``(2) provided, caused to be provided, or is about to
    provide or cause to be provided to the employer, the Federal
    Government, or the attorney general of a State information
    relating to any violation of, or any act or omission the
    employee reasonably believes to be a violation of, any provision
    of this title (or an amendment made by this title);
    ``(3) testified or is about to testify in a proceeding
    concerning such violation;
    ``(4) assisted or participated, or is about to assist or
    participate, in such a proceeding; or
    ``(5) objected to, or refused to participate in, any
    activity, policy, practice, or assigned task that the employee
    (or other such person) reasonably believed to be in violation of
    any provision of this title (or amendment), or any order, rule,
    regulation, standard, or ban under this title (or amendment).

    ``(b) Complaint Procedure.--
    ``(1) In general.--An employee who believes that he or she
    has been discharged or otherwise discriminated against by any
    employer in violation of this section may seek relief in
    accordance with the procedures, notifications, burdens of proof,
    remedies, and statutes of limitation set forth in section
    2087(b) of title 15, United States Code.
    ``(2) No limitation on rights.--Nothing in this section
    shall be deemed to diminish the rights, privileges, or remedies
    of any employee under any Federal or State law or under any
    collective bargaining agreement. The rights and remedies in this
    section may not be waived by any agreement, policy, form, or
    condition of employment.''.

    SEC. 1559. <>  OVERSIGHT.

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

    SEC. 1560. <>  RULES OF CONSTRUCTION.

    (a) No Effect on Antitrust Laws.--Nothing in this title (or an
    amendment made by this title) shall be construed to modify, impair, or
    supersede the operation of any of the antitrust laws. For the purposes
    of this section, the term ``antitrust laws'' has the meaning given such
    term in subsection (a) of the first section of the Clayton Act, except
    that such term includes section 5 of the Federal Trade Commission Act to
    the extent that such section 5 applies to unfair methods of competition.

    [[Page 262]]

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

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

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

    ``Subtitle C--Other Provisions

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

    ``(a) In General.--
    ``(1) Standards and protocols.--
    <> Not later than 180 days after
    the date of enactment of this title, the Secretary, in
    consultation with the HIT Policy Committee and the HIT Standards
    Committee, shall develop interoperable and secure standards and
    protocols that facilitate enrollment of individuals in Federal
    and State health and human services programs, as determined by
    the Secretary.
    ``(2) Methods.--The Secretary shall facilitate enrollment in
    such programs through methods determined appropriate by the
    Secretary, which shall include providing individuals and third
    parties authorized by such individuals and their designees
    notification of eligibility and verification of eligibility
    required under such programs.

    ``(b) Content.--The standards and protocols for electronic
    enrollment in the Federal and State programs described in subsection (a)
    shall allow for the following:
    ``(1) Electronic matching against existing Federal and State
    data, including vital records, employment history, enrollment
    systems, tax records, and other data determined appropriate by
    the Secretary to serve as evidence of eligibility and in lieu of
    paper-based documentation.
    ``(2) Simplification and submission of electronic
    documentation, digitization of documents, and systems
    verification of eligibility.
    ``(3) Reuse of stored eligibility information (including
    documentation) to assist with retention of eligible individuals.

    [[Page 263]]

    ``(4) Capability for individuals to apply, recertify and
    manage their eligibility information online, including at home,
    at points of service, and other community-based locations.
    ``(5) Ability to expand the enrollment system to integrate
    new programs, rules, and functionalities, to operate at
    increased volume, and to apply streamlined verification and
    eligibility processes to other Federal and State programs, as
    appropriate.
    ``(6) Notification of eligibility, recertification, and
    other needed communication regarding eligibility, which may
    include communication via email and cellular phones.
    ``(7) Other functionalities necessary to provide eligibles
    with streamlined enrollment process.

    ``(c) Approval and Notification.--With respect to any standard or
    protocol developed under subsection (a) that has been approved by the
    HIT Policy Committee and the HIT Standards Committee, the Secretary--
    ``(1) shall notify States of such standards or protocols;
    and
    ``(2) may require, as a condition of receiving Federal funds
    for the health information technology investments, that States
    or other entities incorporate such standards and protocols into
    such investments.

    ``(d) Grants for Implementation of Appropriate Enrollment HIT.--
    ``(1) In general.--The Secretary shall award grant to
    eligible entities to develop new, and adapt existing, technology
    systems to implement the HIT enrollment standards and protocols
    developed under subsection (a) (referred to in this subsection
    as `appropriate HIT technology').
    ``(2) Eligible entities.--To be eligible for a grant under
    this subsection, an entity shall--
    ``(A) be a State, political subdivision of a State,
    or a local governmental entity; and
    ``(B) submit to the Secretary an application at such
    time, in such manner, and containing--
    ``(i) a plan to adopt and implement
    appropriate enrollment technology that includes--
    ``(I) proposed reduction in
    maintenance costs of technology systems;
    ``(II) elimination or updating of
    legacy systems; and
    ``(III) demonstrated collaboration
    with other entities that may receive a
    grant under this section that are
    located in the same State, political
    subdivision, or locality;
    ``(ii) an assurance that the entity will share
    such appropriate enrollment technology in
    accordance with paragraph (4); and
    ``(iii) such other information as the
    Secretary may require.
    ``(3) Sharing.--
    ``(A) In general.--The Secretary shall ensure that
    appropriate enrollment HIT adopted under grants under
    this subsection is made available to other qualified
    State, qualified political subdivisions of a State, or
    other appropriate qualified entities (as described in
    subparagraph (B)) at no cost.

    [[Page 264]]

    ``(B) Qualified entities.--The Secretary shall
    determine what entities are qualified to receive
    enrollment HIT under subparagraph (A), taking into
    consideration the recommendations of the HIT Policy
    Committee and the HIT Standards Committee.''.

    SEC. 1562. CONFORMING AMENDMENTS.

    (a) Applicability.--Section 2735 of the Public Health Service Act
    (42 U.S.C. 300gg-21), as so redesignated by section 1001(4), is
    amended--
    (1) by striking subsection (a);
    (2) in subsection (b)--
    (A) in paragraph (1), by striking ``1 through 3''
    and inserting ``1 and 2''; and
    (B) in paragraph (2)--
    (i) in subparagraph (A), by striking
    ``subparagraph (D)'' and inserting ``subparagraph
    (D) or (E)'';
    (ii) by striking ``1 through 3'' and inserting
    ``1 and 2''; and
    (iii) by adding at the end the following:
    ``(E) Election not applicable.--The election
    described in subparagraph (A) shall not be available
    with respect to the provisions of subpart 1.'';
    (3) in subsection (c), by striking ``1 through 3 shall not
    apply to any group'' and inserting ``1 and 2 shall not apply to
    any individual coverage or any group''; and
    (4) in subsection (d)--
    (A) in paragraph (1), by striking ``1 through 3
    shall not apply to any group'' and inserting ``1 and 2
    shall not apply to any individual coverage or any
    group'';
    (B) in paragraph (2)--
    (i) in the matter preceding subparagraph (A),
    by striking ``1 through 3 shall not apply to any
    group'' and inserting ``1 and 2 shall not apply to
    any individual coverage or any group''; and
    (ii) in subparagraph (C), by inserting ``or,
    with respect to individual coverage, under any
    health insurance coverage maintained by the same
    health insurance issuer''; and
    (C) in paragraph (3), by striking ``any group'' and
    inserting ``any individual coverage or any group''.

    (b) Definitions.--Section 2791(d) of the Public Health Service Act
    (42 U.S.C. 300gg-91(d)) is amended by adding at the end the following:
    ``(20) Qualified health plan.--The term `qualified health
    plan' has the meaning given such term in section 1301(a) of the
    Patient Protection and Affordable Care Act.
    ``(21) Exchange.--The term `Exchange' means an American
    Health Benefit Exchange established under section 1311 of the
    Patient Protection and Affordable Care Act.''.

    (c) Technical and Conforming Amendments.--Title XXVII of the Public
    Health Service Act (42 U.S.C. 300gg et seq.) is amended--
    (1) in section 2704 <> (42 U.S.C.
    300gg), as so redesignated by section 1201(2)--
    (A) in subsection (c)--

    [[Page 265]]

    (i) in paragraph (2), by striking ``group
    health plan'' each place that such term appears
    and inserting ``group or individual health plan'';
    and
    (ii) in paragraph (3)--
    (I) by striking ``group health
    insurance'' each place that such term
    appears and inserting ``group or
    individual health insurance''; and
    (II) in subparagraph (D), by
    striking ``small or large'' and
    inserting ``individual or group'';
    (B) in subsection (d), by striking ``group health
    insurance'' each place that such term appears and
    inserting ``group or individual health insurance''; and
    (C) in subsection (e)(1)(A), by striking ``group
    health insurance'' and inserting ``group or individual
    health insurance'';
    (2) by striking the second heading for subpart 2 of part A
    (relating to other requirements);
    (3) in section 2725 <>  (42 U.S.C.
    300gg-4), as so redesignated by section 1001(2)--
    (A) in subsection (a), by striking ``health
    insurance issuer offering group health insurance
    coverage'' and inserting ``health insurance issuer
    offering group or individual health insurance
    coverage'';
    (B) in subsection (b)--
    (i) by striking ``health insurance issuer
    offering group health insurance coverage in
    connection with a group health plan'' in the
    matter preceding paragraph (1) and inserting
    ``health insurance issuer offering group or
    individual health insurance coverage''; and
    (ii) in paragraph (1), by striking ``plan''
    and inserting ``plan or coverage'';
    (C) in subsection (c)--
    (i) in paragraph (2), by striking ``group
    health insurance coverage offered by a health
    insurance issuer'' and inserting ``health
    insurance issuer offering group or individual
    health insurance coverage''; and
    (ii) in paragraph (3), by striking ``issuer''
    and inserting ``health insurance issuer''; and
    (D) in subsection (e), by striking ``health
    insurance issuer offering group health insurance
    coverage'' and inserting ``health insurance issuer
    offering group or individual health insurance
    coverage'';
    (4) in section 2726 <>  (42 U.S.C.
    300gg-5), as so redesignated by section 1001(2)--
    (A) in subsection (a), by striking ``(or health
    insurance coverage offered in connection with such a
    plan)'' each place that such term appears and inserting
    ``or a health insurance issuer offering group or
    individual health insurance coverage'';
    (B) in subsection (b), by striking ``(or health
    insurance coverage offered in connection with such a
    plan)'' each place that such term appears and inserting
    ``or a health insurance issuer offering group or
    individual health insurance coverage''; and
    (C) in subsection (c)--

    [[Page 266]]

    (i) in paragraph (1), by striking ``(and group
    health insurance coverage offered in connection
    with a group health plan)'' and inserting ``and a
    health insurance issuer offering group or
    individual health insurance coverage'';
    (ii) in paragraph (2), by striking ``(or
    health insurance coverage offered in connection
    with such a plan)'' each place that such term
    appears and inserting ``or a health insurance
    issuer offering group or individual health
    insurance coverage'';
    (5) in section 2727 <> (42 U.S.C.
    300gg-6), as so redesignated by section 1001(2), by striking
    ``health insurance issuers providing health insurance coverage
    in connection with group health plans'' and inserting ``and
    health insurance issuers offering group or individual health
    insurance coverage'';
    (6) in section 2728 <> (42 U.S.C.
    300gg-7), as so redesignated by section 1001(2)--
    (A) in subsection (a), by striking ``health
    insurance coverage offered in connection with such
    plan'' and inserting ``individual health insurance
    coverage'';
    (B) in subsection (b)--
    (i) in paragraph (1), by striking ``or a
    health insurance issuer that provides health
    insurance coverage in connection with a group
    health plan'' and inserting ``or a health
    insurance issuer that offers group or individual
    health insurance coverage'';
    (ii) in paragraph (2), by striking ``health
    insurance coverage offered in connection with the
    plan'' and inserting ``individual health insurance
    coverage''; and
    (iii) in paragraph (3), by striking ``health
    insurance coverage offered by an issuer in
    connection with such plan'' and inserting
    ``individual health insurance coverage'';
    (C) in subsection (c), by striking ``health
    insurance issuer providing health insurance coverage in
    connection with a group health plan'' and inserting
    ``health insurance issuer that offers group or
    individual health insurance coverage''; and
    (D) in subsection (e)(1), by striking ``health
    insurance coverage offered in connection with such a
    plan'' and inserting ``individual health insurance
    coverage'';
    (7) by striking the heading for subpart 3;
    (8) in section 2731 <> (42 U.S.C.
    300gg-11), as so redesignated by section 1001(3)--
    (A) by striking the section heading and all that
    follows through subsection (b);
    (B) in subsection (c)--
    (i) in paragraph (1)--
    (I) in the matter preceding
    subparagraph (A), by striking ``small
    group'' and inserting ``group and
    individual''; and
    (II) in subparagraph (B)--
    (aa) in the matter preceding
    clause (i), by inserting ``and
    individuals'' after
    ``employers'';

    [[Page 267]]

    (bb) in clause (i), by
    inserting ``or any additional
    individuals'' after ``additional
    groups''; and
    (cc) in clause (ii), by
    striking ``without regard to the
    claims experience of those
    employers and their employees
    (and their dependents) or any
    health status-related factor
    relating to such'' and inserting
    ``and individuals without regard
    to the claims experience of
    those individuals, employers and
    their employees (and their
    dependents) or any health
    status-related factor relating
    to such individuals''; and
    (ii) in paragraph (2), by striking ``small
    group'' and inserting ``group or individual'';
    (C) in subsection (d)--
    (i) by striking ``small group'' each place
    that such appears and inserting ``group or
    individual''; and
    (ii) in paragraph (1)(B)--
    (I) by striking ``all employers''
    and inserting ``all employers and
    individuals'';
    (II) by striking ``those employers''
    and inserting ``those individuals,
    employers''; and
    (III) by striking ``such employees''
    and inserting ``such individuals,
    employees'';
    (D) by striking subsection (e);
    (E) by striking subsection (f); and
    (F) by transferring such section (as amended by this
    paragraph) to appear at the end of section 2702 (as
    added by section 1001(4));
    (9) in section 2732 <> (42 U.S.C.
    300gg-12), as so redesignated by section 1001(3)--
    (A) by striking the section heading and all that
    follows through subsection (a);
    (B) in subsection (b)--
    (i) in the matter preceding paragraph (1), by
    striking ``group health plan in the small or large
    group market'' and inserting ``health insurance
    coverage offered in the group or individual
    market'';
    (ii) in paragraph (1), by inserting ``, or
    individual, as applicable,'' after ``plan
    sponsor'';
    (iii) in paragraph (2), by inserting ``, or
    individual, as applicable,'' after ``plan
    sponsor''; and
    (iv) by striking paragraph (3) and inserting
    the following:
    ``(3) Violation of participation or contribution rates.--In
    the case of a group health plan, the plan sponsor has failed to
    comply with a material plan provision relating to employer
    contribution or group participation rules, pursuant to
    applicable State law.'';
    (C) in subsection (c)--
    (i) in paragraph (1)--
    (I) in the matter preceding
    subparagraph (A), by striking ``group
    health insurance coverage offered in the
    small or large group market'' and
    inserting ``group or individual health
    insurance coverage'';

    [[Page 268]]

    (II) in subparagraph (A), by
    inserting ``or individual, as
    applicable,'' after ``plan sponsor'';
    (III) in subparagraph (B)--
    (aa) by inserting ``or
    individual, as applicable,''
    after ``plan sponsor''; and
    (bb) by inserting ``or
    individual health insurance
    coverage''; and
    (IV) in subparagraph (C), by
    inserting ``or individuals, as
    applicable,'' after ``those sponsors'';
    and
    (ii) in paragraph (2)(A)--
    (I) in the matter preceding clause
    (i), by striking ``small group market or
    the large group market, or both
    markets,'' and inserting ``individual or
    group market, or all markets,''; and
    (II) in clause (i), by inserting
    ``or individual, as applicable,'' after
    ``plan sponsor''; and
    (D) by transferring such section (as amended by this
    paragraph) to appear at the end of section 2703 (as
    added by section 1001(4));
    (10) in section 2733 <>  (42 U.S.C.
    300gg-13), as so redesignated by section 1001(4)--
    (A) in subsection (a)--
    (i) in the matter preceding paragraph (1), by
    striking ``small employer'' and inserting ``small
    employer or an individual'';
    (ii) in paragraph (1), by inserting ``, or
    individual, as applicable,'' after ``employer''
    each place that such appears; and
    (iii) in paragraph (2), by striking ``small
    employer'' and inserting ``employer, or
    individual, as applicable,'';
    (B) in subsection (b)--
    (i) in paragraph (1)--
    (I) in the matter preceding
    subparagraph (A), by striking ``small
    employer'' and inserting ``employer, or
    individual, as applicable,'';
    (II) in subparagraph (A), by adding
    ``and'' at the end;
    (III) by striking subparagraphs (B)
    and (C); and
    (IV) in subparagraph (D)--
    (aa) by inserting ``, or
    individual, as applicable,''
    after ``employer''; and
    (bb) by redesignating such
    subparagraph as subparagraph
    (B);
    (ii) in paragraph (2)--
    (I) by striking ``small employers''
    each place that such term appears and
    inserting ``employers, or individuals,
    as applicable,''; and
    (II) by striking ``small employer''
    and inserting ``employer, or individual,
    as applicable,''; and
    (C) by redesignating such section (as amended by
    this paragraph) as section 2709 and transferring such
    section to appear after section 2708 (as added by
    section 1001(5));
    (11) by redesignating subpart 4 as subpart 2;
    (12) in section 2735 (42 U.S.C. 300gg-21), as so
    redesignated by section 1001(4)--

    [[Page 269]]

    (A) by striking subsection (a);
    (B) by striking ``subparts 1 through 3'' each place
    that such appears and inserting ``subpart 1'';
    (C) by redesignating subsections (b) through (e) as
    subsections (a) through (d), respectively; and
    (D) by redesignating such section (as amended by
    this paragraph) <>  as section
    2722;
    (13) in section 2736 (42 U.S.C. 300gg-22), as so
    redesignated by section 1001(4)--
    (A) in subsection (a)--
    (i) in paragraph (1), by striking ``small or
    large group markets'' and inserting ``individual
    or group market''; and
    (ii) in paragraph (2), by inserting ``or
    individual health insurance coverage'' after
    ``group health plans'';
    (B) in subsection (b)(1)(B), by inserting
    ``individual health insurance coverage or'' after
    ``respect to''; and
    (C) by redesignating such section (as amended by
    this paragraph) <>  as section
    2723;
    (14) in section 2737(a)(1) (42 U.S.C. 300gg-23), as so
    redesignated by section 1001(4)--
    (A) by inserting ``individual or'' before ``group
    health insurance''; and
    (B) by redesignating such section(as amended by this
    paragraph) <>  as section 2724;
    (15) in section 2762 (42 U.S.C. 300gg-62)--
    (A) in the section heading by inserting ``and
    application'' before the period; and
    (B) by adding at the end the following:

    ``(c) Application of Part A Provisions.--
    ``(1) In general.--The provisions of part A shall apply to
    health insurance issuers providing health insurance coverage in
    the individual market in a State as provided for in such part.
    ``(2) Clarification.--To the extent that any provision of
    this part conflicts with a provision of part A with respect to
    health insurance issuers providing health insurance coverage in
    the individual market in a State, the provisions of such part A
    shall apply.''; and
    (16) in section 2791(e) (42 U.S.C. 300gg-91(e))--
    (A) in paragraph (2), by striking ``51'' and
    inserting ``101''; and
    (B) in paragraph (4)--
    (i) by striking ``at least 2'' each place that
    such appears and inserting ``at least 1''; and
    (ii) by striking ``50'' and inserting ``100''.

    (d) <>  Application.--Notwithstanding any other
    provision of the Patient Protection and Affordable Care Act, nothing in
    such Act (or an amendment made by such Act) shall be construed to--
    (1) prohibit (or authorize the Secretary of Health and Human
    Services to promulgate regulations that prohibit) a group health
    plan or health insurance issuer from carrying out utilization
    management techniques that are commonly used as of the date of
    enactment of this Act; or
    (2) restrict the application of the amendments made by this
    subtitle.

    [[Page 270]]

    (e) Technical Amendment to the Employee Retirement Income Security
    Act of 1974.--Subpart B of part 7 of subtitle A of title I of the
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et.
    seq.) is amended, by adding at the end the following:

    ``SEC. 715. <> ADDITIONAL MARKET
    REFORMS.

    ``(a) General Rule.--Except as provided in subsection (b)--
    ``(1) the provisions of part A of title XXVII of the Public
    Health Service Act (as amended by the Patient Protection and
    Affordable Care Act) shall apply to group health plans, and
    health insurance issuers providing health insurance coverage in
    connection with group health plans, as if included in this
    subpart; and
    ``(2) to the extent that any provision of this part
    conflicts with a provision of such part A with respect to group
    health plans, or health insurance issuers providing health
    insurance coverage in connection with group health plans, the
    provisions of such part A shall apply.

    ``(b) Exception.--Notwithstanding subsection (a), the provisions of
    sections 2716 and 2718 of title XXVII of the Public Health Service Act
    (as amended by the Patient Protection and Affordable Care Act) shall not
    apply with respect to self-insured group health plans, and the
    provisions of this part shall continue to apply to such plans as if such
    sections of the Public Health Service Act (as so amended) had not been
    enacted.''.
    (f) Technical Amendment to the Internal Revenue Code of 1986.--
    Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is
    amended by adding at the end the following:

    ``SEC. 9815. <> ADDITIONAL MARKET
    REFORMS.

    ``(a) General Rule.--Except as provided in subsection (b)--
    ``(1) the provisions of part A of title XXVII of the Public
    Health Service Act (as amended by the Patient Protection and
    Affordable Care Act) shall apply to group health plans, and
    health insurance issuers providing health insurance coverage in
    connection with group health plans, as if included in this
    subchapter; and
    ``(2) to the extent that any provision of this subchapter
    conflicts with a provision of such part A with respect to group
    health plans, or health insurance issuers providing health
    insurance coverage in connection with group health plans, the
    provisions of such part A shall apply.

    ``(b) Exception.--Notwithstanding subsection (a), the provisions of
    sections 2716 and 2718 of title XXVII of the Public Health Service Act
    (as amended by the Patient Protection and Affordable Care Act) shall not
    apply with respect to self-insured group health plans, and the
    provisions of this subchapter shall continue to apply to such plans as
    if such sections of the Public Health Service Act (as so amended) had
    not been enacted.''.

    SEC. 1563. SENSE OF THE SENATE PROMOTING FISCAL RESPONSIBILITY.

    (a) Findings.--The Senate makes the following findings:
    (1) Based on Congressional Budget Office (CBO) estimates,
    this Act will reduce the Federal deficit between 2010 and 2019.
    (2) CBO projects this Act will continue to reduce budget
    deficits after 2019.

    [[Page 271]]

    (3) Based on CBO estimates, this Act will extend the
    solvency of the Medicare HI Trust Fund.
    (4) This Act will increase the surplus in the Social
    Security Trust Fund, which should be reserved to strengthen the
    finances of Social Security.
    (5) The initial net savings generated by the Community
    Living Assistance Services and Supports (CLASS) program are
    necessary to ensure the long-term solvency of that program.

    (b) Sense of the Senate.--It is the sense of the Senate that--
    (1) the additional surplus in the Social Security Trust Fund
    generated by this Act should be reserved for Social Security and
    not spent in this Act for other purposes; and
    (2) the net savings generated by the CLASS program should be
    reserved for the CLASS program and not spent in this Act for
    other purposes.

    TITLE II--ROLE OF PUBLIC PROGRAMS

    Subtitle A--Improved Access to Medicaid

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

    (a) Coverage for Individuals With Income at or Below 133 Percent of
    the Poverty Line.--
    (1) Beginning 2014.-- <> Section
    1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 1396a)
    is amended--
    (A) by striking ``or'' at the end of subclause (VI);
    (B) by adding ``or'' at the end of subclause (VII);
    and
    (C) by inserting after subclause (VII) the
    following:
    ``(VIII) beginning January 1, 2014,
    who are under 65 years of age, not
    pregnant, not entitled to, or enrolled
    for, benefits under part A of title
    XVIII, or enrolled for benefits under
    part B of title XVIII, and are not
    described in a previous subclause of
    this clause, and whose income (as
    determined under subsection (e)(14))
    does not exceed 133 percent of the
    poverty line (as defined in section
    2110(c)(5)) applicable to a family of
    the size involved, subject to subsection
    (k);''.
    (2) Provision of at least minimum essential coverage.--
    (A) In general.--Section 1902 of such Act (42 U.S.C.
    1396a) is amended by inserting after subsection (j) the
    following:

    ``(k)(1) The medical assistance provided to an individual described
    in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of
    benchmark coverage described in section 1937(b)(1) or benchmark
    equivalent coverage described in section 1937(b)(2). Such medical
    assistance shall be provided subject to the requirements of section
    1937, without regard to whether a State otherwise has elected the option
    to provide medical assistance through coverage under that section,
    unless an individual described in subclause (VIII) of subsection
    (a)(10)(A)(i) is also an individual for whom, under subparagraph (B) of
    section 1937(a)(2), the State may not require enrollment in benchmark
    coverage described in subsection (b)(1)

    [[Page 272]]

    of section 1937 or benchmark equivalent coverage described in subsection
    (b)(2) of that section.''.
    (B) Conforming amendment.--Section 1903(i) of the
    Social Security Act, as amended by section
    6402(c), <>  is amended--
    (i) in paragraph (24), by striking ``or'' at
    the end;
    (ii) in paragraph (25), by striking the period
    and inserting ``; or''; and
    (iii) by adding at the end the following:
    ``(26) with respect to any amounts expended for medical
    assistance for individuals described in subclause (VIII) of
    subsection (a)(10)(A)(i) other than medical assistance provided
    through benchmark coverage described in section 1937(b)(1) or
    benchmark equivalent coverage described in section
    1937(b)(2).''.
    (3) Federal funding for cost of covering newly eligible
    individuals.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), is amended--
    (A) in subsection (b), in the first sentence, by
    inserting ``subsection (y) and'' before ``section
    1933(d)''; and
    (B) by adding at the end the following new
    subsection:

    ``(y) Increased FMAP for Medical Assistance for Newly Eligible
    Mandatory Individuals.--
    ``(1) <>  Amount of increase.--
    ``(A) 100 percent fmap.--During the period that
    begins on January 1, 2014, and ends on December 31,
    2016, notwithstanding subsection (b), the Federal
    medical assistance percentage determined for a State
    that is one of the 50 States or the District of Columbia
    for each fiscal year occurring during that period with
    respect to amounts expended for medical assistance for
    newly eligible individuals described in subclause (VIII)
    of section 1902(a)(10)(A)(i) shall be equal to 100
    percent.
    ``(B) 2017 and 2018.--
    ``(i) In general.--During the period that
    begins on January 1, 2017, and ends on December
    31, 2018, notwithstanding subsection (b) and
    subject to subparagraph (D), the Federal medical
    assistance percentage determined for a State that
    is one of the 50 States or the District of
    Columbia for each fiscal year occurring during
    that period with respect to amounts expended for
    medical assistance for newly eligible individuals
    described in subclause (VIII) of section
    1902(a)(10)(A)(i), shall be increased by the
    applicable percentage point increase specified in
    clause (ii) for the quarter and the State.
    ``(ii) Applicable percentage point increase.--
    ``(I) In general.--For purposes of
    clause (i), the applicable percentage
    point increase for a quarter is the
    following:

    [[Page 273]]

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

    ``(II) Expansion state defined.--For
    purposes of the table in subclause (I),
    a State is an expansion State if, on the
    date of the enactment of the Patient
    Protection and Affordable Care Act, the
    State offers health benefits coverage
    statewide to parents and nonpregnant,
    childless adults whose income is at
    least 100 percent of the poverty line,
    that is not dependent on access to
    employer coverage, employer
    contribution, or employment and is not
    limited to premium assistance, hospital-
    only benefits, a high deductible health
    plan, or alternative benefits under a
    demonstration program authorized under
    section 1938. A State that offers health
    benefits coverage to only parents or
    only nonpregnant childless adults
    described in the preceding sentence
    shall not be considered to be an
    expansion State.
    ``(C) 2019 and succeeding years. <> --Beginning January 1, 2019, notwithstanding
    subsection (b) but subject to subparagraph (D), the
    Federal medical assistance percentage determined for a
    State that is one of the 50 States or the District of
    Columbia for each fiscal year quarter occurring during
    that period with respect to amounts expended for medical
    assistance for newly eligible individuals described in
    subclause (VIII) of section 1902(a)(10)(A)(i), shall be
    increased by 32.3 percentage points.
    ``(D) Limitation.--The Federal medical assistance
    percentage determined for a State under subparagraph (B)
    or (C) shall in no case be more than 95 percent.
    ``(2) Definitions.--In this subsection:
    ``(A) Newly eligible.--The term `newly eligible'
    means, with respect to an individual described in
    subclause (VIII) of section 1902(a)(10)(A)(i), an
    individual who is not under 19 years of age (or such
    higher age as the State may have elected) and who, on
    the date of enactment of the Patient Protection and
    Affordable Care Act, is not eligible under the State
    plan or under a waiver of the plan for full benefits or
    for benchmark coverage described in subparagraph (A),
    (B), or (C) of section 1937(b)(1) or benchmark
    equivalent coverage described in section 1937(b)(2) that
    has an aggregate actuarial value that is at least
    actuarially equivalent to benchmark coverage described
    in subparagraph (A), (B), or (C) of section 1937(b)(1),
    or is eligible but not enrolled (or is on a waiting
    list) for such benefits or coverage through a waiver
    under the plan that has a capped or limited enrollment
    that is full.

    [[Page 274]]

    ``(B) Full benefits.--The term `full benefits'
    means, with respect to an individual, medical assistance
    for all services covered under the State plan under this
    title that is not less in amount, duration, or scope, or
    is determined by the Secretary to be substantially
    equivalent, to the medical assistance available for an
    individual described in section 1902(a)(10)(A)(i).''.
    (4) State options to offer coverage earlier and presumptive
    eligibility; children required to have coverage for parents to
    be eligible.--
    (A) In general.--Subsection (k) of section 1902 of
    the Social Security Act (as added by paragraph
    (2)), <>  is amended by inserting
    after paragraph (1) the following:

    ``(2) <>  Beginning with the
    first day of any fiscal year quarter that begins on or after January 1,
    2011, and before January 1, 2014, a State may elect through a State plan
    amendment to provide medical assistance to individuals who would be
    described in subclause (VIII) of subsection (a)(10)(A)(i) if that
    subclause were effective before January 1, 2014. A State may elect to
    phase-in the extension of eligibility for medical assistance to such
    individuals based on income, so long as the State does not extend such
    eligibility to individuals described in such subclause with higher
    income before making individuals described in such subclause with lower
    income eligible for medical assistance.

    ``(3) If an individual described in subclause (VIII) of subsection
    (a)(10)(A)(i) is the parent of a child who is under 19 years of age (or
    such higher age as the State may have elected) who is eligible for
    medical assistance under the State plan or under a waiver of such plan
    (under that subclause or under a State plan amendment under paragraph
    (2), the individual may not be enrolled under the State plan unless the
    individual's child is enrolled under the State plan or under a waiver of
    the plan or is enrolled in other health insurance coverage. For purposes
    of the preceding sentence, the term `parent' includes an individual
    treated as a caretaker relative for purposes of carrying out section
    1931.''.
    (B) Presumptive eligibility.--Section 1920 of the
    Social Security Act (42 U.S.C. 1396r-1) is amended by
    adding at the end the following:

    ``(e) <>  If the State has elected the option to
    provide a presumptive eligibility period under this section or section
    1920A, the State may elect to provide a presumptive eligibility period
    (as defined in subsection (b)(1)) for individuals who are eligible for
    medical assistance under clause (i)(VIII) of subsection (a)(10)(A) or
    section 1931 in the same manner as the State provides for such a period
    under this section or section 1920A, subject to such guidance as the
    Secretary shall establish.''.
    (5) Conforming amendments.--
    (A) Section 1902(a)(10) of such Act (42 U.S.C.
    1396a(a)(10)) is amended in the matter following
    subparagraph (G), by striking ``and (XIV)'' and
    inserting ``(XIV)'' and by inserting ``and (XV) the
    medical assistance made available to an individual
    described in subparagraph (A)(i)(VIII) shall be limited
    to medical assistance described in subsection (k)(1)''
    before the semicolon.
    (B) Section 1902(l)(2)(C) of such Act (42 U.S.C.
    1396a(l)(2)(C)) is amended by striking ``100'' and
    inserting ``133''.

    [[Page 275]]

    (C) Section 1905(a) of such Act (42 U.S.C. 1396d(a))
    is amended in the matter preceding paragraph (1)--
    (i) by striking ``or'' at the end of clause
    (xii);
    (ii) by inserting ``or'' at the end of clause
    (xiii); and
    (iii) by inserting after clause (xiii) the
    following:
    ``(xiv) individuals described in section
    1902(a)(10)(A)(i)(VIII),''.
    (D) Section 1903(f)(4) of such Act (42 U.S.C.
    1396b(f)(4)) is amended by inserting
    ``1902(a)(10)(A)(i)(VIII),'' after
    ``1902(a)(10)(A)(i)(VII),''.
    (E) Section 1937(a)(1)(B) of such Act (42 U.S.C.
    1396u-7(a)(1)(B)) is amended by inserting ``subclause
    (VIII) of section 1902(a)(10)(A)(i) or under'' after
    ``eligible under''.

    (b) Maintenance of Medicaid Income Eligibility.--Section 1902 of the
    Social Security Act (42 U.S.C. 1396a) is amended--
    (1) in subsection (a)--
    (A) by striking ``and'' at the end of paragraph
    (72);
    (B) by striking the period at the end of paragraph
    (73) and inserting ``; and''; and
    (C) by inserting after paragraph (73) the following
    new paragraph:
    ``(74) provide for maintenance of effort under the State
    plan or under any waiver of the plan in accordance with
    subsection (gg).''; and
    (2) by adding at the end the following new subsection:

    ``(gg) Maintenance of Effort.--
    ``(1) General requirement to maintain eligibility standards
    until state exchange is fully operational.--Subject <>  to the succeeding paragraphs of this
    subsection, during the period that begins on the date of
    enactment of the Patient Protection and Affordable Care Act and
    ends on the date on which the Secretary determines that an
    Exchange established by the State under section 1311 of the
    Patient Protection and Affordable Care Act is fully operational,
    as a condition for receiving any Federal payments under section
    1903(a) for calendar quarters occurring during such period, a
    State shall not have in effect eligibility standards,
    methodologies, or procedures under the State plan under this
    title or under any waiver of such plan that is in effect during
    that period, that are more restrictive than the eligibility
    standards, methodologies, or procedures, respectively, under the
    plan or waiver that are in effect on the date of enactment of
    the Patient Protection and Affordable Care Act.
    ``(2) Continuation of eligibility standards for children
    until october 1, 2019.-- <> The
    requirement under paragraph (1) shall continue to apply to a
    State through September 30, 2019, with respect to the
    eligibility standards, methodologies, and procedures under the
    State plan under this title or under any waiver of such plan
    that are applicable to determining the eligibility for medical
    assistance of any child who is under 19 years of age (or such
    higher age as the State may have elected).
    ``(3) Nonapplication.-- <> During the period that begins
    on January 1, 2011, and ends on December 31, 2013, the
    requirement under paragraph (1) shall not apply to a State with
    respect to nonpregnant, nondisabled adults who are eligible

    [[Page 276]]

    for medical assistance under the State plan or under a waiver of
    the plan at the option of the State and whose income exceeds 133
    percent of the poverty line (as defined in section 2110(c)(5))
    applicable to a family of the size involved if, on or after
    December 31, 2010, the State certifies to the Secretary that,
    with respect to the State fiscal year during which the
    certification is made, the State has a budget deficit, or with
    respect to the succeeding State fiscal year, the State is
    projected to have a budget deficit. Upon submission of such a
    certification to the Secretary, the requirement under paragraph
    (1) shall not apply to the State with respect to any remaining
    portion of the period described in the preceding sentence.
    ``(4) Determination of compliance.--
    ``(A) States shall apply modified gross income.--A
    State's determination of income in accordance with
    subsection (e)(14) shall not be considered to be
    eligibility standards, methodologies, or procedures that
    are more restrictive than the standards, methodologies,
    or procedures in effect under the State plan or under a
    waiver of the plan on the date of enactment of the
    Patient Protection and Affordable Care Act for purposes
    of determining compliance with the requirements of
    paragraph (1), (2), or (3).
    ``(B) States may expand eligibility or move waivered
    populations into coverage under the state plan.--With
    respect to any period applicable under paragraph (1),
    (2), or (3), a State that applies eligibility standards,
    methodologies, or procedures under the State plan under
    this title or under any waiver of the plan that are less
    restrictive than the eligibility standards,
    methodologies, or procedures, applied under the State
    plan or under a waiver of the plan on the date of
    enactment of the Patient Protection and Affordable Care
    Act, or that makes individuals who, on such date of
    enactment, are eligible for medical assistance under a
    waiver of the State plan, after such date of enactment
    eligible for medical assistance through a State plan
    amendment with an income eligibility level that is not
    less than the income eligibility level that applied
    under the waiver, or as a result of the application of
    subclause (VIII) of section 1902(a)(10)(A)(i), shall not
    be considered to have in effect eligibility standards,
    methodologies, or procedures that are more restrictive
    than the standards, methodologies, or procedures in
    effect under the State plan or under a waiver of the
    plan on the date of enactment of the Patient Protection
    and Affordable Care Act for purposes of determining
    compliance with the requirements of paragraph (1), (2),
    or (3).''.

    (c) Medicaid Benchmark Benefits Must Consist of at Least Minimum
    Essential Coverage.--Section 1937(b) of such Act (42 U.S.C. 1396u-7(b))
    is amended--
    (1) in paragraph (1), in the matter preceding subparagraph
    (A), by inserting ``subject to paragraphs (5) and (6),'' before
    ``each'';
    (2) in paragraph (2)--
    (A) in the matter preceding subparagraph (A), by
    inserting ``subject to paragraphs (5) and (6)'' after
    ``subsection (a)(1),'';

    [[Page 277]]

    (B) in subparagraph (A)--
    (i) by redesignating clauses (iv) and (v) as
    clauses (vi) and (vii), respectively; and
    (ii) by inserting after clause (iii), the
    following:
    ``(iv) Coverage of prescription drugs.
    ``(v) Mental health services.''; and
    (C) in subparagraph (C)--
    (i) by striking clauses (i) and (ii); and
    (ii) by redesignating clauses (iii) and (iv)
    as clauses (i) and (ii), respectively; and
    (3) by adding at the end the following new paragraphs:
    ``(5) Minimum standards.-- <> Effective January 1, 2014, any benchmark benefit package
    under paragraph (1) or benchmark equivalent coverage under
    paragraph (2) must provide at least essential health benefits as
    described in section 1302(b) of the Patient Protection and
    Affordable Care Act.
    ``(6) Mental health services parity.--
    ``(A) In general.--In the case of any benchmark
    benefit package under paragraph (1) or benchmark
    equivalent coverage under paragraph (2) that is offered
    by an entity that is not a medicaid managed care
    organization and that provides both medical and surgical
    benefits and mental health or substance use disorder
    benefits, the entity shall ensure that the financial
    requirements and treatment limitations applicable to
    such mental health or substance use disorder benefits
    comply with the requirements of section 2705(a) of the
    Public Health Service Act in the same manner as such
    requirements apply to a group health plan.
    ``(B) Deemed compliance.--Coverage provided with
    respect to an individual described in section
    1905(a)(4)(B) and covered under the State plan under
    section 1902(a)(10)(A) of the services described in
    section 1905(a)(4)(B) (relating to early and periodic
    screening, diagnostic, and treatment services defined in
    section 1905(r)) and provided in accordance with section
    1902(a)(43), shall be deemed to satisfy the requirements
    of subparagraph (A).''.

    (d) Annual Reports on Medicaid Enrollment.--
    (1) State reports.--Section 1902(a) of the Social Security
    Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is
    amended--
    (A) by striking ``and'' at the end of paragraph
    (73);
    (B) by striking the period at the end of paragraph
    (74) and inserting ``; and''; and
    (C) by inserting after paragraph (74) the following
    new paragraph:
    ``(75) <>  provide that, beginning
    January 2015, and annually thereafter, the State shall submit a
    report to the Secretary that contains--
    ``(A) the total number of enrolled and newly
    enrolled individuals in the State plan or under a waiver
    of the plan for the fiscal year ending on September 30
    of the preceding calendar year, disaggregated by
    population, including children, parents, nonpregnant
    childless adults, disabled individuals, elderly
    individuals, and such other

    [[Page 278]]

    categories or sub-categories of individuals eligible for
    medical assistance under the State plan or under a
    waiver of the plan as the Secretary may require;
    ``(B) a description, which may be specified by
    population, of the outreach and enrollment processes
    used by the State during such fiscal year; and
    ``(C) any other data reporting determined necessary
    by the Secretary to monitor enrollment and retention of
    individuals eligible for medical assistance under the
    State plan or under a waiver of the plan.''.
    (2) Reports to congress.-- <> Beginning April 2015, and annually thereafter, the
    Secretary of Health and Human Services shall submit a report to
    the appropriate committees of Congress on the total enrollment
    and new enrollment in Medicaid for the fiscal year ending on
    September 30 of the preceding calendar year on a national and
    State-by-State basis, and shall include in each such report such
    recommendations for administrative or legislative changes to
    improve enrollment in the Medicaid program as the Secretary
    determines appropriate.

    (e) State Option for Coverage for Individuals With Income That
    Exceeds 133 Percent of the Poverty Line.--
    (1) Coverage as optional categorically needy group.--Section
    1902 of the Social Security Act (42 U.S.C. 1396a) is amended--
    (A) in subsection (a)(10)(A)(ii)--
    (i) in subclause (XVIII), by striking ``or''
    at the end;
    (ii) in subclause (XIX), by adding ``or'' at
    the end; and
    (iii) by adding at the end the following new
    subclause:
    ``(XX) <> beginning January 1, 2014, who
    are under 65 years of age and are not
    described in or enrolled under a
    previous subclause of this clause, and
    whose income (as determined under
    subsection (e)(14)) exceeds 133 percent
    of the poverty line (as defined in
    section 2110(c)(5)) applicable to a
    family of the size involved but does not
    exceed the highest income eligibility
    level established under the State plan
    or under a waiver of the plan, subject
    to subsection (hh);'' and
    (B) by adding at the end the following new
    subsection:

    ``(hh)(1) A State may elect to phase-in the extension of eligibility
    for medical assistance to individuals described in subclause (XX) of
    subsection (a)(10)(A)(ii) based on the categorical group (including
    nonpregnant childless adults) or income, so long as the State does not
    extend such eligibility to individuals described in such subclause with
    higher income before making individuals described in such subclause with
    lower income eligible for medical assistance.
    ``(2) If an individual described in subclause (XX) of subsection
    (a)(10)(A)(ii) is the parent of a child who is under 19 years of age (or
    such higher age as the State may have elected) who is eligible for
    medical assistance under the State plan or under a waiver of such plan,
    the individual may not be enrolled under the State plan unless the
    individual's child is enrolled under the State plan or under a waiver of
    the plan or is enrolled in other health insurance coverage. For purposes
    of the preceding sentence,

    [[Page 279]]

    the term `parent' includes an individual treated as a caretaker relative
    for purposes of carrying out section 1931.''.
    (2) Conforming amendments.--
    (A) Section 1905(a) of such Act (42 U.S.C.
    1396d(a)), as amended by subsection (a)(5)(C), is
    amended in the matter preceding paragraph (1)--
    (i) by striking ``or'' at the end of clause
    (xiii);
    (ii) by inserting ``or'' at the end of clause
    (xiv); and
    (iii) by inserting after clause (xiv) the
    following:
    ``(xv) individuals described in section
    1902(a)(10)(A)(ii)(XX),''.
    (B) Section 1903(f)(4) of such Act (42 U.S.C.
    1396b(f)(4)) is amended by inserting
    ``1902(a)(10)(A)(ii)(XX),'' after
    ``1902(a)(10)(A)(ii)(XIX),''.
    (C) Section 1920(e) of such Act (42 U.S.C. 1396r-
    1(e)), as added by subsection (a)(4)(B), is amended by
    inserting ``or clause (ii)(XX)'' after ``clause
    (i)(VIII)''.

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

    (a) In General.--Section 1902(e) of the Social Security Act (42
    U.S.C. 1396a(e)) is amended by adding at the end the following:
    ``(14) Income determined using modified gross income.--
    ``(A) In general.--Notwithstanding subsection (r) or
    any other provision of this title, except as provided in
    subparagraph (D), for purposes of determining income
    eligibility for medical assistance under the State plan
    or under any waiver of such plan and for any other
    purpose applicable under the plan or waiver for which a
    determination of income is required, including with
    respect to the imposition of premiums and cost-sharing,
    a State shall use the modified gross income of an
    individual and, in the case of an individual in a family
    greater than 1, the household income of such family. A
    State shall establish income eligibility thresholds for
    populations to be eligible for medical assistance under
    the State plan or a waiver of the plan using modified
    gross income and household income that are not less than
    the effective income eligibility levels that applied
    under the State plan or waiver on the date of enactment
    of the Patient Protection and Affordable Care Act. For
    purposes of complying with the maintenance of effort
    requirements under subsection (gg) during the transition
    to modified gross income and household income, a State
    shall, working with the Secretary, establish an
    equivalent income test that ensures individuals eligible
    for medical assistance under the State plan or under a
    waiver of the plan on the date of enactment of the
    Patient Protection and Affordable Care Act, do not lose
    coverage under the State plan or under a waiver of the
    plan. <> The Secretary may
    waive such provisions of this title and title XXI as are
    necessary to ensure that States establish income and
    eligibility determination systems that protect
    beneficiaries.
    ``(B) No income or expense disregards.--No type of
    expense, block, or other income disregard shall be
    applied

    [[Page 280]]

    by a State to determine income eligibility for medical
    assistance under the State plan or under any waiver of
    such plan or for any other purpose applicable under the
    plan or waiver for which a determination of income is
    required.
    ``(C) No assets test.--A State shall not apply any
    assets or resources test for purposes of determining
    eligibility for medical assistance under the State plan
    or under a waiver of the plan.
    ``(D) Exceptions.--
    ``(i) Individuals eligible because of other
    aid or assistance, elderly individuals, medically
    needy individuals, and individuals eligible for
    medicare cost-sharing.--Subparagraphs (A), (B),
    and (C) shall not apply to the determination of
    eligibility under the State plan or under a waiver
    for medical assistance for the following:
    ``(I) Individuals who are eligible
    for medical assistance under the State
    plan or under a waiver of the plan on a
    basis that does not require a
    determination of income by the State
    agency administering the State plan or
    waiver, including as a result of
    eligibility for, or receipt of, other
    Federal or State aid or assistance,
    individuals who are eligible on the
    basis of receiving (or being treated as
    if receiving) supplemental security
    income benefits under title XVI, and
    individuals who are eligible as a result
    of being or being deemed to be a child
    in foster care under the responsibility
    of the State.
    ``(II) Individuals who have attained
    age 65.
    ``(III) Individuals who qualify for
    medical assistance under the State plan
    or under any waiver of such plan on the
    basis of being blind or disabled (or
    being treated as being blind or
    disabled) without regard to whether the
    individual is eligible for supplemental
    security income benefits under title XVI
    on the basis of being blind or disabled
    and including an individual who is
    eligible for medical assistance on the
    basis of section 1902(e)(3).
    ``(IV) Individuals described in
    subsection (a)(10)(C).
    ``(V) Individuals described in any
    clause of subsection (a)(10)(E).
    ``(ii) Express lane agency findings.--In the
    case of a State that elects the Express Lane
    option under paragraph (13), notwithstanding
    subparagraphs (A), (B), and (C), the State may
    rely on a finding made by an Express Lane agency
    in accordance with that paragraph relating to the
    income of an individual for purposes of
    determining the individual's eligibility for
    medical assistance under the State plan or under a
    waiver of the plan.
    ``(iii) Medicare prescription drug subsidies
    determinations.--Subparagraphs (A), (B), and (C)
    shall not apply to any determinations of
    eligibility for premium and cost-sharing subsidies
    under and in

    [[Page 281]]

    accordance with section 1860D-14 made by the State
    pursuant to section 1935(a)(2).
    ``(iv) Long-term care.--Subparagraphs (A),
    (B), and (C) shall not apply to any determinations
    of eligibility of individuals for purposes of
    medical assistance for nursing facility services,
    a level of care in any institution equivalent to
    that of nursing facility services, home or
    community-based services furnished under a waiver
    or State plan amendment under section 1915 or a
    waiver under section 1115, and services described
    in section 1917(c)(1)(C)(ii).
    ``(v) Grandfather of current enrollees until
    date of next regular redetermination.--An
    individual who, on January 1, 2014, is enrolled in
    the State plan or under a waiver of the plan and
    who would be determined ineligible for medical
    assistance solely because of the application of
    the modified gross income or household income
    standard described in subparagraph (A), shall
    remain eligible for medical assistance under the
    State plan or waiver (and subject to the same
    premiums and cost-sharing as applied to the
    individual on that date) through March 31, 2014,
    or the date on which the individual's next
    regularly scheduled redetermination of eligibility
    is to occur, whichever is later.
    ``(E) Transition planning and oversight.--
    <> Each State shall submit to the
    Secretary for the Secretary's approval the income
    eligibility thresholds proposed to be established using
    modified gross income and household income, the
    methodologies and procedures to be used to determine
    income eligibility using modified gross income and
    household income and, if applicable, a State plan
    amendment establishing an optional eligibility category
    under subsection (a)(10)(A)(ii)(XX). To the extent
    practicable, the State shall use the same methodologies
    and procedures for purposes of making such
    determinations as the State used on the date of
    enactment of the Patient Protection and Affordable Care
    Act. The Secretary shall ensure that the income
    eligibility thresholds proposed to be established using
    modified gross income and household income, including
    under the eligibility category established under
    subsection (a)(10)(A)(ii)(XX), and the methodologies and
    procedures proposed to be used to determine income
    eligibility, will not result in children who would have
    been eligible for medical assistance under the State
    plan or under a waiver of the plan on the date of
    enactment of the Patient Protection and Affordable Care
    Act no longer being eligible for such assistance.
    ``(F) Limitation on secretarial authority.--The
    Secretary shall not waive compliance with the
    requirements of this paragraph except to the extent
    necessary to permit a State to coordinate eligibility
    requirements for dual eligible individuals (as defined
    in section 1915(h)(2)(B)) under the State plan or under
    a waiver of the plan and under title XVIII and
    individuals who require the level of care provided in a
    hospital, a nursing facility, or an intermediate care
    facility for the mentally retarded.

    [[Page 282]]

    ``(G) Definitions of modified gross income and
    household income.--In this paragraph, the terms
    `modified gross income' and `household income' have the
    meanings given such terms in section 36B(d)(2) of the
    Internal Revenue Code of 1986.
    ``(H) Continued application of medicaid rules
    regarding point-in-time income and sources of income.--
    The requirement under this paragraph for States to use
    modified gross income and household income to determine
    income eligibility for medical assistance under the
    State plan or under any waiver of such plan and for any
    other purpose applicable under the plan or waiver for
    which a determination of income is required shall not be
    construed as affecting or limiting the application of--
    ``(i) the requirement under this title and
    under the State plan or a waiver of the plan to
    determine an individual's income as of the point
    in time at which an application for medical
    assistance under the State plan or a waiver of the
    plan is processed; or
    ``(ii) any rules established under this title
    or under the State plan or a waiver of the plan
    regarding sources of countable income.''.

    (b) Conforming Amendment.--Section 1902(a)(17) of such Act (42
    U.S.C. 1396a(a)(17)) is amended by inserting ``(e)(14),'' before
    ``(l)(3)''.
    (c) <>  Effective Date.--The amendments
    made by subsections (a) and (b) take effect on January 1, 2014.

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

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

    [[Page 283]]

    (b) Conforming Amendment.--The heading for section 1906A of such Act
    (42 U.S.C. 1396e-1) is amended by striking ``option for children''.
    (c) <>  Effective Date.--The amendments
    made by this section take effect on January 1, 2014.

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

    (a) In General.--Section 1902(a)(10)(A)(i) of the Social Security
    Act (42 U.S.C. 1396a), as amended by section 2001(a)(1), is amended--
    (1) by striking ``or'' at the end of subclause (VII);
    (2) by adding ``or'' at the end of subclause (VIII); and
    (3) by inserting after subclause (VIII) the following:
    ``(IX) who were in foster care under
    the responsibility of a State for more
    than 6 months (whether or not
    consecutive) but are no longer in such
    care, who are not described in any of
    subclauses (I) through (VII) of this
    clause, and who are under 25 years of
    age;''.

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

    (d) <>  Effective Date.--The amendments
    made by this section take effect on January 1, 2019.

    SEC. 2005. PAYMENTS TO TERRITORIES.

    (a) Increase in Limit on Payments.--Section 1108(g) of the Social
    Security Act (42 U.S.C. 1308(g)) is amended--
    (1) in paragraph (2), in the matter preceding subparagraph
    (A), by striking ``paragraph (3)'' and inserting ``paragraphs
    (3) and (5)'';
    (2) in paragraph (4), by striking ``and (3)'' and inserting
    ``(3), and (4)''; and
    (3) by adding at the end the following paragraph:
    ``(5) Fiscal year 2011 and thereafter.--The amounts
    otherwise determined under this subsection for Puerto Rico, the
    Virgin Islands, Guam, the Northern Mariana Islands, and American
    Samoa for the second, third, and fourth quarters of fiscal year
    2011, and for each fiscal year after fiscal year 2011 (after the
    application of subsection (f) and the preceding paragraphs of
    this subsection), shall be increased by 30 percent.''.

    (b) Disregard of Payments for Mandatory Expanded Enrollment.--
    Section 1108(g)(4) of such Act (42 U.S.C. 1308(g)(4)) is amended--
    (1) by striking ``to fiscal years beginning'' and inserting
    ``to--
    ``(A) fiscal years beginning'';

    [[Page 284]]

    (2) by striking the period at the end and inserting ``;
    and''; and
    (3) by adding at the end the following:
    ``(B) fiscal years beginning with fiscal year 2014,
    payments made to Puerto Rico, the Virgin Islands, Guam,
    the Northern Mariana Islands, or American Samoa with
    respect to amounts expended for medical assistance for
    newly eligible (as defined in section 1905(y)(2))
    nonpregnant childless adults who are eligible under
    subclause (VIII) of section 1902(a)(10)(A)(i) and whose
    income (as determined under section 1902(e)(14)) does
    not exceed (in the case of each such commonwealth and
    territory respectively) the income eligibility level in
    effect for that population under title XIX or under a
    waiver on the date of enactment of the Patient
    Protection and Affordable Care Act, shall not be taken
    into account in applying subsection (f) (as increased in
    accordance with paragraphs (1), (2), (3), and (5) of
    this subsection) to such commonwealth or territory for
    such fiscal year.''.

    (c) Increased FMAP.--
    (1) In general.--The first sentence of section 1905(b) of
    the Social Security Act (42 U.S.C. 1396d(b)) is amended by
    striking ``shall be 50 per centum'' and inserting ``shall be 55
    percent''.
    (2) <>  Effective date.--The
    amendment made by paragraph (1) takes effect on January 1, 2011.

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

    Section 1905 of the Social Security Act (42 U.S.C. 1396d), as
    amended by sections 2001(a)(3) and 2001(b)(2), is amended--
    (1) in subsection (b), in the first sentence, by striking
    ``subsection (y)'' and inserting ``subsections (y) and (aa)'';
    and
    (2) by adding at the end the following new subsection:

    ``(aa)(1) <> Notwithstanding subsection (b),
    beginning January 1, 2011, the Federal medical assistance percentage for
    a fiscal year for a disaster-recovery FMAP adjustment State shall be
    equal to the following:
    ``(A) In the case of the first fiscal year (or part of a
    fiscal year) for which this subsection applies to the State, the
    Federal medical assistance percentage determined for the fiscal
    year without regard to this subsection and subsection (y),
    increased by 50 percent of the number of percentage points by
    which the Federal medical assistance percentage determined for
    the State for the fiscal year without regard to this subsection
    and subsection (y), is less than the Federal medical assistance
    percentage determined for the State for the preceding fiscal
    year after the application of only subsection (a) of section
    5001 of Public Law 111-5 (if applicable to the preceding fiscal
    year) and without regard to this subsection, subsection (y), and
    subsections (b) and (c) of section 5001 of Public Law 111-5.
    ``(B) In the case of the second or any succeeding fiscal
    year for which this subsection applies to the State, the Federal
    medical assistance percentage determined for the preceding
    fiscal year under this subsection for the State, increased by 25
    percent of the number of percentage points by which the Federal
    medical assistance percentage determined for the State

    [[Page 285]]

    for the fiscal year without regard to this subsection and
    subsection (y), is less than the Federal medical assistance
    percentage determined for the State for the preceding fiscal
    year under this subsection.

    ``(2) <>  In this subsection, the term `disaster-
    recovery FMAP adjustment State' means a State that is one of the 50
    States or the District of Columbia, for which, at any time during the
    preceding 7 fiscal years, the President has declared a major disaster
    under section 401 of the Robert T. Stafford Disaster Relief and
    Emergency Assistance Act and determined as a result of such disaster
    that every county or parish in the State warrant individual and public
    assistance or public assistance from the Federal Government under such
    Act and for which--
    ``(A) in the case of the first fiscal year (or part of a
    fiscal year) for which this subsection applies to the State, the
    Federal medical assistance percentage determined for the State
    for the fiscal year without regard to this subsection and
    subsection (y), is less than the Federal medical assistance
    percentage determined for the State for the preceding fiscal
    year after the application of only subsection (a) of section
    5001 of Public Law 111-5 (if applicable to the preceding fiscal
    year) and without regard to this subsection, subsection (y), and
    subsections (b) and (c) of section 5001 of Public Law 111-5, by
    at least 3 percentage points; and
    ``(B) in the case of the second or any succeeding fiscal
    year for which this subsection applies to the State, the Federal
    medical assistance percentage determined for the State for the
    fiscal year without regard to this subsection and subsection
    (y), is less than the Federal medical assistance percentage
    determined for the State for the preceding fiscal year under
    this subsection by at least 3 percentage points.

    ``(3) <>  The Federal medical assistance
    percentage determined for a disaster-recovery FMAP adjustment State
    under paragraph (1) shall apply for purposes of this title (other than
    with respect to disproportionate share hospital payments described in
    section 1923 and payments under this title that are based on the
    enhanced FMAP described in 2105(b)) and shall not apply with respect to
    payments under title IV (other than under part E of title IV) or
    payments under title XXI.''.

    SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION.

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

    [[Page 286]]

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

    SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR CHIP.

    (a) In General.-- <> Section 2105(b) of the
    Social Security Act (42 U.S.C. 1397ee(b)) is amended by adding at the
    end the following: ``Notwithstanding the preceding sentence, during the
    period that begins on October 1, 2013, and ends on September 30, 2019,
    the enhanced FMAP determined for a State for a fiscal year (or for any
    portion of a fiscal year occurring during such period) shall be
    increased by 23 percentage points, but in no case shall exceed 100
    percent. The increase in the enhanced FMAP under the preceding sentence
    shall not apply with respect to determining the payment to a State under
    subsection (a)(1) for expenditures described in subparagraph (D)(iv),
    paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first
    sentence of section 1905(b).''.

    (b) Maintenance of Effort.--
    (1) In general.--Section 2105(d) of the Social Security Act
    (42 U.S.C. 1397ee(d)) is amended by adding at the end the
    following:
    ``(3) Continuation of eligibility standards for children
    until october 1, 2019.--
    ``(A) In general.-- <> During
    the period that begins on the date of enactment of the
    Patient Protection and Affordable Care Act and ends on
    September 30, 2019, a State shall not have in effect
    eligibility standards, methodologies, or procedures
    under its State child health plan (including any waiver
    under such plan) for children (including children
    provided medical assistance for which payment is made
    under section 2105(a)(1)(A)) that are more restrictive
    than the eligibility standards, methodologies, or
    procedures, respectively, under such plan (or waiver) as
    in effect on the date of enactment of that Act. The
    preceding sentence shall not be construed as preventing
    a State during such period from--
    ``(i) applying eligibility standards,
    methodologies, or procedures for children under
    the State child health plan or under any waiver of
    the plan that are less restrictive than the
    eligibility standards, methodologies, or
    procedures, respectively, for children under the
    plan or waiver that are in effect on the date of
    enactment of such Act; or
    ``(ii) imposing a limitation described in
    section 2112(b)(7) for a fiscal year in order to
    limit expenditures under the State child health
    plan to those for which Federal financial
    participation is available under this section for
    the fiscal year.
    ``(B) Assurance of exchange coverage for targeted
    low-income children unable to be provided child health
    assistance as a result of funding
    shortfalls. <> --In the event that
    allotments provided under section 2104 are insufficient
    to provide coverage to all children who are eligible to
    be targeted low-income children under the State child
    health plan under this title, a State shall

    [[Page 287]]

    establish procedures to ensure that such children are
    provided coverage through an Exchange established by the
    State under section 1311 of the Patient Protection and
    Affordable Care Act.''.
    (2) Conforming amendment to title xxi medicaid maintenance
    of effort.--Section 2105(d)(1) of the Social Security Act (42
    U.S.C. 1397ee(d)(1)) is amended by adding before the period ``,
    except as required under section 1902(e)(14)''.

    (c) No Enrollment Bonus Payments for Children Enrolled After Fiscal
    Year 2013.--Section 2105(a)(3)(F)(iii) of the Social Security Act (42
    U.S.C. 1397ee(a)(3)(F)(iii)) is amended by inserting ``or any children
    enrolled on or after October 1, 2013'' before the period.
    (d) Income Eligibility Determined Using Modified Gross Income.--
    (1) State plan requirement.--Section 2102(b)(1)(B) of the
    Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
    (A) in clause (iii), by striking ``and'' after the
    semicolon;
    (B) in clause (iv), by striking the period and
    inserting ``; and''; and
    (C) by adding at the end the following:
    ``(v) <>  shall,
    beginning January 1, 2014, use modified gross
    income and household income (as defined in section
    36B(d)(2) of the Internal Revenue Code of 1986) to
    determine eligibility for child health assistance
    under the State child health plan or under any
    waiver of such plan and for any other purpose
    applicable under the plan or waiver for which a
    determination of income is required, including
    with respect to the imposition of premiums and
    cost-sharing, consistent with section
    1902(e)(14).''.
    (2) Conforming amendment.--Section 2107(e)(1) of the Social
    Security Act (42 U.S.C. 1397gg(e)(1)) is amended--
    (A) by redesignating subparagraphs (E) through (L)
    as subparagraphs (F) through (M), respectively; and
    (B) by inserting after subparagraph (D), the
    following:
    ``(E) Section 1902(e)(14) (relating to income
    determined using modified gross income and household
    income).''.

    (e) Application of Streamlined Enrollment System.--Section
    2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)), as
    amended by subsection (d)(2), is amended by adding at the end the
    following:
    ``(N) Section 1943(b) (relating to coordination with
    State Exchanges and the State Medicaid agency).''.

    (f) <>  CHIP Eligibility for Children
    Ineligible for Medicaid as a Result of Elimination of Disregards.--
    Notwithstanding any other provision of law, a State shall treat any
    child who is determined to be ineligible for medical assistance under
    the State Medicaid plan or under a waiver of the plan as a result of the
    elimination of the application of an income disregard based on expense
    or type of income, as required under section 1902(e)(14) of the Social
    Security Act (as added by this Act), as a targeted low-income child
    under section 2110(b) (unless the child is excluded under paragraph (2)
    of that section) and shall provide child health assistance to the child
    under the State child health plan (whether

    [[Page 288]]

    implemented under title XIX or XXI, or both, of the Social Security
    Act).

    SEC. 2102. TECHNICAL CORRECTIONS.

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

    [[Page 289]]

    (b) <>  ARRA.--Effective as if included
    in the enactment of section 5006(a) of division B of the American
    Recovery and Reinvestment Act of 2009 (Public Law 111-5), the second
    sentence of section 1916A(a)(1) of the Social Security Act (42 U.S.C.
    1396o-1(a)(1)) is amended by striking ``or (i)'' and inserting ``, (i),
    or (j)''.

    Subtitle C--Medicaid and CHIP Enrollment Simplification

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

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

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

    ``(a) Condition for Participation in Medicaid. <> --As a condition of the State plan under this title and receipt
    of any Federal financial assistance under section 1903(a) for calendar
    quarters beginning after January 1, 2014, a State shall ensure that the
    requirements of subsection (b) is met.

    ``(b) Enrollment Simplification and Coordination With State Health
    Insurance Exchanges and Chip.--
    ``(1) In general.-- <> A State shall
    establish procedures for--
    ``(A) <>  enabling individuals,
    through an Internet website that meets the requirements
    of paragraph (4), to apply for medical assistance under
    the State plan or under a waiver of the plan, to be
    enrolled in the State plan or waiver, to renew their
    enrollment in the plan or waiver, and to consent to
    enrollment or reenrollment in the State plan through
    electronic signature;
    ``(B) enrolling, without any further determination
    by the State and through such website, individuals who
    are identified by an Exchange established by the State
    under section 1311 of the Patient Protection and
    Affordable Care Act as being eligible for--
    ``(i) medical assistance under the State plan
    or under a waiver of the plan; or
    ``(ii) child health assistance under the State
    child health plan under title XXI;
    ``(C) ensuring that individuals who apply for but
    are determined to be ineligible for medical assistance
    under the State plan or a waiver or ineligible for child
    health assistance under the State child health plan
    under title XXI, are screened for eligibility for
    enrollment in qualified health plans offered through
    such an Exchange and, if applicable, premium assistance
    for the purchase of a qualified health plan under
    section 36B of the Internal Revenue Code of 1986 (and,
    if applicable, advance payment of such assistance under
    section 1412 of the Patient Protection and Affordable
    Care Act), and, if eligible, enrolled in such a plan
    without having to submit an additional or separate
    application, and that such individuals receive
    information regarding reduced cost-sharing for eligible
    individuals under section 1402 of the Patient Protection
    and Affordable

    [[Page 290]]

    Care Act, and any other assistance or subsidies
    available for coverage obtained through the Exchange;
    ``(D) ensuring that the State agency responsible for
    administering the State plan under this title (in this
    section referred to as the `State Medicaid agency'), the
    State agency responsible for administering the State
    child health plan under title XXI (in this section
    referred to as the `State CHIP agency') and an Exchange
    established by the State under section 1311 of the
    Patient Protection and Affordable Care Act utilize a
    secure electronic interface sufficient to allow for a
    determination of an individual's eligibility for such
    medical assistance, child health assistance, or premium
    assistance, and enrollment in the State plan under this
    title, title XXI, or a qualified health plan, as
    appropriate;
    ``(E) coordinating, for individuals who are enrolled
    in the State plan or under a waiver of the plan and who
    are also enrolled in a qualified health plan offered
    through such an Exchange, and for individuals who are
    enrolled in the State child health plan under title XXI
    and who are also enrolled in a qualified health plan,
    the provision of medical assistance or child health
    assistance to such individuals with the coverage
    provided under the qualified health plan in which they
    are enrolled, including services described in section
    1905(a)(4)(B) (relating to early and periodic screening,
    diagnostic, and treatment services defined in section
    1905(r)) and provided in accordance with the
    requirements of section 1902(a)(43); and
    ``(F) conducting outreach to and enrolling
    vulnerable and underserved populations eligible for
    medical assistance under this title XIX or for child
    health assistance under title XXI, including children,
    unaccompanied homeless youth, children and youth with
    special health care needs, pregnant women, racial and
    ethnic minorities, rural populations, victims of abuse
    or trauma, individuals with mental health or substance-
    related disorders, and individuals with HIV/AIDS.
    ``(2) Agreements with state health insurance exchanges.--The
    State Medicaid agency and the State CHIP agency may enter into
    an agreement with an Exchange established by the State under
    section 1311 of the Patient Protection and Affordable Care Act
    under which the State Medicaid agency or State CHIP agency may
    determine whether a State resident is eligible for premium
    assistance for the purchase of a qualified health plan under
    section 36B of the Internal Revenue Code of 1986 (and, if
    applicable, advance payment of such assistance under section
    1412 of the Patient Protection and Affordable Care Act), so long
    as the agreement meets such conditions and requirements as the
    Secretary of the Treasury may prescribe to reduce administrative
    costs and the likelihood of eligibility errors and disruptions
    in coverage.
    ``(3) Streamlined enrollment system.--The State Medicaid
    agency and State CHIP agency shall participate in and comply
    with the requirements for the system established under section
    1413 of the Patient Protection and Affordable Care Act (relating
    to streamlined procedures for enrollment through an Exchange,
    Medicaid, and CHIP).

    [[Page 291]]

    ``(4) Enrollment website requirements.--
    <> The procedures established by State under
    paragraph (1) shall include establishing and having in
    operation, not later than January 1, 2014, an Internet website
    that is linked to any website of an Exchange established by the
    State under section 1311 of the Patient Protection and
    Affordable Care Act and to the State CHIP agency (if different
    from the State Medicaid agency) and allows an individual who is
    eligible for medical assistance under the State plan or under a
    waiver of the plan and who is eligible to receive premium credit
    assistance for the purchase of a qualified health plan under
    section 36B of the Internal Revenue Code of 1986 to compare the
    benefits, premiums, and cost-sharing applicable to the
    individual under the State plan or waiver with the benefits,
    premiums, and cost-sharing available to the individual under a
    qualified health plan offered through such an Exchange,
    including, in the case of a child, the coverage that would be
    provided for the child through the State plan or waiver with the
    coverage that would be provided to the child through enrollment
    in family coverage under that plan and as supplemental coverage
    by the State under the State plan or waiver.
    ``(5) Continued need for assessment for home and community-
    based services.--Nothing in paragraph (1) shall limit or modify
    the requirement that the State assess an individual for purposes
    of providing home and community-based services under the State
    plan or under any waiver of such plan for individuals described
    in subsection (a)(10)(A)(ii)(VI).''.

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

    (a) In General.--Section 1902(a)(47) of the Social Security Act (42
    U.S.C. 1396a(a)(47)) is amended--
    (1) by striking ``at the option of the State, provide'' and
    inserting ``provide--
    ``(A) at the option of the State,'';
    (2) by inserting ``and'' after the semicolon; and
    (3) by adding at the end the following:
    ``(B) <>  that any hospital that
    is a participating provider under the State plan may
    elect to be a qualified entity for purposes of
    determining, on the basis of preliminary information,
    whether any individual is eligible for medical
    assistance under the State plan or under a waiver of the
    plan for purposes of providing the individual with
    medical assistance during a presumptive eligibility
    period, in the same manner, and subject to the same
    requirements, as apply to the State options with respect
    to populations described in section 1920, 1920A, or
    1920B (but without regard to whether the State has
    elected to provide for a presumptive eligibility period
    under any such sections), subject to such guidance as
    the Secretary shall establish;''.

    (b) Conforming Amendment.--Section 1903(u)(1)(D)(v) of such Act (42
    U.S.C. 1396b(u)(1)(D)v)) is amended--
    (1) by striking ``or for'' and inserting ``for''; and
    (2) by inserting before the period at the end the following:
    ``, or for medical assistance provided to an individual during a
    presumptive eligibility period resulting from a determination

    [[Page 292]]

    of presumptive eligibility made by a hospital that elects under
    section 1902(a)(47)(B) to be a qualified entity for such
    purpose''.

    (c) <>  Effective Date.--
    The amendments made by this section take effect on January 1, 2014, and
    apply to services furnished on or after that date.

    Subtitle D--Improvements to Medicaid Services

    SEC. 2301. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), is amended--
    (1) in subsection (a)--
    (A) in paragraph (27), by striking ``and'' at the
    end;
    (B) by redesignating paragraph (28) as paragraph
    (29); and
    (C) by inserting after paragraph (27) the following
    new paragraph:
    ``(28) freestanding birth center services (as defined in
    subsection (l)(3)(A)) and other ambulatory services that are
    offered by a freestanding birth center (as defined in subsection
    (l)(3)(B)) and that are otherwise included in the plan; and'';
    and
    (2) in subsection (l), by adding at the end the following
    new paragraph:

    ``(3)(A) <>  The term `freestanding birth center
    services' means services furnished to an individual at a freestanding
    birth center (as defined in subparagraph (B)) at such center.

    ``(B) The term `freestanding birth center' means a health facility--
    ``(i) that is not a hospital;
    ``(ii) where childbirth is planned to occur away from the
    pregnant woman's residence;
    ``(iii) that is licensed or otherwise approved by the State
    to provide prenatal labor and delivery or postpartum care and
    other ambulatory services that are included in the plan; and
    ``(iv) that complies with such other requirements relating
    to the health and safety of individuals furnished services by
    the facility as the State shall establish.

    ``(C) <>  A State shall provide separate payments
    to providers administering prenatal labor and delivery or postpartum
    care in a freestanding birth center (as defined in subparagraph (B)),
    such as nurse midwives and other providers of services such as birth
    attendants recognized under State law, as determined appropriate by the
    Secretary. For purposes of the preceding sentence, the term `birth
    attendant' means an individual who is recognized or registered by the
    State involved to provide health care at childbirth and who provides
    such care within the scope of practice under which the individual is
    legally authorized to perform such care under State law (or the State
    regulatory mechanism provided by State law), regardless of whether the
    individual is under the supervision of, or associated with, a physician
    or other health care provider. Nothing in this subparagraph shall be
    construed as changing State law requirements applicable to a birth
    attendant.''.

    (b) Conforming Amendment.--Section 1902(a)(10)(A) of the Social
    Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the

    [[Page 293]]

    matter preceding clause (i) by striking ``and (21)'' and inserting ``,
    (21), and (28)''.
    (c) <>  Effective Date.--
    (1) In general.-- <> Except as
    provided in paragraph (2), the amendments made by this section
    shall take effect on the date of the enactment of this Act and
    shall apply to services furnished on or after such date.
    (2) Exception if state legislation required.--
    <> In the case of a State plan for medical
    assistance under title XIX of the Social Security Act which the
    Secretary of Health and Human Services determines requires State
    legislation (other than legislation appropriating funds) in
    order for the plan to meet the additional requirement imposed by
    the amendments made by this section, the State plan shall not be
    regarded as failing to comply with the requirements of such
    title solely on the basis of its failure to meet this additional
    requirement before the first day of the first calendar quarter
    beginning after the close of the first regular session of the
    State legislature that begins after the date of the enactment of
    this Act. For purposes of the previous sentence, in the case of
    a State that has a 2-year legislative session, each year of such
    session shall be deemed to be a separate regular session of the
    State legislature.

    SEC. 2302. CONCURRENT CARE FOR CHILDREN.

    (a) In General.--Section 1905(o)(1) of the Social Security Act (42
    U.S.C. 1396d(o)(1)) is amended--
    (1) in subparagraph (A), by striking ``subparagraph (B)''
    and inserting ``subparagraphs (B) and (C)''; and
    (2) by adding at the end the following new subparagraph:

    ``(C) A voluntary election to have payment made for hospice care for
    a child (as defined by the State) shall not constitute a waiver of any
    rights of the child to be provided with, or to have payment made under
    this title for, services that are related to the treatment of the
    child's condition for which a diagnosis of terminal illness has been
    made.''.
    (b) Application to CHIP.--Section 2110(a)(23) of the Social Security
    Act (42 U.S.C. 1397jj(a)(23)) is amended by inserting ``(concurrent, in
    the case of an individual who is a child, with care related to the
    treatment of the child's condition with respect to which a diagnosis of
    terminal illness has been made'' after ``hospice care''.

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

    (a) Coverage as Optional Categorically Needy Group.--
    (1) In general.--Section 1902(a)(10)(A)(ii) of the Social
    Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by
    section 2001(e), is amended--
    (A) in subclause (XIX), by striking ``or'' at the
    end;
    (B) in subclause (XX), by adding ``or'' at the end;
    and
    (C) by adding at the end the following new
    subclause:
    ``(XXI) who are described in
    subsection (ii) (relating to individuals
    who meet certain income standards);''.
    (2) Group described.--Section 1902 of such Act (42 U.S.C.
    1396a), as amended by section 2001(d), is amended by adding at
    the end the following new subsection:

    [[Page 294]]

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

    (b) Presumptive Eligibility.--
    (1) In general.--Title XIX of the Social Security Act (42
    U.S.C. 1396 et seq.) is amended by inserting after section 1920B
    the following:

    ``presumptive eligibility for family planning services

    ``Sec. 1920C.  <>  (a) State Option.--State
    plan approved under section 1902 may provide for making medical
    assistance available to an individual described in section 1902(ii)
    (relating to individuals who meet certain income eligibility standard)
    during a presumptive eligibility period. In the case of an individual
    described in section 1902(ii), such medical assistance shall be limited
    to family planning services and supplies described in 1905(a)(4)(C) and,
    at the State's option, medical diagnosis and treatment services that are
    provided

    [[Page 295]]

    in conjunction with a family planning service in a family planning
    setting.

    ``(b) Definitions.--For purposes of this section:
    ``(1) Presumptive eligibility period.--The term `presumptive
    eligibility period' means, with respect to an individual
    described in subsection (a), the period that--
    ``(A) begins with the date on which a qualified
    entity determines, on the basis of preliminary
    information, that the individual is described in section
    1902(ii); and
    ``(B) ends with (and includes) the earlier of--
    ``(i) the day on which a determination is made
    with respect to the eligibility of such individual
    for services under the State plan; or
    ``(ii) in the case of such an individual who
    does not file an application by the last day of
    the month following the month during which the
    entity makes the determination referred to in
    subparagraph (A), such last day.
    ``(2) Qualified entity.--
    ``(A) In general.--Subject to subparagraph (B), the
    term `qualified entity' means any entity that--
    ``(i) is eligible for payments under a State
    plan approved under this title; and
    ``(ii) is determined by the State agency to be
    capable of making determinations of the type
    described in paragraph (1)(A).
    ``(B) Rule of construction.--Nothing in this
    paragraph shall be construed as preventing a State from
    limiting the classes of entities that may become
    qualified entities in order to prevent fraud and abuse.

    ``(c) Administration.--
    ``(1) In general.--The State agency shall provide qualified
    entities with--
    ``(A) such forms as are necessary for an application
    to be made by an individual described in subsection (a)
    for medical assistance under the State plan; and
    ``(B) information on how to assist such individuals
    in completing and filing such forms.
    ``(2) Notification requirements.--A qualified entity that
    determines under subsection (b)(1)(A) that an individual
    described in subsection (a) is presumptively eligible for
    medical assistance under a State plan shall--
    ``(A) <>  notify the State agency
    of the determination within 5 working days after the
    date on which determination is made; and
    ``(B) inform such individual at the time the
    determination is made that an application for medical
    assistance is required to be made by not later than the
    last day of the month following the month during which
    the determination is made.
    ``(3) Application for medical assistance.--
    <> In the case of an individual described in
    subsection (a) who is determined by a qualified entity to be
    presumptively eligible for medical assistance under a State
    plan, the individual shall apply for medical assistance by not
    later than the last day of the month following the month during
    which the determination is made.

    [[Page 296]]

    ``(d) Payment.--Notwithstanding any other provision of law, medical
    assistance that--
    ``(1) is furnished to an individual described in subsection
    (a)--
    ``(A) during a presumptive eligibility period; and
    ``(B) by a entity that is eligible for payments
    under the State plan; and
    ``(2) is included in the care and services covered by the
    State plan,

    shall be treated as medical assistance provided by such plan for
    purposes of clause (4) of the first sentence of section 1905(b).''.
    (2) Conforming amendments.--
    (A) Section 1902(a)(47) of the Social Security Act
    (42 U.S.C. 1396a(a)(47)), as amended by section 2202(a),
    is amended--
    (i) in subparagraph (A), by inserting before
    the semicolon at the end the following: ``and
    provide for making medical assistance available to
    individuals described in subsection (a) of section
    1920C during a presumptive eligibility period in
    accordance with such section''; and
    (ii) in subparagraph (B), by striking ``or
    1920B'' and inserting ``1920B, or 1920C''.
    (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C.
    1396b(u)(1)(D)(v)), as amended by section 2202(b), is
    amended by inserting ``or for medical assistance
    provided to an individual described in subsection (a) of
    section 1920C during a presumptive eligibility period
    under such section,'' after ``1920B during a presumptive
    eligibility period under such section,''.

    (c) Clarification of Coverage of Family Planning Services and
    Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
    7(b)), as amended by section 2001(c), is amended by adding at the end
    the following:
    ``(7) Coverage of family planning services and supplies.--
    Notwithstanding the previous provisions of this section, a State
    may not provide for medical assistance through enrollment of an
    individual with benchmark coverage or benchmark-equivalent
    coverage under this section unless such coverage includes for
    any individual described in section 1905(a)(4)(C), medical
    assistance for family planning services and supplies in
    accordance with such section.''.

    (d) Effective Date. <> --
    The amendments made by this section take effect on the date of the
    enactment of this Act and shall apply to items and services furnished on
    or after such date.

    SEC. 2304. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE.

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

    [[Page 297]]

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

    SEC. 2401. COMMUNITY FIRST CHOICE OPTION.

    Section 1915 of the Social Security Act (42 U.S.C. 1396n) is amended
    by adding at the end the following:
    ``(k) State Plan Option To Provide Home and Community-based
    Attendant Services and Supports.--
    ``(1) In general.-- <> Subject to the
    succeeding provisions of this subsection, beginning October 1,
    2010, a State may provide through a State plan amendment for the
    provision of medical assistance for home and community-based
    attendant services and supports for individuals who are eligible
    for medical assistance under the State plan whose income does
    not exceed 150 percent of the poverty line (as defined in
    section 2110(c)(5)) or, if greater, the income level applicable
    for an individual who has been determined to require an
    institutional level of care to be eligible for nursing facility
    services under the State plan and with respect to whom there has
    been a determination that, but for the provision of such
    services, the individuals would require the level of care
    provided in a hospital, a nursing facility, an intermediate care
    facility for the mentally retarded, or an institution for mental
    diseases, the cost of which could be reimbursed under the State
    plan, but only if the individual chooses to receive such home
    and community-based attendant services and supports, and only if
    the State meets the following requirements:
    ``(A) Availability.--The State shall make available
    home and community-based attendant services and supports
    to eligible individuals, as needed, to assist in
    accomplishing activities of daily living, instrumental
    activities of daily living, and health-related tasks
    through hands-on assistance, supervision, or cueing--
    ``(i) <>  under a person-
    centered plan of services and supports that is
    based on an assessment of functional need and that
    is agreed to in writing by the individual or, as
    appropriate, the individual's representative;
    ``(ii) in a home or community setting, which
    does not include a nursing facility, institution
    for mental diseases, or an intermediate care
    facility for the mentally retarded;
    ``(iii) under an agency-provider model or
    other model (as defined in paragraph (6)(C )); and
    ``(iv) the furnishing of which--
    ``(I) is selected, managed, and
    dismissed by the individual, or, as
    appropriate, with assistance from the
    individual's representative;
    ``(II) is controlled, to the maximum
    extent possible, by the individual or
    where appropriate, the individual's
    representative, regardless of who may
    act as the employer of record; and
    ``(III) provided by an individual
    who is qualified to provide such
    services, including family members (as
    defined by the Secretary).
    ``(B) Included services and supports.--In addition
    to assistance in accomplishing activities of daily
    living,

    [[Page 298]]

    instrumental activities of daily living, and health
    related tasks, the home and community-based attendant
    services and supports made available include--
    ``(i) the acquisition, maintenance, and
    enhancement of skills necessary for the individual
    to accomplish activities of daily living,
    instrumental activities of daily living, and
    health related tasks;
    ``(ii) back-up systems or mechanisms (such as
    the use of beepers or other electronic devices) to
    ensure continuity of services and supports; and
    ``(iii) voluntary training on how to select,
    manage, and dismiss attendants.
    ``(C) Excluded services and supports.--Subject to
    subparagraph (D), the home and community-based attendant
    services and supports made available do not include--
    ``(i) room and board costs for the individual;
    ``(ii) special education and related services
    provided under the Individuals with Disabilities
    Education Act and vocational rehabilitation
    services provided under the Rehabilitation Act of
    1973;
    ``(iii) assistive technology devices and
    assistive technology services other than those
    under (1)(B)(ii);
    ``(iv) medical supplies and equipment; or
    ``(v) home modifications.
    ``(D) Permissible services and supports.--The home
    and community-based attendant services and supports may
    include--
    ``(i) expenditures for transition costs such
    as rent and utility deposits, first month's rent
    and utilities, bedding, basic kitchen supplies,
    and other necessities required for an individual
    to make the transition from a nursing facility,
    institution for mental diseases, or intermediate
    care facility for the mentally retarded to a
    community-based home setting where the individual
    resides; and
    ``(ii) expenditures relating to a need
    identified in an individual's person-centered plan
    of services that increase independence or
    substitute for human assistance, to the extent
    that expenditures would otherwise be made for the
    human assistance.
    ``(2) Increased federal financial participation.--For
    purposes of payments to a State under section 1903(a)(1), with
    respect to amounts expended by the State to provide medical
    assistance under the State plan for home and community-based
    attendant services and supports to eligible individuals in
    accordance with this subsection during a fiscal year quarter
    occurring during the period described in paragraph (1), the
    Federal medical assistance percentage applicable to the State
    (as determined under section 1905(b)) shall be increased by 6
    percentage points.
    ``(3) State requirements.--In order for a State plan
    amendment to be approved under this subsection, the State
    shall--
    ``(A) <>  develop and
    implement such amendment in collaboration with a
    Development and Implementation Council established by
    the State that includes a majority of members with
    disabilities, elderly individuals, and their

    [[Page 299]]

    representatives and consults and collaborates with such
    individuals;
    ``(B) provide consumer controlled home and
    community-based attendant services and supports to
    individuals on a statewide basis, in a manner that
    provides such services and supports in the most
    integrated setting appropriate to the individual's
    needs, and without regard to the individual's age, type
    or nature of disability, severity of disability, or the
    form of home and community-based attendant services and
    supports that the individual requires in order to lead
    an independent life;
    ``(C) with respect to expenditures during the first
    full fiscal year in which the State plan amendment is
    implemented, maintain or exceed the level of State
    expenditures for medical assistance that is provided
    under section 1905(a), section 1915, section 1115, or
    otherwise to individuals with disabilities or elderly
    individuals attributable to the preceding fiscal year;
    ``(D) establish and maintain a comprehensive,
    continuous quality assurance system with respect to
    community- based attendant services and supports that--
    ``(i) includes standards for agency-based and
    other delivery models with respect to training,
    appeals for denials and reconsideration procedures
    of an individual plan, and other factors as
    determined by the Secretary;
    ``(ii) incorporates feedback from consumers
    and their representatives, disability
    organizations, providers, families of disabled or
    elderly individuals, members of the community, and
    others and maximizes consumer independence and
    consumer control;
    ``(iii) monitors the health and well-being of
    each individual who receives home and community-
    based attendant services and supports, including a
    process for the mandatory reporting,
    investigation, and resolution of allegations of
    neglect, abuse, or exploitation in connection with
    the provision of such services and supports; and
    ``(iv) provides information about the
    provisions of the quality assurance required under
    clauses (i) through (iii) to each individual
    receiving such services; and
    ``(E) <>  collect and
    report information, as determined necessary by the
    Secretary, for the purposes of approving the State plan
    amendment, providing Federal oversight, and conducting
    an evaluation under paragraph (5)(A), including data
    regarding how the State provides home and community-
    based attendant services and supports and other home and
    community-based services, the cost of such services and
    supports, and how the State provides individuals with
    disabilities who otherwise qualify for institutional
    care under the State plan or under a waiver the choice
    to instead receive home and community-based services in
    lieu of institutional care.
    ``(4) Compliance with certain laws.--A State shall ensure
    that, regardless of whether the State uses an agency-provider
    model or other models to provide home and community-based
    attendant services and supports under a State plan

    [[Page 300]]

    amendment under this subsection, such services and supports are
    provided in accordance with the requirements of the Fair Labor
    Standards Act of 1938 and applicable Federal and State laws
    regarding--
    ``(A) withholding and payment of Federal and State
    income and payroll taxes;
    ``(B) the provision of unemployment and workers
    compensation insurance;
    ``(C) maintenance of general liability insurance;
    and
    ``(D) occupational health and safety.
    ``(5) Evaluation, data collection, and report to congress.--
    ``(A) Evaluation.--The Secretary shall conduct an
    evaluation of the provision of home and community-based
    attendant services and supports under this subsection in
    order to determine the effectiveness of the provision of
    such services and supports in allowing the individuals
    receiving such services and supports to lead an
    independent life to the maximum extent possible; the
    impact on the physical and emotional health of the
    individuals who receive such services; and an
    comparative analysis of the costs of services provided
    under the State plan amendment under this subsection and
    those provided under institutional care in a nursing
    facility, institution for mental diseases, or an
    intermediate care facility for the mentally retarded.
    ``(B) Data collection.--The State shall provide the
    Secretary with the following information regarding the
    provision of home and community-based attendant services
    and supports under this subsection for each fiscal year
    for which such services and supports are provided:
    ``(i) The number of individuals who are
    estimated to receive home and community-based
    attendant services and supports under this
    subsection during the fiscal year.
    ``(ii) The number of individuals that received
    such services and supports during the preceding
    fiscal year.
    ``(iii) The specific number of individuals
    served by type of disability, age, gender,
    education level, and employment status.
    ``(iv) Whether the specific individuals have
    been previously served under any other home and
    community based services program under the State
    plan or under a waiver.
    ``(C) Reports.--Not later than--
    ``(i) December 31, 2013, the Secretary shall
    submit to Congress and make available to the
    public an interim report on the findings of the
    evaluation under subparagraph (A); and
    ``(ii) December 31, 2015, the Secretary shall
    submit to Congress and make available to the
    public a final report on the findings of the
    evaluation under subparagraph (A).
    ``(6) Definitions.--In this subsection:
    ``(A) Activities of daily living.--The term
    `activities of daily living' includes tasks such as
    eating, toileting, grooming, dressing, bathing, and
    transferring.

    [[Page 301]]

    ``(B) Consumer controlled.--The term `consumer
    controlled' means a method of selecting and providing
    services and supports that allow the individual, or
    where appropriate, the individual's representative,
    maximum control of the home and community-based
    attendant services and supports, regardless of who acts
    as the employer of record.
    ``(C) Delivery models.--
    ``(i) Agency-provider model.--The term
    `agency-provider model' means, with respect to the
    provision of home and community-based attendant
    services and supports for an individual, subject
    to paragraph (4), a method of providing consumer
    controlled services and supports under which
    entities contract for the provision of such
    services and supports.
    ``(ii) Other models.--The term `other models'
    means, subject to paragraph (4), methods, other
    than an agency-provider model, for the provision
    of consumer controlled services and supports. Such
    models may include the provision of vouchers,
    direct cash payments, or use of a fiscal agent to
    assist in obtaining services.
    ``(D) Health-related tasks.--The term `health-
    related tasks' means specific tasks related to the needs
    of an individual, which can be delegated or assigned by
    licensed health-care professionals under State law to be
    performed by an attendant.
    ``(E) Individual's representative.--The term
    `individual's representative' means a parent, family
    member, guardian, advocate, or other authorized
    representative of an individual
    ``(F) Instrumental activities of daily living.--The
    term `instrumental activities of daily living' includes
    (but is not limited to) meal planning and preparation,
    managing finances, shopping for food, clothing, and
    other essential items, performing essential household
    chores, communicating by phone or other media, and
    traveling around and participating in the community.''.

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

    (a) <>  Oversight and Assessment of the
    Administration of Home and Community-based Services.--
    <> The Secretary of Health and Human Services shall
    promulgate regulations to ensure that all States develop service systems
    that are designed to--
    (1) allocate resources for services in a manner that is
    responsive to the changing needs and choices of beneficiaries
    receiving non-institutionally-based long-term services and
    supports (including such services and supports that are provided
    under programs other the State Medicaid program), and that
    provides strategies for beneficiaries receiving such services to
    maximize their independence, including through the use of
    client-employed providers;
    (2) provide the support and coordination needed for a
    beneficiary in need of such services (and their family
    caregivers or representative, if applicable) to design an
    individualized, self-directed, community-supported life; and

    [[Page 302]]

    (3) improve coordination among, and the regulation of, all
    providers of such services under federally and State-funded
    programs in order to--
    (A) achieve a more consistent administration of
    policies and procedures across programs in relation to
    the provision of such services; and
    (B) oversee and monitor all service system functions
    to assure--
    (i) coordination of, and effectiveness of,
    eligibility determinations and individual
    assessments;
    (ii) development and service monitoring of a
    complaint system, a management system, a system to
    qualify and monitor providers, and systems for
    role-setting and individual budget determinations;
    and
    (iii) an adequate number of qualified direct
    care workers to provide self-directed personal
    assistance services.

    (b) Additional State Options.--Section 1915(i) of the Social
    Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the
    following new paragraphs:
    ``(6) State option to provide home and community-based
    services to individuals eligible for services under a waiver.--
    ``(A) In general.--A State that provides home and
    community-based services in accordance with this
    subsection to individuals who satisfy the needs-based
    criteria for the receipt of such services established
    under paragraph (1)(A) may, in addition to continuing to
    provide such services to such individuals, elect to
    provide home and community-based services in accordance
    with the requirements of this paragraph to individuals
    who are eligible for home and community-based services
    under a waiver approved for the State under subsection
    (c), (d), or (e) or under section 1115 to provide such
    services, but only for those individuals whose income
    does not exceed 300 percent of the supplemental security
    income benefit rate established by section 1611(b)(1).
    ``(B) Application of same requirements for
    individuals satisfying needs-based criteria.--Subject to
    subparagraph (C), a State shall provide home and
    community-based services to individuals under this
    paragraph in the same manner and subject to the same
    requirements as apply under the other paragraphs of this
    subsection to the provision of home and community-based
    services to individuals who satisfy the needs-based
    criteria established under paragraph (1)(A).
    ``(C) Authority to offer different type, amount,
    duration, or scope of home and community-based
    services.--A State may offer home and community-based
    services to individuals under this paragraph that differ
    in type, amount, duration, or scope from the home and
    community-based services offered for individuals who
    satisfy the needs-based criteria established under
    paragraph (1)(A), so long as such services are within
    the scope of services described in paragraph (4)(B) of
    subsection (c) for which the Secretary has the authority
    to approve a waiver and do not include room or board.

    [[Page 303]]

    ``(7) State option to offer home and community-based
    services to specific, targeted populations.--
    ``(A) In general.--A State may elect in a State plan
    amendment under this subsection to target the provision
    of home and community-based services under this
    subsection to specific populations and to differ the
    type, amount, duration, or scope of such services to
    such specific populations.
    ``(B) 5-year term.--
    ``(i) In general.--An election by a State
    under this paragraph shall be for a period of 5
    years.
    ``(ii) Phase-in of services and eligibility
    permitted during initial 5-year period.--A State
    making an election under this paragraph may,
    during the first 5-year period for which the
    election is made, phase-in the enrollment of
    eligible individuals, or the provision of services
    to such individuals, or both, so long as all
    eligible individuals in the State for such
    services are enrolled, and all such services are
    provided, before the end of the initial 5-year
    period.
    ``(C) Renewal. <> --An election by a
    State under this paragraph may be renewed for additional
    5-year terms if the Secretary determines, prior to
    beginning of each such renewal period, that the State
    has--
    ``(i) adhered to the requirements of this
    subsection and paragraph in providing services
    under such an election; and
    ``(ii) met the State's objectives with respect
    to quality improvement and beneficiary
    outcomes.''.

    (c) Removal of Limitation on Scope of Services.--Paragraph (1) of
    section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as
    amended by subsection (a), is amended by striking ``or such other
    services requested by the State as the Secretary may approve''.
    (d) Optional Eligibility Category To Provide Full Medicaid Benefits
    to Individuals Receiving Home and Community-based Services Under a State
    Plan Amendment.--
    (1) In general.--Section 1902(a)(10)(A)(ii) of the Social
    Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by
    section 2304(a)(1), is amended--
    (A) in subclause (XX), by striking ``or'' at the
    end;
    (B) in subclause (XXI), by adding ``or'' at the end;
    and
    (C) by inserting after subclause (XXI), the
    following new subclause:
    ``(XXII) who are eligible for home
    and community-based services under
    needs-based criteria established under
    paragraph (1)(A) of section 1915(i), or
    who are eligible for home and community-
    based services under paragraph (6) of
    such section, and who will receive home
    and community-based services pursuant to
    a State plan amendment under such
    subsection;''.
    (2) Conforming amendments.--
    (A) Section 1903(f)(4) of the Social Security Act
    (42 U.S.C. 1396b(f)(4)), as amended by section
    2304(a)(4)(B), is amended in the matter preceding
    subparagraph (A),

    [[Page 304]]

    by inserting ``1902(a)(10)(A)(ii)(XXII),'' after
    ``1902(a)(10)(A)(ii)(XXI),''.
    (B) Section 1905(a) of the Social Security Act (42
    U.S.C. 1396d(a)), as so amended, is amended in the
    matter preceding paragraph (1)--
    (i) in clause (xv), by striking ``or'' at the
    end;
    (ii) in clause (xvi), by adding ``or'' at the
    end; and
    (iii) by inserting after clause (xvi) the
    following new clause:
    ``(xvii) individuals who are eligible for home and
    community-based services under needs-based criteria established
    under paragraph (1)(A) of section 1915(i), or who are eligible
    for home and community-based services under paragraph (6) of
    such section, and who will receive home and community-based
    services pursuant to a State plan amendment under such
    subsection,''.

    (e) Elimination of Option To Limit Number of Eligible Individuals or
    Length of Period for Grandfathered Individuals if Eligibility Criteria
    Is Modified.--Paragraph (1) of section 1915(i) of such Act (42 U.S.C.
    1396n(i)) is amended--
    (1) by striking subparagraph (C) and inserting the
    following:
    ``(C) Projection of number of individuals to be
    provided home and community-based services.--The State
    submits to the Secretary, in such form and manner, and
    upon such frequency as the Secretary shall specify, the
    projected number of individuals to be provided home and
    community-based services.''; and
    (2) in subclause (II) of subparagraph (D)(ii), by striking
    ``to be eligible for such services for a period of at least 12
    months beginning on the date the individual first received
    medical assistance for such services'' and inserting ``to
    continue to be eligible for such services after the effective
    date of the modification and until such time as the individual
    no longer meets the standard for receipt of such services under
    such pre-modified criteria''.

    (f) Elimination of Option To Waive Statewideness; Addition of Option
    To Waive Comparability.--Paragraph (3) of section 1915(i) of such Act
    (42 U.S.C. 1396n(3)) is amended by striking ``1902(a)(1) (relating to
    statewideness)'' and inserting ``1902(a)(10)(B) (relating to
    comparability)''.
    (g) <>  Effective Date.--The amendments
    made by subsections (b) through (f) take effect on the first day of the
    first fiscal year quarter that begins after the date of enactment of
    this Act.

    SEC. 2403. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION.

    (a) Extension of Demonstration.--
    (1) In general.--Section 6071(h) of the Deficit Reduction
    Act of 2005 (42 U.S.C. 1396a note) is amended--
    (A) in paragraph (1)(E), by striking ``fiscal year
    2011'' and inserting ``each of fiscal years 2011 through
    2016''; and
    (B) in paragraph (2), by striking ``2011'' and
    inserting ``2016''.

    [[Page 305]]

    (2) Evaluation.--Paragraphs (2) and (3) of section 6071(g)
    of such Act is amended are each amended by striking ``2011'' and
    inserting ``2016''.

    (b) Reduction of Institutional Residency Period.--
    (1) In general.--Section 6071(b)(2) of the Deficit Reduction
    Act of 2005 (42 U.S.C. 1396a note) is amended--
    (A) in subparagraph (A)(i), by striking ``, for a
    period of not less than 6 months or for such longer
    minimum period, not to exceed 2 years, as may be
    specified by the State'' and inserting ``for a period of
    not less than 90 consecutive days''; and
    (B) by adding at the end the following:
    ``Any days that an individual resides in an institution on the
    basis of having been admitted solely for purposes of receiving
    short-term rehabilitative services for a period for which
    payment for such services is limited under title XVIII shall not
    be taken into account for purposes of determining the 90-day
    period required under subparagraph (A)(i).''.
    (2) <>  Effective date.--The
    amendments made by this subsection take effect 30 days after the
    date of enactment of this Act.

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

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

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

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

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

    (a) Findings.--The Senate makes the following findings:
    (1) Nearly 2 decades have passed since Congress seriously
    considered long-term care reform. The United States Bipartisan
    Commission on Comprehensive Health Care, also know as the
    ``Pepper Commission'', released its ``Call for Action''
    blueprint for health reform in September 1990. In the 20 years
    since those recommendations were made, Congress has never acted
    on the report.
    (2) In 1999, under the United States Supreme Court's
    decision in Olmstead v. L.C., 527 U.S. 581 (1999), individuals

    [[Page 306]]

    with disabilities have the right to choose to receive their
    long-term services and supports in the community, rather than in
    an institutional setting.
    (3) Despite the Pepper Commission and Olmstead decision, the
    long-term care provided to our Nation's elderly and disabled has
    not improved. In fact, for many, it has gotten far worse.
    (4) In 2007, 69 percent of Medicaid long-term care spending
    for elderly individuals and adults with physical disabilities
    paid for institutional services. Only 6 states spent 50 percent
    or more of their Medicaid long-term care dollars on home and
    community-based services for elderly individuals and adults with
    physical disabilities while \1/2\ of the States spent less than
    25 percent. This disparity continues even though, on average, it
    is estimated that Medicaid dollars can support nearly 3 elderly
    individuals and adults with physical disabilities in home and
    community-based services for every individual in a nursing home.
    Although every State has chosen to provide certain services
    under home and community-based waivers, these services are
    unevenly available within and across States, and reach a small
    percentage of eligible individuals.

    (b) Sense of the Senate.--It is the sense of the Senate that--
    (1) during the 111th session of Congress, Congress should
    address long-term services and supports in a comprehensive way
    that guarantees elderly and disabled individuals the care they
    need; and
    (2) long term services and supports should be made available
    in the community in addition to in institutions.

    Subtitle F--Medicaid Prescription Drug Coverage

    SEC. 2501. PRESCRIPTION DRUG REBATES.

    (a) Increase in Minimum Rebate Percentage for Single Source Drugs
    and Innovator Multiple Source Drugs.--
    (1) In general.--Section 1927(c)(1)(B) of the Social
    Security Act (42 U.S.C. 1396r-8(c)(1)(B)) is amended--
    (A) in clause (i)--
    (i) in subclause (IV), by striking ``and'' at
    the end;
    (ii) in subclause (V)--
    (I) by inserting ``and before
    January 1, 2010'' after ``December 31,
    1995,''; and
    (II) by striking the period at the
    end and inserting ``; and''; and
    (iii) by adding at the end the following new
    subclause:
    ``(VI) except as provided in clause
    (iii), after December 31, 2009, 23.1
    percent.''; and
    (B) by adding at the end the following new clause:
    ``(iii) Minimum rebate percentage for certain
    drugs.--
    ``(I) In general.--In the case of a
    single source drug or an innovator
    multiple source drug described in
    subclause (II), the minimum rebate
    percentage for rebate periods specified
    in clause (i)(VI) is 17.1 percent.

    [[Page 307]]

    ``(II) Drug described.--For purposes
    of subclause (I), a single source drug
    or an innovator multiple source drug
    described in this subclause is any of
    the following drugs:
    ``(aa) A clotting factor for
    which a separate furnishing
    payment is made under section
    1842(o)(5) and which is included
    on a list of such factors
    specified and updated regularly
    by the Secretary.
    ``(bb) A drug approved by
    the Food and Drug Administration
    exclusively for pediatric
    indications.''.
    (2) Recapture of total savings due to increase.--Section
    1927(b)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended by
    adding at the end the following new subparagraph:
    ``(C) Special rule for increased minimum rebate
    percentage.--
    ``(i) In general. <> --In
    addition to the amounts applied as a reduction
    under subparagraph (B), for rebate periods
    beginning on or after January 1, 2010, during a
    fiscal year, the Secretary shall reduce payments
    to a State under section 1903(a) in the manner
    specified in clause (ii), in an amount equal to
    the product of--
    ``(I) 100 percent minus the Federal
    medical assistance percentage applicable
    to the rebate period for the State; and
    ``(II) the amounts received by the
    State under such subparagraph that are
    attributable (as estimated by the
    Secretary based on utilization and other
    data) to the increase in the minimum
    rebate percentage effected by the
    amendments made by subsections (a)(1),
    (b), and (d) of section 2501 of the
    Patient Protection and Affordable Care
    Act, taking into account the additional
    drugs included under the amendments made
    by subsection (c) of section 2501 of
    such Act.
    <> The Secretary shall
    adjust such payment reduction for a calendar
    quarter to the extent the Secretary determines,
    based upon subsequent utilization and other data,
    that the reduction for such quarter was greater or
    less than the amount of payment reduction that
    should have been made.
    ``(ii) Manner of payment reduction.--The
    amount of the payment reduction under clause (i)
    for a State for a quarter shall be deemed an
    overpayment to the State under this title to be
    disallowed against the State's regular quarterly
    draw for all Medicaid spending under section
    1903(d)(2). Such a disallowance is not subject to
    a reconsideration under section 1116(d).''.

    (b) Increase in Rebate for Other Drugs.--Section 1927(c)(3)(B) of
    such Act (42 U.S.C. 1396r-8(c)(3)(B)) is amended--
    (1) in clause (i), by striking ``and'' at the end;
    (2) in clause (ii)--
    (A) by inserting ``and before January 1, 2010,''
    after ``December 31, 1993,''; and

    [[Page 308]]

    (B) by striking the period and inserting ``; and'';
    and
    (3) by adding at the end the following new clause:
    ``(iii) after December 31, 2009, is 13
    percent.''.

    (c) Extension of Prescription Drug Discounts to Enrollees of
    Medicaid Managed Care Organizations.--
    (1) In general.--Section 1903(m)(2)(A) of such Act (42
    U.S.C. 1396b(m)(2)(A)) is amended--
    (A) in clause (xi), by striking ``and'' at the end;
    (B) in clause (xii), by striking the period at the
    end and inserting ``; and''; and
    (C) by adding at the end the following:

    ``(xiii) <>  such contract provides that (I) covered
    outpatient drugs dispensed to individuals eligible
    for medical assistance who are enrolled with the
    entity shall be subject to the same rebate
    required by the agreement entered into under
    section 1927 as the State is subject to and that
    the State shall collect such rebates from
    manufacturers, (II) capitation rates paid to the
    entity shall be based on actual cost experience
    related to rebates and subject to the Federal
    regulations requiring actuarially sound rates, and
    (III) the entity shall report to the State, on
    such timely and periodic basis as specified by the
    Secretary in order to include in the information
    submitted by the State to a manufacturer and the
    Secretary under section 1927(b)(2)(A), information
    on the total number of units of each dosage form
    and strength and package size by National Drug
    Code of each covered outpatient drug dispensed to
    individuals eligible for medical assistance who
    are enrolled with the entity and for which the
    entity is responsible for coverage of such drug
    under this subsection (other than covered
    outpatient drugs that under subsection (j)(1) of
    section 1927 are not subject to the requirements
    of that section) and such other data as the
    Secretary determines necessary to carry out this
    subsection.''.
    (2) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-8)
    is amended--
    (A) in subsection (b)--
    (i) in paragraph (1)(A), in the first
    sentence, by inserting ``, including such drugs
    dispensed to individuals enrolled with a medicaid
    managed care organization if the organization is
    responsible for coverage of such drugs'' before
    the period; and
    (ii) in paragraph (2)(A), by inserting
    ``including such information reported by each
    medicaid managed care organization,'' after ``for
    which payment was made under the plan during the
    period,''; and
    (B) in subsection (j), by striking paragraph (1) and
    inserting the following:
    ``(1) Covered outpatient drugs are not subject to the
    requirements of this section if such drugs are--
    ``(A) dispensed by health maintenance organizations,
    including Medicaid managed care organizations that
    contract under section 1903(m); and
    ``(B) subject to discounts under section 340B of the
    Public Health Service Act.''.

    [[Page 309]]

    (d) Additional Rebate for New Formulations of Existing Drugs.--
    (1) In general.--Section 1927(c)(2) of the Social Security
    Act (42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end
    the following new subparagraph:
    ``(C) Treatment of new formulations.--
    ``(i) In general.--Except as provided in
    clause (ii), in the case of a drug that is a new
    formulation, such as an extended-release
    formulation, of a single source drug or an
    innovator multiple source drug, the rebate
    obligation with respect to the drug under this
    section shall be the amount computed under this
    section for the new formulation of the drug or, if
    greater, the product of--
    ``(I) the average manufacturer price
    for each dosage form and strength of the
    new formulation of the single source
    drug or innovator multiple source drug;
    ``(II) the highest additional rebate
    (calculated as a percentage of average
    manufacturer price) under this section
    for any strength of the original single
    source drug or innovator multiple source
    drug; and
    ``(III) the total number of units of
    each dosage form and strength of the new
    formulation paid for under the State
    plan in the rebate period (as reported
    by the State).
    ``(ii) No application to new formulations of
    orphan drugs.--Clause (i) shall not apply to a new
    formulation of a covered outpatient drug that is
    or has been designated under section 526 of the
    Federal Food, Drug, and Cosmetic Act (21 U.S.C.
    360bb) for a rare disease or condition, without
    regard to whether the period of market exclusivity
    for the drug under section 527 of such Act has
    expired or the specific indication for use of the
    drug.''.
    (2) <>  Effective date.--The
    amendment made by paragraph (1) shall apply to drugs that are
    paid for by a State after December 31, 2009.

    (e) Maximum Rebate Amount.--Section 1927(c)(2) of such Act (42
    U.S.C. 1396r-8(c)(2)), as amended by subsection (d), is amended by
    adding at the end the following new subparagraph:
    ``(D) Maximum rebate amount.--In no case shall the
    sum of the amounts applied under paragraph (1)(A)(ii)
    and this paragraph with respect to each dosage form and
    strength of a single source drug or an innovator
    multiple source drug for a rebate period beginning after
    December 31, 2009, exceed 100 percent of the average
    manufacturer price of the drug.''.

    (f) Conforming Amendments.--
    (1) In general.--Section 340B of the Public Health Service
    Act (42 U.S.C. 256b) is amended--
    (A) in subsection (a)(2)(B)(i), by striking
    ``1927(c)(4)'' and inserting ``1927(c)(3)''; and
    (B) by striking subsection (c); and
    (C) redesignating subsection (d) as subsection (c).

    [[Page 310]]

    (2) <>  Effective date.--The
    amendments made by this subsection take effect on January 1,
    2010.

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

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

    (b) <>  Effective Date.--The amendments
    made by this section shall apply to services furnished on or after
    January 1, 2014.

    SEC. 2503. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT.

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

    [[Page 311]]

    ``(B) Exclusion of customary prompt pay discounts
    and other payments.--
    ``(i) In general.--The average manufacturer
    price for a covered outpatient drug shall
    exclude--
    ``(I) customary prompt pay discounts
    extended to wholesalers;
    ``(II) bona fide service fees paid
    by manufacturers to wholesalers or
    retail community pharmacies, including
    (but not limited to) distribution
    service fees, inventory management fees,
    product stocking allowances, and fees
    associated with administrative services
    agreements and patient care programs
    (such as medication compliance programs
    and patient education programs);
    ``(III) reimbursement by
    manufacturers for recalled, damaged,
    expired, or otherwise unsalable returned
    goods, including (but not limited to)
    reimbursement for the cost of the goods
    and any reimbursement of costs
    associated with return goods handling
    and processing, reverse logistics, and
    drug destruction; and
    ``(IV) payments received from, and
    rebates or discounts provided to,
    pharmacy benefit managers, managed care
    organizations, health maintenance
    organizations, insurers, hospitals,
    clinics, mail order pharmacies, long
    term care providers, manufacturers, or
    any other entity that does not conduct
    business as a wholesaler or a retail
    community pharmacy.
    ``(ii) Inclusion of other discounts and
    payments.--Notwithstanding clause (i), any other
    discounts, rebates, payments, or other financial
    transactions that are received by, paid by, or
    passed through to, retail community pharmacies
    shall be included in the average manufacturer
    price for a covered outpatient drug.''; and
    (C) in subparagraph (C), by striking ``the retail
    pharmacy class of trade'' and inserting ``retail
    community pharmacies''.
    (3) Definition of multiple source drug.--Section 1927(k)(7)
    of such Act (42 U.S.C. 1396r-8(k)(7)) is amended--
    (A) in subparagraph (A)(i)(III), by striking ``the
    State'' and inserting ``the United States''; and
    (B) in subparagraph (C)--
    (i) in clause (i), by inserting ``and'' after
    the semicolon;
    (ii) in clause (ii), by striking ``; and'' and
    inserting a period; and
    (iii) by striking clause (iii).
    (4) Definitions of retail community pharmacy; wholesaler.--
    Section 1927(k) of such Act (42 U.S.C. 1396r-8(k)) is amended by
    adding at the end the following new paragraphs:
    ``(10) Retail community pharmacy.--The term `retail
    community pharmacy' means an independent pharmacy, a chain
    pharmacy, a supermarket pharmacy, or a mass merchandiser
    pharmacy that is licensed as a pharmacy by the State and that
    dispenses medications to the general public at retail

    [[Page 312]]

    prices. Such term does not include a pharmacy that dispenses
    prescription medications to patients primarily through the mail,
    nursing home pharmacies, long-term care facility pharmacies,
    hospital pharmacies, clinics, charitable or not-for-profit
    pharmacies, government pharmacies, or pharmacy benefit managers.
    ``(11) Wholesaler.--The term `wholesaler' means a drug
    wholesaler that is engaged in wholesale distribution of
    prescription drugs to retail community pharmacies, including
    (but not limited to) manufacturers, repackers, distributors,
    own-label distributors, private-label distributors, jobbers,
    brokers, warehouses (including manufacturer's and distributor's
    warehouses, chain drug warehouses, and wholesale drug
    warehouses) independent wholesale drug traders, and retail
    community pharmacies that conduct wholesale distributions.''.

    (b) Disclosure of Price Information to the Public.--Section
    1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
    (1) in subparagraph (A)--
    (A) in the first sentence, by inserting after clause
    (iii) the following:
    ``(iv) not later than 30 days after the last
    day of each month of a rebate period under the
    agreement, on the manufacturer's total number of
    units that are used to calculate the monthly
    average manufacturer price for each covered
    outpatient drug;''; and
    (B) in the second sentence, by inserting ``(relating
    to the weighted average of the most recently reported
    monthly average manufacturer prices)'' after ``(D)(v)'';
    and
    (2) in subparagraph (D)(v), by striking ``average
    manufacturer prices'' and inserting ``the weighted average of
    the most recently reported monthly average manufacturer prices
    and the average retail survey price determined for each multiple
    source drug in accordance with subsection (f)''.

    (c) Clarification of Application of Survey of Retail Prices.--
    Section 1927(f)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended--
    (1) in subparagraph (A)(i), by inserting ``with respect to a
    retail community pharmacy,'' before ``the determination''; and
    (2) in subparagraph (C)(ii), by striking ``retail
    pharmacies'' and inserting ``retail community pharmacies''.

    (d) <>  Effective Date.--The amendments
    made by this section shall take effect on the first day of the first
    calendar year quarter that begins at least 180 days after the date of
    enactment of this Act, without regard to whether or not final
    regulations to carry out such amendments have been promulgated by such
    date.

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

    SEC. 2551. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS.

    (a) In General.--Section 1923(f) of the Social Security Act (42
    U.S.C. 1396r-4(f)) is amended--
    (1) in paragraph (1), by striking ``and (3)'' and inserting
    ``, (3), and (7)'';
    (2) in paragraph (3)(A), by striking ``paragraph (6)'' and
    inserting ``paragraphs (6) and (7)'';

    [[Page 313]]

    (3) by redesignating paragraph (7) as paragraph (8); and
    (4) by inserting after paragraph (6) the following new
    paragraph:
    ``(7) Reduction of state dsh allotments once reduction in
    uninsured threshold reached.--
    ``(A) In general.--Subject to subparagraph (E), the
    DSH allotment for a State for fiscal years beginning
    with the fiscal year described in subparagraph (C) (with
    respect to the State), is equal to--
    ``(i) in the case of the first fiscal year
    described in subparagraph (C) with respect to a
    State, the DSH allotment that would be determined
    under this subsection for the State for the fiscal
    year without application of this paragraph (but
    after the application of subparagraph (D)),
    reduced by the applicable percentage determined
    for the State for the fiscal year under
    subparagraph (B)(i); and
    ``(ii) in the case of any subsequent fiscal
    year with respect to the State, the DSH allotment
    determined under this paragraph for the State for
    the preceding fiscal year, reduced by the
    applicable percentage determined for the State for
    the fiscal year under subparagraph (B)(ii).
    ``(B) Applicable percentage.--For purposes of
    subparagraph (A), the applicable percentage for a State
    for a fiscal year is the following:
    ``(i) Uninsured reduction threshold fiscal
    year.--In the case of the first fiscal year
    described in subparagraph (C) with respect to the
    State--
    ``(I) if the State is a low DSH
    State described in paragraph (5)(B), the
    applicable percentage is equal to 25
    percent; and
    ``(II) if the State is any other
    State, the applicable percentage is 50
    percent.
    ``(ii) Subsequent fiscal years in which the
    percentage of uninsured
    decreases <> .--In the case
    of any fiscal year after the first fiscal year
    described in subparagraph (C) with respect to a
    State, if the Secretary determines on the basis of
    the most recent American Community Survey of the
    Bureau of the Census, that the percentage of
    uncovered individuals residing in the State is
    less than the percentage of such individuals
    determined for the State for the preceding fiscal
    year--
    ``(I) if the State is a low DSH
    State described in paragraph (5)(B), the
    applicable percentage is equal to the
    product of the percentage reduction in
    uncovered individuals for the fiscal
    year from the preceding fiscal year and
    25 percent; and
    ``(II) if the State is any other
    State, the applicable percentage is
    equal to the product of the percentage
    reduction in uncovered individuals for
    the fiscal year from the preceding
    fiscal year and 50 percent.
    ``(C) Fiscal year
    described. <> --For purposes of
    subparagraph (A), the fiscal year described in this
    subparagraph with respect to a State is the first fiscal
    year that

    [[Page 314]]

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

    (b) <>  Effective Date.--The amendments
    made by subsection (a) take effect on October 1, 2011.

    Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

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

    (a) In General.--Section 1915(h) of the Social Security Act (42
    U.S.C. 1396n(h)) is amended--
    (1) by inserting ``(1)'' after ``(h)'';
    (2) by inserting ``, or a waiver described in paragraph
    (2)'' after ``(e)''; and
    (3) by adding at the end the following new paragraph:

    ``(2)(A) <>  Notwithstanding subsections
    (c)(3) and (d) (3), any waiver under subsection (b), (c), or (d), or a
    waiver under section 1115, that provides medical assistance for dual
    eligible individuals (including any such waivers under which non dual
    eligible individuals may be enrolled in addition to dual eligible
    individuals) may be conducted for a period of 5 years and, upon the
    request of the State, may be extended for additional 5-year periods
    unless the Secretary determines that for the previous waiver period the
    conditions for the waiver have not been met or it would no longer be
    cost-effective and efficient, or consistent with the purposes of this
    title, to extend the waiver.

    [[Page 315]]

    ``(B) <>  In this paragraph, the term `dual
    eligible individual' means an individual who is entitled to, or enrolled
    for, benefits under part A of title XVIII, or enrolled for benefits
    under part B of title XVIII, and is eligible for medical assistance
    under the State plan under this title or under a waiver of such plan.''.

    (b) Conforming Amendments.--
    (1) Section 1915 of such Act (42 U.S.C. 1396n) is amended--
    (A) in subsection (b), by adding at the end the
    following new sentence: ``Subsection (h)(2) shall apply
    to a waiver under this subsection.'';
    (B) in subsection (c)(3), in the second sentence, by
    inserting ``(other than a waiver described in subsection
    (h)(2))'' after ``A waiver under this subsection'';
    (C) in subsection (d)(3), in the second sentence, by
    inserting ``(other than a waiver described in subsection
    (h)(2))'' after ``A waiver under this subsection''.
    (2) Section 1115 of such Act (42 U.S.C. 1315) is amended--
    (A) in subsection (e)(2), by inserting ``(5 years,
    in the case of a waiver described in section
    1915(h)(2))'' after ``3 years''; and
    (B) in subsection (f)(6), by inserting ``(5 years,
    in the case of a waiver described in section
    1915(h)(2))'' after ``3 years''.

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

    (a) Establishment of Federal Coordinated Health Care Office.--
    (1) In general.-- <> Not later than March
    1, 2010, the Secretary of Health and Human Services (in this
    section referred to as the ``Secretary'') shall establish a
    Federal Coordinated Health Care Office.
    (2) Establishment and reporting to cms administrator.--The
    Federal Coordinated Health Care Office--
    (A) shall be established within the Centers for
    Medicare & Medicaid Services; and
    (B) <>  have as the Office a
    Director who shall be appointed by, and be in direct
    line of authority to, the Administrator of the Centers
    for Medicare & Medicaid Services.

    (b) Purpose.--The purpose of the Federal Coordinated Health Care
    Office is to bring together officers and employees of the Medicare and
    Medicaid programs at the Centers for Medicare & Medicaid Services in
    order to--
    (1) more effectively integrate benefits under the Medicare
    program under title XVIII of the Social Security Act and the
    Medicaid program under title XIX of such Act; and
    (2) improve the coordination between the Federal Government
    and States for individuals eligible for benefits under both such
    programs in order to ensure that such individuals get full
    access to the items and services to which they are entitled
    under titles XVIII and XIX of the Social Security Act.

    (c) Goals.--The goals of the Federal Coordinated Health Care Office
    are as follows:
    (1) Providing dual eligible individuals full access to the
    benefits to which such individuals are entitled under the
    Medicare and Medicaid programs.

    [[Page 316]]

    (2) Simplifying the processes for dual eligible individuals
    to access the items and services they are entitled to under the
    Medicare and Medicaid programs.
    (3) Improving the quality of health care and long-term
    services for dual eligible individuals.
    (4) Increasing dual eligible individuals' understanding of
    and satisfaction with coverage under the Medicare and Medicaid
    programs.
    (5) Eliminating regulatory conflicts between rules under the
    Medicare and Medicaid programs.
    (6) Improving care continuity and ensuring safe and
    effective care transitions for dual eligible individuals.
    (7) Eliminating cost-shifting between the Medicare and
    Medicaid program and among related health care providers.
    (8) Improving the quality of performance of providers of
    services and suppliers under the Medicare and Medicaid programs.

    (d) Specific Responsibilities.--The specific responsibilities of the
    Federal Coordinated Health Care Office are as follows:
    (1) Providing States, specialized MA plans for special needs
    individuals (as defined in section 1859(b)(6) of the Social
    Security Act (42 U.S.C. 1395w-28(b)(6))), physicians and other
    relevant entities or individuals with the education and tools
    necessary for developing programs that align benefits under the
    Medicare and Medicaid programs for dual eligible individuals.
    (2) Supporting State efforts to coordinate and align acute
    care and long-term care services for dual eligible individuals
    with other items and services furnished under the Medicare
    program.
    (3) Providing support for coordination of contracting and
    oversight by States and the Centers for Medicare & Medicaid
    Services with respect to the integration of the Medicare and
    Medicaid programs in a manner that is supportive of the goals
    described in paragraph (3).
    (4) To consult and coordinate with the Medicare Payment
    Advisory Commission established under section 1805 of the Social
    Security Act (42 U.S.C. 1395b-6) and the Medicaid and CHIP
    Payment and Access Commission established under section 1900 of
    such Act (42 U.S.C. 1396) with respect to policies relating to
    the enrollment in, and provision of, benefits to dual eligible
    individuals under the Medicare program under title XVIII of the
    Social Security Act and the Medicaid program under title XIX of
    such Act.
    (5) To study the provision of drug coverage for new full-
    benefit dual eligible individuals (as defined in section
    1935(c)(6) of the Social Security Act (42 U.S.C. 1396u-5(c)(6)),
    as well as to monitor and report annual total expenditures,
    health outcomes, and access to benefits for all dual eligible
    individuals.

    (e) Report.--The Secretary shall, as part of the budget transmitted
    under section 1105(a) of title 31, United States Code, submit to
    Congress an annual report containing recommendations for legislation
    that would improve care coordination and benefits for dual eligible
    individuals.
    (f) Dual Eligible Defined.--In this section, the term ``dual
    eligible individual'' means an individual who is entitled to, or
    enrolled for, benefits under part A of title XVIII of the Social
    Security Act, or enrolled for benefits under part B of title XVIII

    [[Page 317]]

    of such Act, and is eligible for medical assistance under a State plan
    under title XIX of such Act or under a waiver of such plan.

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

    SEC. 2701. ADULT HEALTH QUALITY MEASURES.

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

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

    ``(a) Development of Core Set of Health Care Quality Measures for
    Adults Eligible for Benefits Under Medicaid.--
    The <> Secretary shall identify and publish a
    recommended core set of adult health quality measures for Medicaid
    eligible adults in the same manner as the Secretary identifies and
    publishes a core set of child health quality measures under section
    1139A, including with respect to identifying and publishing existing
    adult health quality measures that are in use under public and privately
    sponsored health care coverage arrangements, or that are part of
    reporting systems that measure both the presence and duration of health
    insurance coverage over time, that may be applicable to Medicaid
    eligible adults.

    ``(b) Deadlines.--
    ``(1) Recommended measures.-- <> Not
    later than January 1, 2011, the Secretary shall identify and
    publish for comment a recommended core set of adult health
    quality measures for Medicaid eligible adults.
    ``(2) Dissemination.-- <> Not later than
    January 1, 2012, the Secretary shall publish an initial core set
    of adult health quality measures that are applicable to Medicaid
    eligible adults.
    ``(3) Standardized reporting.--Not later than January 1,
    2013, the Secretary, in consultation with States, shall develop
    a standardized format for reporting information based on the
    initial core set of adult health quality measures and create
    procedures to encourage States to use such measures to
    voluntarily report information regarding the quality of health
    care for Medicaid eligible adults.
    ``(4) Reports to congress.--Not later than January 1, 2014,
    and every 3 years thereafter, the Secretary shall include in the
    report to Congress required under section 1139A(a)(6)
    information similar to the information required under that
    section with respect to the measures established under this
    section.
    ``(5) Establishment of medicaid quality measurement
    program.--
    ``(A) In general.--Not later than 12 months after
    the release of the recommended core set of adult health
    quality measures under paragraph (1)), the Secretary
    shall establish a Medicaid Quality Measurement Program
    in the same manner as the Secretary establishes the
    pediatric quality measures program under section
    1139A(b). The aggregate amount awarded by the Secretary
    for grants and contracts for the development, testing,
    and validation of emerging

    [[Page 318]]

    and innovative evidence-based measures under such
    program shall equal the aggregate amount awarded by the
    Secretary for grants under section 1139A(b)(4)(A)
    ``(B) Revising, strengthening, and improving initial
    core measures. <> --Beginning not
    later than 24 months after the establishment of the
    Medicaid Quality Measurement Program, and annually
    thereafter, the Secretary shall publish recommended
    changes to the initial core set of adult health quality
    measures that shall reflect the results of the testing,
    validation, and consensus process for the development of
    adult health quality measures.

    ``(c) Construction.--Nothing in this section shall be construed as
    supporting the restriction of coverage, under title XIX or XXI or
    otherwise, to only those services that are evidence-based, or in anyway
    limiting available services.
    ``(d) Annual State Reports Regarding State-Specific Quality of Care
    Measures Applied Under Medicaid.--
    ``(1) Annual state reports.--Each State with a State plan or
    waiver approved under title XIX shall annually report
    (separately or as part of the annual report required under
    section 1139A(c)), to the Secretary on the--
    ``(A) State-specific adult health quality measures
    applied by the State under the such plan, including
    measures described in subsection (a)(5); and
    ``(B) State-specific information on the quality of
    health care furnished to Medicaid eligible adults under
    such plan, including information collected through
    external quality reviews of managed care organizations
    under section 1932 and benchmark plans under section
    1937.
    ``(2) Publication.-- <> Not later than September 30, 2014, and annually
    thereafter, the Secretary shall collect, analyze, and make
    publicly available the information reported by States under
    paragraph (1).

    ``(e) Appropriation.--Out of any funds in the Treasury not otherwise
    appropriated, there is appropriated for each of fiscal years 2010
    through 2014, $60,000,000 for the purpose of carrying out this section.
    Funds appropriated under this subsection shall remain available until
    expended.''.

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

    (a) In General. <> --The Secretary of Health and Human Services (in this subsection
    referred to as the ``Secretary'') shall identify current State practices
    that prohibit payment for health care-acquired conditions and shall
    incorporate the practices identified, or elements of such practices,
    which the Secretary determines appropriate for application to the
    Medicaid program in regulations. Such regulations shall be effective as
    of July 1, 2011, and shall prohibit payments to States under section
    1903 of the Social Security Act for any amounts expended for providing
    medical assistance for health care-acquired conditions specified in the
    regulations. The regulations shall ensure that the prohibition on
    payment for health care-acquired conditions shall not result in a loss
    of access to care or services for Medicaid beneficiaries.

    Effective
    date.

    (b) Health Care-Acquired Condition. <> --In this
    section. the term ``health care-acquired condition'' means a medical
    condition for which an individual was diagnosed that could be identified

    [[Page 319]]

    by a secondary diagnostic code described in section 1886(d)(4)(D)(iv) of
    the Social Security Act (42 U.S.C. 1395ww(d)(4)(D)(iv)).

    (c) <> Medicare Provisions.--In carrying out
    this section, the Secretary shall apply to State plans (or waivers)
    under title XIX of the Social Security Act the regulations promulgated
    pursuant to section 1886(d)(4)(D) of such Act (42 U.S.C.
    1395ww(d)(4)(D)) relating to the prohibition of payments based on the
    presence of a secondary diagnosis code specified by the Secretary in
    such regulations, as appropriate for the Medicaid program. The Secretary
    may exclude certain conditions identified under title XVIII of the
    Social Security Act for non-payment under title XIX of such Act when the
    Secretary finds the inclusion of such conditions to be inapplicable to
    beneficiaries under title XIX.

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

    (a) State Plan Amendment.--Title XIX of the Social Security Act (42
    U.S.C. 1396a et seq.), as amended by sections 2201 and 2305, is amended
    by adding at the end the following new section:
    ``Sec. 1945. <>  State Option To Provide
    Coordinated Care Through a Health Home for Individuals With Chronic
    Conditions.--

    ``(a) <> In General.--
    Notwithstanding section 1902(a)(1) (relating to statewideness), section
    1902(a)(10)(B) (relating to comparability), and any other provision of
    this title for which the Secretary determines it is necessary to waive
    in order to implement this section, beginning January 1, 2011, a State,
    at its option as a State plan amendment, may provide for medical
    assistance under this title to eligible individuals with chronic
    conditions who select a designated provider (as described under
    subsection (h)(5)), a team of health care professionals (as described
    under subsection (h)(6)) operating with such a provider, or a health
    team (as described under subsection (h)(7)) as the individual's health
    home for purposes of providing the individual with health home services.

    ``(b) Health Home Qualification Standards.--The Secretary shall
    establish standards for qualification as a designated provider for the
    purpose of being eligible to be a health home for purposes of this
    section.
    ``(c) Payments.--
    ``(1) In general.--A State shall provide a designated
    provider, a team of health care professionals operating with
    such a provider, or a health team with payments for the
    provision of health home services to each eligible individual
    with chronic conditions that selects such provider, team of
    health care professionals, or health team as the individual's
    health home. Payments made to a designated provider, a team of
    health care professionals operating with such a provider, or a
    health team for such services shall be treated as medical
    assistance for purposes of section 1903(a), except that, during
    the first 8 fiscal year quarters that the State plan amendment
    is in effect, the Federal medical assistance percentage
    applicable to such payments shall be equal to 90 percent.
    ``(2) Methodology.--
    ``(A) In general.--The State shall specify in the
    State plan amendment the methodology the State will use
    for determining payment for the provision of health home
    services. Such methodology for determining payment--

    [[Page 320]]

    ``(i) may be tiered to reflect, with respect
    to each eligible individual with chronic
    conditions provided such services by a designated
    provider, a team of health care professionals
    operating with such a provider, or a health team,
    as well as the severity or number of each such
    individual's chronic conditions or the specific
    capabilities of the provider, team of health care
    professionals, or health team; and
    ``(ii) shall be established consistent with
    section 1902(a)(30)(A).
    ``(B) Alternate models of payment.--The methodology
    for determining payment for provision of health home
    services under this section shall not be limited to a
    per-member per-month basis and may provide (as proposed
    by the State and subject to approval by the Secretary)
    for alternate models of payment.
    ``(3) Planning grants.--
    ``(A) <> In general.--
    Beginning January 1, 2011, the Secretary may award
    planning grants to States for purposes of developing a
    State plan amendment under this section. A planning
    grant awarded to a State under this paragraph shall
    remain available until expended.
    ``(B) State contribution.--A State awarded a
    planning grant shall contribute an amount equal to the
    State percentage determined under section 1905(b)
    (without regard to section 5001 of Public Law 111-5) for
    each fiscal year for which the grant is awarded.
    ``(C) Limitation.--The total amount of payments made
    to States under this paragraph shall not exceed
    $25,000,000.

    ``(d) Hospital Referrals.--A State shall include in the State plan
    amendment a requirement for hospitals that are participating providers
    under the State plan or a waiver of such plan to establish procedures
    for referring any eligible individuals with chronic conditions who seek
    or need treatment in a hospital emergency department to designated
    providers.
    ``(e) Coordination.--A State shall consult and coordinate, as
    appropriate, with the Substance Abuse and Mental Health Services
    Administration in addressing issues regarding the prevention and
    treatment of mental illness and substance abuse among eligible
    individuals with chronic conditions.
    ``(f) Monitoring.--A State shall include in the State plan
    amendment--
    ``(1) a methodology for tracking avoidable hospital
    readmissions and calculating savings that result from improved
    chronic care coordination and management under this section; and
    ``(2) a proposal for use of health information technology in
    providing health home services under this section and improving
    service delivery and coordination across the care continuum
    (including the use of wireless patient technology to improve
    coordination and management of care and patient adherence to
    recommendations made by their provider).

    ``(g) Report on Quality Measures.--As a condition for receiving
    payment for health home services provided to an eligible individual with
    chronic conditions, a designated provider shall report to the State, in
    accordance with such requirements as the Secretary shall specify, on all
    applicable measures for determining

    [[Page 321]]

    the quality of such services. When appropriate and feasible, a
    designated provider shall use health information technology in providing
    the State with such information.
    ``(h) Definitions.--In this section:
    ``(1) Eligible individual with chronic conditions.--
    ``(A) In general.--Subject to subparagraph (B), the
    term `eligible individual with chronic conditions' means
    an individual who--
    ``(i) is eligible for medical assistance under
    the State plan or under a waiver of such plan; and
    ``(ii) has at least--
    ``(I) 2 chronic conditions;
    ``(II) 1 chronic condition and is at
    risk of having a second chronic
    condition; or
    ``(III) 1 serious and persistent
    mental health condition.
    ``(B) Rule of construction.--Nothing in this
    paragraph shall prevent the Secretary from establishing
    higher levels as to the number or severity of chronic or
    mental health conditions for purposes of determining
    eligibility for receipt of health home services under
    this section.
    ``(2) Chronic condition.--The term `chronic condition' has
    the meaning given that term by the Secretary and shall include,
    but is not limited to, the following:
    ``(A) A mental health condition.
    ``(B) Substance use disorder.
    ``(C) Asthma.
    ``(D) Diabetes.
    ``(E) Heart disease.
    ``(F) Being overweight, as evidenced by having a
    Body Mass Index (BMI) over 25.
    ``(3) Health home.--The term `health home' means a
    designated provider (including a provider that operates in
    coordination with a team of health care professionals) or a
    health team selected by an eligible individual with chronic
    conditions to provide health home services.
    ``(4) Health home services.--
    ``(A) In general.--The term `health home services'
    means comprehensive and timely high-quality services
    described in subparagraph (B) that are provided by a
    designated provider, a team of health care professionals
    operating with such a provider, or a health team.
    ``(B) Services described.--The services described in
    this subparagraph are--
    ``(i) comprehensive care management;
    ``(ii) care coordination and health promotion;
    ``(iii) comprehensive transitional care,
    including appropriate follow-up, from inpatient to
    other settings;
    ``(iv) patient and family support (including
    authorized representatives);
    ``(v) referral to community and social support
    services, if relevant; and
    ``(vi) use of health information technology to
    link services, as feasible and appropriate.
    ``(5) Designated provider.--The term `designated provider'
    means a physician, clinical practice or clinical group practice,
    rural clinic, community health center, community mental health

    [[Page 322]]

    center, home health agency, or any other entity or provider
    (including pediatricians, gynecologists, and obstetricians) that
    is determined by the State and approved by the Secretary to be
    qualified to be a health home for eligible individuals with
    chronic conditions on the basis of documentation evidencing that
    the physician, practice, or clinic--
    ``(A) has the systems and infrastructure in place to
    provide health home services; and
    ``(B) satisfies the qualification standards
    established by the Secretary under subsection (b).
    ``(6) Team of health care professionals.--The term `team of
    health care professionals' means a team of health professionals
    (as described in the State plan amendment) that may--
    ``(A) include physicians and other professionals,
    such as a nurse care coordinator, nutritionist, social
    worker, behavioral health professional, or any
    professionals deemed appropriate by the State; and
    ``(B) be free standing, virtual, or based at a
    hospital, community health center, community mental
    health center, rural clinic, clinical practice or
    clinical group practice, academic health center, or any
    entity deemed appropriate by the State and approved by
    the Secretary.
    ``(7) Health team.--The term `health team' has the meaning
    given such term for purposes of section 3502 of the Patient
    Protection and Affordable Care Act.''.

    (b) Evaluation.--
    (1) Independent evaluation.--
    (A) In general.-- <> The Secretary
    shall enter into a contract with an independent entity
    or organization to conduct an evaluation and assessment
    of the States that have elected the option to provide
    coordinated care through a health home for Medicaid
    beneficiaries with chronic conditions under section 1945
    of the Social Security Act (as added by subsection (a))
    for the purpose of determining the effect of such option
    on reducing hospital admissions, emergency room visits,
    and admissions to skilled nursing facilities.
    (B) Evaluation report.--Not later than January 1,
    2017, the Secretary shall report to Congress on the
    evaluation and assessment conducted under subparagraph
    (A).
    (2) <> Survey and interim
    report.--
    (A) In general.--Not later than January 1, 2014, the
    Secretary of Health and Human Services shall survey
    States that have elected the option under section 1945
    of the Social Security Act (as added by subsection (a))
    and report to Congress on the nature, extent, and use of
    such option, particularly as it pertains to--
    (i) hospital admission rates;
    (ii) chronic disease management;
    (iii) coordination of care for individuals
    with chronic conditions;
    (iv) assessment of program implementation;
    (v) processes and lessons learned (as
    described in subparagraph (B));
    (vi) assessment of quality improvements and
    clinical outcomes under such option; and

    [[Page 323]]

    (vii) estimates of cost savings.
    (B)  Implementation reporting.--A State that has
    elected the option under section 1945 of the Social
    Security Act (as added by subsection (a)) shall report
    to the Secretary, as necessary, on processes that have
    been developed and lessons learned regarding provision
    of coordinated care through a health home for Medicaid
    beneficiaries with chronic conditions under such option.

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

    (a) Authority To Conduct Project.--
    (1) In general.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall
    establish a demonstration project under title XIX of the Social
    Security Act to evaluate the use of bundled payments for the
    provision of integrated care for a Medicaid beneficiary--
    (A) with respect to an episode of care that includes
    a hospitalization; and
    (B) for concurrent physicians services provided
    during a hospitalization.
    (2) Duration.--The demonstration project shall begin on
    January 1, 2012, and shall end on December 31, 2016.

    (b) Requirements.--The demonstration project shall be conducted in
    accordance with the following:
    (1) <>  The demonstration project
    shall be conducted in up to 8 States, determined by the
    Secretary based on consideration of the potential to lower costs
    under the Medicaid program while improving care for Medicaid
    beneficiaries. A State selected to participate in the
    demonstration project may target the demonstration project to
    particular categories of beneficiaries, beneficiaries with
    particular diagnoses, or particular geographic regions of the
    State, but the Secretary shall insure that, as a whole, the
    demonstration project is, to the greatest extent possible,
    representative of the demographic and geographic composition of
    Medicaid beneficiaries nationally.
    (2) The demonstration project shall focus on conditions
    where there is evidence of an opportunity for providers of
    services and suppliers to improve the quality of care furnished
    to Medicaid beneficiaries while reducing total expenditures
    under the State Medicaid programs selected to participate, as
    determined by the Secretary.
    (3) A State selected to participate in the demonstration
    project shall specify the 1 or more episodes of care the State
    proposes to address in the project, the services to be included
    in the bundled payments, and the rationale for the selection of
    such episodes of care and services. The Secretary may modify the
    episodes of care as well as the services to be included in the
    bundled payments prior to or after approving the project. The
    Secretary may also vary such factors among the different States
    participating in the demonstration project.
    (4) The Secretary shall ensure that payments made under the
    demonstration project are adjusted for severity of illness and
    other characteristics of Medicaid beneficiaries within a
    category or having a diagnosis targeted as part of the
    demonstration project. States shall ensure that Medicaid
    beneficiaries are not liable for any additional cost sharing
    than

    [[Page 324]]

    if their care had not been subject to payment under the
    demonstration project.
    (5) Hospitals participating in the demonstration project
    shall have or establish robust discharge planning programs to
    ensure that Medicaid beneficiaries requiring post-acute care are
    appropriately placed in, or have ready access to, post-acute
    care settings.
    (6) The Secretary and each State selected to participate in
    the demonstration project shall ensure that the demonstration
    project does not result in the Medicaid beneficiaries whose care
    is subject to payment under the demonstration project being
    provided with less items and services for which medical
    assistance is provided under the State Medicaid program than the
    items and services for which medical assistance would have been
    provided to such beneficiaries under the State Medicaid program
    in the absence of the demonstration project.

    (c) Waiver of Provisions.--Notwithstanding section 1115(a) of the
    Social Security Act (42 U.S.C. 1315(a)), the Secretary may waive such
    provisions of titles XIX, XVIII, and XI of that Act as may be necessary
    to accomplish the goals of the demonstration, ensure beneficiary access
    to acute and post-acute care, and maintain quality of care.
    (d) Evaluation and Report.--
    (1) Data.--Each State selected to participate in the
    demonstration project under this section shall provide to the
    Secretary, in such form and manner as the Secretary shall
    specify, relevant data necessary to monitor outcomes, costs, and
    quality, and evaluate the rationales for selection of the
    episodes of care and services specified by States under
    subsection (b)(3).
    (2) Report.--Not later than 1 year after the conclusion of
    the demonstration project, the Secretary shall submit a report
    to Congress on the results of the demonstration project.

    SEC. 2705. <>  MEDICAID GLOBAL PAYMENT SYSTEM
    DEMONSTRATION PROJECT.

    (a) In General.--The Secretary of Health and Human Services
    (referred to in this section as the ``Secretary'') shall, in
    coordination with the Center for Medicare and Medicaid Innovation (as
    established under section 1115A of the Social Security Act, as added by
    section 3021 of this Act), establish the Medicaid Global Payment System
    Demonstration Project under which a participating State shall adjust the
    payments made to an eligible safety net hospital system or network from
    a fee-for-service payment structure to a global capitated payment model.
    (b) Duration and Scope.--The demonstration project conducted under
    this section shall operate during a period of fiscal years 2010 through
    2012. <>  The Secretary shall select not more than 5
    States to participate in the demonstration project.

    (c) Eligible Safety Net Hospital System or
    Network. <> --For purposes of this section, the term
    ``eligible safety net hospital system or network'' means a large, safety
    net hospital system or network (as defined by the Secretary) that
    operates within a State selected by the Secretary under subsection (b).

    (d) Evaluation.--
    (1) Testing.--The Innovation Center shall test and evaluate
    the demonstration project conducted under this section

    [[Page 325]]

    to examine any changes in health care quality outcomes and
    spending by the eligible safety net hospital systems or
    networks.
    (2) Budget neutrality.--During the testing period under
    paragraph (1), any budget neutrality requirements under section
    1115A(b)(3) of the Social Security Act (as so added) shall not
    be applicable.
    (3) Modification.--During the testing period under paragraph
    (1), the Secretary may, in the Secretary's discretion, modify or
    terminate the demonstration project conducted under this
    section.

    (e) Report.--Not later than 12 months after the date of completion
    of the demonstration project under this section, the Secretary shall
    submit to Congress a report containing the results of the evaluation and
    testing conducted under subsection (d), together with recommendations
    for such legislation and administrative action as the Secretary
    determines appropriate.
    (f) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.

    SEC. 2706. <> PEDIATRIC ACCOUNTABLE CARE
    ORGANIZATION DEMONSTRATION PROJECT.

    (a) Authority To Conduct Demonstration.--
    (1) In general.--The Secretary of Health and Human Services
    (referred to in this section as the ``Secretary'') shall
    establish the Pediatric Accountable Care Organization
    Demonstration Project to authorize a participating State to
    allow pediatric medical providers that meet specified
    requirements to be recognized as an accountable care
    organization for purposes of receiving incentive payments (as
    described under subsection (d)), in the same manner as an
    accountable care organization is recognized and provided with
    incentive payments under section 1899 of the Social Security Act
    (as added by section 3022).
    (2) Duration.--The demonstration project shall begin on
    January 1, 2012, and shall end on December 31, 2016.

    (b) Application.--A State that desires to participate in the
    demonstration project under this section shall submit to the Secretary
    an application at such time, in such manner, and containing such
    information as the Secretary may require.
    (c) Requirements.--
    (1) Performance guidelines.--The Secretary, in consultation
    with the States and pediatric providers, shall establish
    guidelines to ensure that the quality of care delivered to
    individuals by a provider recognized as an accountable care
    organization under this section is not less than the quality of
    care that would have otherwise been provided to such
    individuals.
    (2) Savings requirement.--A participating State, in
    consultation with the Secretary, shall establish an annual
    minimal level of savings in expenditures for items and services
    covered under the Medicaid program under title XIX of the Social
    Security Act and the CHIP program under title XXI of such Act
    that must be reached by an accountable care organization in
    order for such organization to receive an incentive payment
    under subsection (d).
    (3) <> Minimum participation period.--A
    provider desiring to be recognized as an accountable care
    organization under

    [[Page 326]]

    the demonstration project shall enter into an agreement with the
    State to participate in the project for not less than a 3-year
    period.

    (d) Incentive Payment.--An accountable care organization that meets
    the performance guidelines established by the Secretary under subsection
    (c)(1) and achieves savings greater than the annual minimal savings
    level established by the State under subsection (c)(2) shall receive an
    incentive payment for such year equal to a portion (as determined
    appropriate by the Secretary) of the amount of such excess savings. The
    Secretary may establish an annual cap on incentive payments for an
    accountable care organization.
    (e) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.

    SEC. 2707. <> MEDICAID EMERGENCY PSYCHIATRIC
    DEMONSTRATION PROJECT.

    (a) Authority To Conduct Demonstration Project.--The Secretary of
    Health and Human Services (in this section referred to as the
    ``Secretary'') shall establish a demonstration project under which an
    eligible State (as described in subsection (c)) shall provide payment
    under the State Medicaid plan under title XIX of the Social Security Act
    to an institution for mental diseases that is not publicly owned or
    operated and that is subject to the requirements of section 1867 of the
    Social Security Act (42 U.S.C. 1395dd) for the provision of medical
    assistance available under such plan to individuals who--
    (1) have attained age 21, but have not attained age 65;
    (2) are eligible for medical assistance under such plan; and
    (3) require such medical assistance to stabilize an
    emergency medical condition.

    (b) Stabilization Review.--A State shall specify in its application
    described in subsection (c)(1) establish a mechanism for how it will
    ensure that institutions participating in the demonstration will
    determine whether or not such individuals have been stabilized (as
    defined in subsection (h)(5)). <> This
    mechanism shall commence before the third day of the inpatient stay.
    States participating in the demonstration project may manage the
    provision of services for the stabilization of medical emergency
    conditions through utilization review, authorization, or management
    practices, or the application of medical necessity and appropriateness
    criteria applicable to behavioral health.

    (c) Eligible State Defined.--
    (1) In general.--An eligible State is a State that has made
    an application and has been selected pursuant to paragraphs (2)
    and (3).
    (2) Application.--A State seeking to participate in the
    demonstration project under this section shall submit to the
    Secretary, at such time and in such format as the Secretary
    requires, an application that includes such information,
    provisions, and assurances, as the Secretary may require.
    (3) Selection.--A State shall be determined eligible for the
    demonstration by the Secretary on a competitive basis among
    States with applications meeting the requirements of

    [[Page 327]]

    paragraph (1). In selecting State applications for the
    demonstration project, the Secretary shall seek to achieve an
    appropriate national balance in the geographic distribution of
    such projects.

    (d) Length of Demonstration Project.--The demonstration project
    established under this section shall be conducted for a period of 3
    consecutive years.
    (e) Limitations on Federal Funding.--
    (1) Appropriation.--
    (A) In general.--Out of any funds in the Treasury
    not otherwise appropriated, there is appropriated to
    carry out this section, $75,000,000 for fiscal year
    2011.
    (B) Budget authority.--Subparagraph (A) constitutes
    budget authority in advance of appropriations Act and
    represents the obligation of the Federal Government to
    provide for the payment of the amounts appropriated
    under that subparagraph.
    (2) 5-year availability.--Funds appropriated under paragraph
    (1) shall remain available for obligation through December 31,
    2015.
    (3) Limitation on payments.--In no case may--
    (A) the aggregate amount of payments made by the
    Secretary to eligible States under this section exceed
    $75,000,000; or
    (B) payments be provided by the Secretary under this
    section after December 31, 2015.
    (4) Funds allocated to states.--Funds shall be allocated to
    eligible States on the basis of criteria, including a State's
    application and the availability of funds, as determined by the
    Secretary.
    (5) Payments to states.--The Secretary shall pay to each
    eligible State, from its allocation under paragraph (4), an
    amount each quarter equal to the Federal medical assistance
    percentage of expenditures in the quarter for medical assistance
    described in subsection (a). As a condition of receiving
    payment, a State shall collect and report information, as
    determined necessary by the Secretary, for the purposes of
    providing Federal oversight and conducting an evaluation under
    subsection (f)(1).

    (f) Evaluation and Report to Congress.--
    (1) Evaluation.--The Secretary shall conduct an evaluation
    of the demonstration project in order to determine the impact on
    the functioning of the health and mental health service system
    and on individuals enrolled in the Medicaid program and shall
    include the following:
    (A) An assessment of access to inpatient mental
    health services under the Medicaid program; average
    lengths of inpatient stays; and emergency room visits.
    (B) An assessment of discharge planning by
    participating hospitals.
    (C) An assessment of the impact of the demonstration
    project on the costs of the full range of mental health
    services (including inpatient, emergency and ambulatory
    care).
    (D) An analysis of the percentage of consumers with
    Medicaid coverage who are admitted to inpatient
    facilities as a result of the demonstration project as
    compared to

    [[Page 328]]

    those admitted to these same facilities through other
    means.
    (E) A recommendation regarding whether the
    demonstration project should be continued after December
    31, 2013, and expanded on a national basis.
    (2) Report.--Not later than December 31, 2013, the Secretary
    shall submit to Congress and make available to the public a
    report on the findings of the evaluation under paragraph (1).

    (g) Waiver Authority.--
    (1) In general.--The Secretary shall waive the limitation of
    subdivision (B) following paragraph (28) of section 1905(a) of
    the Social Security Act (42 U.S.C. 1396d(a)) (relating to
    limitations on payments for care or services for individuals
    under 65 years of age who are patients in an institution for
    mental diseases) for purposes of carrying out the demonstration
    project under this section.
    (2) Limited other waiver authority.--The Secretary may waive
    other requirements of titles XI and XIX of the Social Security
    Act (including the requirements of sections 1902(a)(1) (relating
    to statewideness) and 1902(1)(10)(B) (relating to
    comparability)) only to extent necessary to carry out the
    demonstration project under this section.

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

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

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

    (a) In General.--Section 1900 of the Social Security Act (42 U.S.C.
    1396) is amended--
    (1) in subsection (b)--

    [[Page 329]]

    (A) in paragraph (1)--
    (i) in the paragraph heading, by inserting
    ``for all states'' before ``and annual''; and
    (ii) in subparagraph (A), by striking
    ``children's'';
    (iii) in subparagraph (B), by inserting ``,
    the Secretary, and States'' after ``Congress'';
    (iv) in subparagraph (C), by striking ``March
    1'' and inserting ``March 15''; and
    (v) in subparagraph (D), by striking ``June
    1'' and inserting ``June 15'';
    (B) in paragraph (2)--
    (i) in subparagraph (A)--
    (I) in clause (i)--
    (aa) by inserting ``the
    efficient provision of'' after
    ``expenditures for''; and
    (bb) by striking ``hospital,
    skilled nursing facility,
    physician, Federally-qualified
    health center, rural health
    center, and other fees'' and
    inserting ``payments to medical,
    dental, and health
    professionals, hospitals,
    residential and long-term care
    providers, providers of home and
    community based services,
    Federally-qualified health
    centers and rural health
    clinics, managed care entities,
    and providers of other covered
    items and services''; and
    (II) in clause (iii), by inserting
    ``(including how such factors and
    methodologies enable such beneficiaries
    to obtain the services for which they
    are eligible, affect provider supply,
    and affect providers that serve a
    disproportionate share of low-income and
    other vulnerable populations)'' after
    ``beneficiaries'';
    (ii) by redesignating subparagraphs (B) and
    (C) as subparagraphs (F) and (H), respectively;
    (iii) by inserting after subparagraph (A), the
    following:
    ``(B) Eligibility policies.--Medicaid and CHIP
    eligibility policies, including a determination of the
    degree to which Federal and State policies provide
    health care coverage to needy populations.
    ``(C) Enrollment and retention processes.--Medicaid
    and CHIP enrollment and retention processes, including a
    determination of the degree to which Federal and State
    policies encourage the enrollment of individuals who are
    eligible for such programs and screen out individuals
    who are ineligible, while minimizing the share of
    program expenses devoted to such processes.
    ``(D) Coverage policies.--Medicaid and CHIP benefit
    and coverage policies, including a determination of the
    degree to which Federal and State policies provide
    access to the services enrollees require to improve and
    maintain their health and functional status.
    ``(E) Quality of care.--Medicaid and CHIP policies
    as they relate to the quality of care provided under
    those programs, including a determination of the degree
    to which Federal and State policies achieve their stated
    goals and

    [[Page 330]]

    interact with similar goals established by other
    purchasers of health care services.'';
    (iv) by inserting after subparagraph (F) (as
    redesignated by clause (ii) of this subparagraph),
    the following:
    ``(G) Interactions with medicare and medicaid.--
    Consistent with paragraph (11), the interaction of
    policies under Medicaid and the Medicare program under
    title XVIII, including with respect to how such
    interactions affect access to services, payments, and
    dual eligible individuals.'' and
    (v) in subparagraph (H) (as so redesignated),
    by inserting ``and preventive, acute, and long-
    term services and supports'' after ``barriers'';
    (C) by redesignating paragraphs (3) through (9) as
    paragraphs (4) through (10), respectively;
    (D) by inserting after paragraph (2), the following
    new paragraph:
    ``(3) Recommendations and reports of state-specific data.--
    MACPAC shall--
    ``(A) review national and State-specific Medicaid
    and CHIP data; and
    ``(B) submit reports and recommendations to
    Congress, the Secretary, and States based on such
    reviews.'';
    (E) in paragraph (4), as redesignated by
    subparagraph (C), by striking ``or any other problems''
    and all that follows through the period and inserting
    ``, as well as other factors that adversely affect, or
    have the potential to adversely affect, access to care
    by, or the health care status of, Medicaid and CHIP
    beneficiaries. MACPAC shall include in the annual report
    required under paragraph (1)(D) a description of all
    such areas or problems identified with respect to the
    period addressed in the report.'';
    (F) in paragraph (5), as so redesignated,--
    (i) in the paragraph heading, by inserting
    ``and regulations'' after ``reports''; and
    (ii) by striking ``If'' and inserting the
    following:
    ``(A) Certain secretarial reports.--If''; and
    (iii) in the second sentence, by inserting
    ``and the Secretary'' after ``appropriate
    committees of Congress''; and
    (iv) by adding at the end the following:
    ``(B) Regulations.--MACPAC shall review Medicaid and
    CHIP regulations and may comment through submission of a
    report to the appropriate committees of Congress and the
    Secretary, on any such regulations that affect access,
    quality, or efficiency of health care.'';
    (G) in paragraph (10), as so redesignated, by
    inserting `` <> , and shall submit with
    any recommendations, a report on the Federal and State-
    specific budget consequences of the recommendations''
    before the period; and
    (H) by adding at the end the following:
    ``(11) Consultation and coordination with medpac.--
    ``(A) In general.--MACPAC shall consult with the
    Medicare Payment Advisory Commission (in this paragraph
    referred to as `MedPAC') established under section 1805
    in carrying out its duties under this section, as
    appropriate and particularly with respect to the issues
    specified in

    [[Page 331]]

    paragraph (2) as they relate to those Medicaid
    beneficiaries who are dually eligible for Medicaid and
    the Medicare program under title XVIII, adult Medicaid
    beneficiaries (who are not dually eligible for
    Medicare), and beneficiaries under Medicare.
    Responsibility for analysis of and recommendations to
    change Medicare policy regarding Medicare beneficiaries,
    including Medicare beneficiaries who are dually eligible
    for Medicare and Medicaid, shall rest with MedPAC.
    ``(B) Information sharing.--MACPAC and MedPAC shall
    have access to deliberations and records of the other
    such entity, respectively, upon the request of the other
    such entity.
    ``(12) Consultation with states.--MACPAC shall regularly
    consult with States in carrying out its duties under this
    section, including with respect to developing processes for
    carrying out such duties, and shall ensure that input from
    States is taken into account and represented in MACPAC's
    recommendations and reports.
    ``(13) Coordinate and consult with the federal coordinated
    health care office.--MACPAC shall coordinate and consult with
    the Federal Coordinated Health Care Office established under
    section 2081 of the Patient Protection and Affordable Care Act
    before making any recommendations regarding dual eligible
    individuals.
    ``(14) Programmatic oversight vested in the secretary.--
    MACPAC's authority to make recommendations in accordance with
    this section shall not affect, or be considered to duplicate,
    the Secretary's authority to carry out Federal responsibilities
    with respect to Medicaid and CHIP.'';
    (2) in subsection (c)(2)--
    (A) by striking subparagraphs (A) and (B) and
    inserting the following:
    ``(A) In general.--The membership of MACPAC shall
    include individuals who have had direct experience as
    enrollees or parents or caregivers of enrollees in
    Medicaid or CHIP and individuals with national
    recognition for their expertise in Federal safety net
    health programs, health finance and economics, actuarial
    science, health plans and integrated delivery systems,
    reimbursement for health care, health information
    technology, and other providers of health services,
    public health, and other related fields, who provide a
    mix of different professions, broad geographic
    representation, and a balance between urban and rural
    representation.
    ``(B) Inclusion.--The membership of MACPAC shall
    include (but not be limited to) physicians, dentists,
    and other health professionals, employers, third-party
    payers, and individuals with expertise in the delivery
    of health services. Such membership shall also include
    representatives of children, pregnant women, the
    elderly, individuals with disabilities, caregivers, and
    dual eligible individuals, current or former
    representatives of State agencies responsible for
    administering Medicaid, and current or former
    representatives of State agencies responsible for
    administering CHIP.''.

    [[Page 332]]

    (3) in subsection (d)(2), by inserting ``and State'' after
    ``Federal'';
    (4) in subsection (e)(1), in the first sentence, by
    inserting ``and, as a condition for receiving payments under
    sections 1903(a) and 2105(a), from any State agency responsible
    for administering Medicaid or CHIP,'' after ``United States'';
    and
    (5) in subsection (f)--
    (A) in the subsection heading, by striking
    ``Authorization of Appropriations'' and inserting
    ``Funding'';
    (B) in paragraph (1), by inserting ``(other than for
    fiscal year 2010)'' before ``in the same manner''; and
    (C) by adding at the end the following:
    ``(3) Funding for fiscal year 2010.--
    ``(A) In general.--Out of any funds in the Treasury
    not otherwise appropriated, there is appropriated to
    MACPAC to carry out the provisions of this section for
    fiscal year 2010, $9,000,000.
    ``(B) Transfer of funds.--Notwithstanding section
    2104(a)(13), from the amounts appropriated in such
    section for fiscal year 2010, $2,000,000 is hereby
    transferred and made available in such fiscal year to
    MACPAC to carry out the provisions of this section.
    ``(4) Availability.--Amounts made available under paragraphs
    (2) and (3) to MACPAC to carry out the provisions of this
    section shall remain available until expended.''.

    (b) Conforming MedPAC Amendments.--Section 1805(b) of the Social
    Security Act (42 U.S.C. 1395b-6(b)), is amended--
    (1) in paragraph (1)(C), by striking ``March 1 of each year
    (beginning with 1998)'' and inserting ``March 15'';
    (2) in paragraph (1)(D), by inserting ``, and (beginning
    with 2012) containing an examination of the topics described in
    paragraph (9), to the extent feasible'' before the period; and
    (3) by adding at the end the following:
    ``(9) Review and annual report on medicaid and commercial
    trends.--The Commission shall review and report on aggregate
    trends in spending, utilization, and financial performance under
    the Medicaid program under title XIX and the private market for
    health care services with respect to providers for which, on an
    aggregate national basis, a significant portion of revenue or
    services is associated with the Medicaid program. Where
    appropriate, the Commission shall conduct such review in
    consultation with the Medicaid and CHIP Payment and Access
    Commission established under section 1900 (in this section
    referred to as `MACPAC').
    ``(10) Coordinate and consult with the federal coordinated
    health care office.--The Commission shall coordinate and consult
    with the Federal Coordinated Health Care Office established
    under section 2081 of the Patient Protection and Affordable Care
    Act before making any recommendations regarding dual eligible
    individuals.
    ``(11) Interaction of medicaid and medicare.--The Commission
    shall consult with MACPAC in carrying out its duties under this
    section, as appropriate. Responsibility for analysis of and
    recommendations to change Medicare policy regarding Medicare
    beneficiaries, including Medicare beneficiaries who are dually
    eligible for Medicare and Medicaid,

    [[Page 333]]

    shall rest with the Commission. Responsibility for analysis of
    and recommendations to change Medicaid policy regarding Medicaid
    beneficiaries, including Medicaid beneficiaries who are dually
    eligible for Medicare and Medicaid, shall rest with MACPAC.''.

    Subtitle K--Protections for American Indians and Alaska Natives

    SEC. 2901. SPECIAL RULES RELATING TO INDIANS.

    (a) <> No Cost-sharing for Indians With Income
    at or Below 300 Percent of Poverty Enrolled in Coverage Through a State
    Exchange.--For provisions prohibiting cost sharing for Indians enrolled
    in any qualified health plan in the individual market through an
    Exchange, see section 1402(d) of the Patient Protection and Affordable
    Care Act.

    (b) <> Payer of Last Resort.--Health programs
    operated by the Indian Health Service, Indian tribes, tribal
    organizations, and Urban Indian organizations (as those terms are
    defined in section 4 of the Indian Health Care Improvement Act (25
    U.S.C. 1603)) shall be the payer of last resort for services provided by
    such Service, tribes, or organizations to individuals eligible for
    services through such programs, notwithstanding any Federal, State, or
    local law to the contrary.

    (c) Facilitating Enrollment of Indians Under the Express Lane
    Option.--Section 1902(e)(13)(F)(ii) of the Social Security Act (42
    U.S.C. 1396a(e)(13)(F)(ii)) is amended--
    (1) in the clause heading, by inserting ``and indian tribes
    and tribal organizations'' after ``agencies''; and
    (2) by adding at the end the following:
    ``(IV) The Indian Health Service, an
    Indian Tribe, Tribal Organization, or
    Urban Indian Organization (as defined in
    section 1139(c)).''.

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

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

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

    [[Page 334]]

    Subtitle L--Maternal and Child Health Services

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

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

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

    ``(a) Purposes.--The purposes of this section are--
    ``(1) to strengthen and improve the programs and activities
    carried out under this title;
    ``(2) to improve coordination of services for at risk
    communities; and
    ``(3) to identify and provide comprehensive services to
    improve outcomes for families who reside in at risk communities.

    ``(b) Requirement for All States To Assess Statewide Needs and
    Identify at Risk Communities.--
    ``(1) In general.-- <> Not later than 6
    months after the date of enactment of this section, each State
    shall, as a condition of receiving payments from an allotment
    for the State under section 502 for fiscal year 2011, conduct a
    statewide needs assessment (which shall be separate from the
    statewide needs assessment required under section 505(a)) that
    identifies--
    ``(A) communities with concentrations of--
    ``(i) premature birth, low-birth weight
    infants, and infant mortality, including infant
    death due to neglect, or other indicators of at-
    risk prenatal, maternal, newborn, or child health;
    ``(ii) poverty;
    ``(iii) crime;
    ``(iv) domestic violence;
    ``(v) high rates of high-school drop-outs;
    ``(vi) substance abuse;
    ``(vii) unemployment; or
    ``(viii) child maltreatment;
    ``(B) the quality and capacity of existing programs
    or initiatives for early childhood home visitation in
    the State including--
    ``(i) the number and types of individuals and
    families who are receiving services under such
    programs or initiatives;
    ``(ii) the gaps in early childhood home
    visitation in the State; and
    ``(iii) the extent to which such programs or
    initiatives are meeting the needs of eligible
    families described in subsection (k)(2); and
    ``(C) the State's capacity for providing substance
    abuse treatment and counseling services to individuals
    and families in need of such treatment or services.
    ``(2) Coordination with other assessments.--In conducting
    the statewide needs assessment required under paragraph (1), the
    State shall coordinate with, and take into account, other
    appropriate needs assessments conducted by

    [[Page 335]]

    the State, as determined by the Secretary, including the needs
    assessment required under section 505(a) (both the most recently
    completed assessment and any such assessment in progress), the
    communitywide strategic planning and needs assessments conducted
    in accordance with section 640(g)(1)(C) of the Head Start Act,
    and the inventory of current unmet needs and current community-
    based and prevention-focused programs and activities to prevent
    child abuse and neglect, and other family resource services
    operating in the State required under section 205(3) of the
    Child Abuse Prevention and Treatment Act.
    ``(3) Submission to the secretary.--Each State shall submit
    to the Secretary, in such form and manner as the Secretary shall
    require--
    ``(A) the results of the statewide needs assessment
    required under paragraph (1); and
    ``(B) a description of how the State intends to
    address needs identified by the assessment, particularly
    with respect to communities identified under paragraph
    (1)(A), which may include applying for a grant to
    conduct an early childhood home visitation program in
    accordance with the requirements of this section.

    ``(c) Grants for Early Childhood Home Visitation Programs.--
    ``(1) Authority to make grants.--In addition to any other
    payments made under this title to a State, the Secretary shall
    make grants to eligible entities to enable the entities to
    deliver services under early childhood home visitation programs
    that satisfy the requirements of subsection (d) to eligible
    families in order to promote improvements in maternal and
    prenatal health, infant health, child health and development,
    parenting related to child development outcomes, school
    readiness, and the socioeconomic status of such families, and
    reductions in child abuse, neglect, and injuries.
    ``(2) Authority to use initial grant funds for planning or
    implementation.--An eligible entity that receives a grant under
    paragraph (1) may use a portion of the funds made available to
    the entity during the first 6 months of the period for which the
    grant is made for planning or implementation activities to
    assist with the establishment of early childhood home visitation
    programs that satisfy the requirements of subsection (d).
    ``(3) <> Grant duration.--The
    Secretary shall determine the period of years for which a grant
    is made to an eligible entity under paragraph (1).
    ``(4) Technical assistance.--The Secretary shall provide an
    eligible entity that receives a grant under paragraph (1) with
    technical assistance in administering programs or activities
    conducted in whole or in part with grant funds.

    ``(d) Requirements.--The requirements of this subsection for an
    early childhood home visitation program conducted with a grant made
    under this section are as follows:
    ``(1) Quantifiable, measurable improvement in benchmark
    areas.--
    ``(A) In general.--The eligible entity establishes,
    subject to the approval of the Secretary, quantifiable,
    measurable 3- and 5-year benchmarks for demonstrating
    that the

    [[Page 336]]

    program results in improvements for the eligible
    families participating in the program in each of the
    following areas:
    ``(i) Improved maternal and newborn health.
    ``(ii) Prevention of child injuries, child
    abuse, neglect, or maltreatment, and reduction of
    emergency department visits.
    ``(iii) Improvement in school readiness and
    achievement.
    ``(iv) Reduction in crime or domestic
    violence.
    ``(v) Improvements in family economic self-
    sufficiency.
    ``(vi) Improvements in the coordination and
    referrals for other community resources and
    supports.
    ``(B) Demonstration of improvements after 3 years.--
    ``(i) Report to the secretary.--Not later than
    30 days after the end of the 3rd year in which the
    eligible entity conducts the program, the entity
    submits to the Secretary a report demonstrating
    improvement in at least 4 of the areas specified
    in subparagraph (A).
    ``(ii) Corrective action plan.--If the report
    submitted by the eligible entity under clause (i)
    fails to demonstrate improvement in at least 4 of
    the areas specified in subparagraph (A), the
    entity shall develop and implement a plan to
    improve outcomes in each of the areas specified in
    subparagraph (A), subject to approval by the
    Secretary. The plan shall include provisions for
    the Secretary to monitor implementation of the
    plan and conduct continued oversight of the
    program, including through submission by the
    entity of regular reports to the Secretary.
    ``(iii) Technical assistance.--
    ``(I) In general.--The Secretary
    shall provide an eligible entity
    required to develop and implement an
    improvement plan under clause (ii) with
    technical assistance to develop and
    implement the plan. The Secretary may
    provide the technical assistance
    directly or through grants, contracts,
    or cooperative agreements.
    ``(II) Advisory
    panel. <> --The
    Secretary shall establish an advisory
    panel for purposes of obtaining
    recommendations regarding the technical
    assistance provided to entities in
    accordance with subclause (I).
    ``(iv) No improvement or failure to submit
    report. <> --If
    the Secretary determines after a period of time
    specified by the Secretary that an eligible entity
    implementing an improvement plan under clause (ii)
    has failed to demonstrate any improvement in the
    areas specified in subparagraph (A), or if the
    Secretary determines that an eligible entity has
    failed to submit the report required under clause
    (i), the Secretary shall terminate the entity's
    grant and may include any unexpended grant funds
    in grants made to nonprofit organizations under
    subsection (h)(2)(B).

    [[Page 337]]

    ``(C) Final report.--Not later than December 31,
    2015, the eligible entity shall submit a report to the
    Secretary demonstrating improvements (if any) in each of
    the areas specified in subparagraph (A).
    ``(2) Improvements in outcomes for individual families.--
    ``(A) In general.--The program is designed, with
    respect to an eligible family participating in the
    program, to result in the participant outcomes described
    in subparagraph (B) that the eligible entity identifies
    on the basis of an individualized assessment of the
    family, are relevant for that family.
    ``(B) Participant outcomes.--The participant
    outcomes described in this subparagraph are the
    following:
    ``(i) Improvements in prenatal, maternal, and
    newborn health, including improved pregnancy
    outcomes
    ``(ii) Improvements in child health and
    development, including the prevention of child
    injuries and maltreatment and improvements in
    cognitive, language, social-emotional, and
    physical developmental indicators.
    ``(iii) Improvements in parenting skills.
    ``(iv) Improvements in school readiness and
    child academic achievement.
    ``(v) Reductions in crime or domestic
    violence.
    ``(vi) Improvements in family economic self-
    sufficiency.
    ``(vii) Improvements in the coordination of
    referrals for, and the provision of, other
    community resources and supports for eligible
    families, consistent with State child welfare
    agency training.
    ``(3) Core components.--The program includes the following
    core components:
    ``(A) Service delivery model or models.--
    ``(i) In general.--Subject to clause (ii), the
    program is conducted using 1 or more of the
    service delivery models described in item (aa) or
    (bb) of subclause (I) or in subclause (II)
    selected by the eligible entity:
    ``(I) The model conforms to a clear
    consistent home visitation model that
    has been in existence for at least 3
    years and is research-based, grounded in
    relevant empirically-based knowledge,
    linked to program determined outcomes,
    associated with a national organization
    or institution of higher education that
    has comprehensive home visitation
    program standards that ensure high
    quality service delivery and continuous
    program quality improvement, and has
    demonstrated significant, (and in the
    case of the service delivery model
    described in item (aa), sustained)
    positive outcomes, as described in the
    benchmark areas specified in paragraph
    (1)(A) and the participant outcomes
    described in paragraph (2)(B), when
    evaluated using well-designed and
    rigorous--

    [[Page 338]]

    ``(aa) randomized controlled
    research designs, and the
    evaluation results have been
    published in a peer-reviewed
    journal; or
    ``(bb) quasi-experimental
    research designs.
    ``(II) The model conforms to a
    promising and new approach to achieving
    the benchmark areas specified in
    paragraph (1)(A) and the participant
    outcomes described in paragraph (2)(B),
    has been developed or identified by a
    national organization or institution of
    higher education, and will be evaluated
    through well-designed and rigorous
    process.
    ``(ii) Majority of grant funds used for
    evidence-based models.--An eligible entity shall
    use not more than 25 percent of the amount of the
    grant paid to the entity for a fiscal year for
    purposes of conducting a program using the service
    delivery model described in clause (i)(II).
    ``(iii) Criteria for evidence of effectiveness
    of models.--The Secretary shall establish criteria
    for evidence of effectiveness of the service
    delivery models and shall ensure that the process
    for establishing the criteria is transparent and
    provides the opportunity for public comment.
    ``(B) Additional requirements.--
    ``(i) The program adheres to a clear,
    consistent model that satisfies the requirements
    of being grounded in empirically-based knowledge
    related to home visiting and linked to the
    benchmark areas specified in paragraph (1)(A) and
    the participant outcomes described in paragraph
    (2)(B) related to the purposes of the program.
    ``(ii) The program employs well-trained and
    competent staff, as demonstrated by education or
    training, such as nurses, social workers,
    educators, child development specialists, or other
    well-trained and competent staff, and provides
    ongoing and specific training on the model being
    delivered.
    ``(iii) The program maintains high quality
    supervision to establish home visitor
    competencies.
    ``(iv) The program demonstrates strong
    organizational capacity to implement the
    activities involved.
    ``(v) The program establishes appropriate
    linkages and referral networks to other community
    resources and supports for eligible families.
    ``(vi) The program monitors the fidelity of
    program implementation to ensure that services are
    delivered pursuant to the specified model.
    ``(4) Priority for serving high-risk populations.--The
    eligible entity gives priority to providing services under the
    program to the following:
    ``(A) Eligible families who reside in communities in
    need of such services, as identified in the statewide
    needs assessment required under subsection (b)(1)(A).
    ``(B) Low-income eligible families.
    ``(C) Eligible families who are pregnant women who
    have not attained age 21.

    [[Page 339]]

    ``(D) Eligible families that have a history of child
    abuse or neglect or have had interactions with child
    welfare services.
    ``(E) Eligible families that have a history of
    substance abuse or need substance abuse treatment.
    ``(F) Eligible families that have users of tobacco
    products in the home.
    ``(G) Eligible families that are or have children
    with low student achievement.
    ``(H) Eligible families with children with
    developmental delays or disabilities.
    ``(I) Eligible families who, or that include
    individuals who, are serving or formerly served in the
    Armed Forces, including such families that have members
    of the Armed Forces who have had multiple deployments
    outside of the United States.

    ``(e) Application Requirements.--An eligible entity desiring a grant
    under this section shall submit an application to the Secretary for
    approval, in such manner as the Secretary may require, that includes the
    following:
    ``(1) A description of the populations to be served by the
    entity, including specific information regarding how the entity
    will serve high risk populations described in subsection (d)(4).
    ``(2) An assurance that the entity will give priority to
    serving low-income eligible families and eligible families who
    reside in at risk communities identified in the statewide needs
    assessment required under subsection (b)(1)(A).
    ``(3) The service delivery model or models described in
    subsection (d)(3)(A) that the entity will use under the program
    and the basis for the selection of the model or models.
    ``(4) A statement identifying how the selection of the
    populations to be served and the service delivery model or
    models that the entity will use under the program for such
    populations is consistent with the results of the statewide
    needs assessment conducted under subsection (b).
    ``(5) The quantifiable, measurable benchmarks established by
    the State to demonstrate that the program contributes to
    improvements in the areas specified in subsection (d)(1)(A).
    ``(6) An assurance that the entity will obtain and submit
    documentation or other appropriate evidence from the
    organization or entity that developed the service delivery model
    or models used under the program to verify that the program is
    implemented and services are delivered according to the model
    specifications.
    ``(7) Assurances that the entity will establish procedures
    to ensure that--
    ``(A) the participation of each eligible family in
    the program is voluntary; and
    ``(B) services are provided to an eligible family in
    accordance with the individual assessment for that
    family.
    ``(8) Assurances that the entity will--
    ``(A) submit annual reports to the Secretary
    regarding the program and activities carried out under
    the program that include such information and data as
    the Secretary shall require; and
    ``(B) participate in, and cooperate with, data and
    information collection necessary for the evaluation
    required

    [[Page 340]]

    under subsection (g)(2) and other research and
    evaluation activities carried out under subsection
    (h)(3).
    ``(9) A description of other State programs that include
    home visitation services, including, if applicable to the State,
    other programs carried out under this title with funds made
    available from allotments under section 502(c), programs funded
    under title IV, title II of the Child Abuse Prevention and
    Treatment Act (relating to community-based grants for the
    prevention of child abuse and neglect), and section 645A of the
    Head Start Act (relating to Early Head Start programs).
    ``(10) Other information as required by the Secretary.

    ``(f) Maintenance of Effort.--Funds provided to an eligible entity
    receiving a grant under this section shall supplement, and not supplant,
    funds from other sources for early childhood home visitation programs or
    initiatives.
    ``(g) Evaluation.--
    ``(1) Independent, expert advisory
    panel. <> --The Secretary, in accordance
    with subsection (h)(1)(A), shall appoint an independent advisory
    panel consisting of experts in program evaluation and research,
    education, and early childhood development--
    ``(A) to review, and make recommendations on, the
    design and plan for the evaluation required under
    paragraph (2) within 1 year after the date of enactment
    of this section;
    ``(B) to maintain and advise the Secretary regarding
    the progress of the evaluation; and
    ``(C) to comment, if the panel so desires, on the
    report submitted under paragraph (3).
    ``(2) <> Authority to conduct
    evaluation.--On the basis of the recommendations of the advisory
    panel under paragraph (1), the Secretary shall, by grant,
    contract, or interagency agreement, conduct an evaluation of the
    statewide needs assessments submitted under subsection (b) and
    the grants made under subsections (c) and (h)(3)(B). The
    evaluation shall include--
    ``(A) an analysis, on a State-by-State basis, of the
    results of such assessments, including indicators of
    maternal and prenatal health and infant health and
    mortality, and State actions in response to the
    assessments; and
    ``(B) an assessment of <> --
    ``(i) the effect of early childhood home
    visitation programs on child and parent outcomes,
    including with respect to each of the benchmark
    areas specified in subsection (d)(1)(A) and the
    participant outcomes described in subsection
    (d)(2)(B);
    ``(ii) the effectiveness of such programs on
    different populations, including the extent to
    which the ability of programs to improve
    participant outcomes varies across programs and
    populations; and
    ``(iii) the potential for the activities
    conducted under such programs, if scaled broadly,
    to improve health care practices, eliminate health
    disparities, and improve health care system
    quality, efficiencies, and reduce costs.

    [[Page 341]]

    ``(3) Report.--Not later than March 31, 2015, the Secretary
    shall submit a report to Congress on the results of the
    evaluation conducted under paragraph (2) and shall make the
    report publicly available.

    ``(h) Other Provisions.--
    ``(1) Intra-agency collaboration.--The Secretary shall
    ensure that the Maternal and Child Health Bureau and the
    Administration for Children and Families collaborate with
    respect to carrying out this section, including with respect
    to--
    ``(A) reviewing and analyzing the statewide needs
    assessments required under subsection (b), the awarding
    and oversight of grants awarded under this section, the
    establishment of the advisory panels required under
    subsections (d)(1)(B)(iii)(II) and (g)(1), and the
    evaluation and report required under subsection (g); and
    ``(B) consulting with other Federal agencies with
    responsibility for administering or evaluating programs
    that serve eligible families to coordinate and
    collaborate with respect to research related to such
    programs and families, including the Office of the
    Assistant Secretary for Planning and Evaluation of the
    Department of Health and Human Services, the Centers for
    Disease Control and Prevention, the National Institute
    of Child Health and Human Development of the National
    Institutes of Health, the Office of Juvenile Justice and
    Delinquency Prevention of the Department of Justice, and
    the Institute of Education Sciences of the Department of
    Education.
    ``(2) <> Grants to eligible entities
    that are not states.--
    ``(A) Indian tribes, tribal organizations, or urban
    indian organizations.--The Secretary shall specify
    requirements for eligible entities that are Indian
    Tribes (or a consortium of Indian Tribes), Tribal
    Organizations, or Urban Indian Organizations to apply
    for and conduct an early childhood home visitation
    program with a grant under this section. Such
    requirements shall, to the greatest extent practicable,
    be consistent with the requirements applicable to
    eligible entities that are States and shall require an
    Indian Tribe (or consortium), Tribal Organization, or
    Urban Indian Organization to--
    ``(i) conduct a needs assessment similar to
    the assessment required for all States under
    subsection (b); and
    ``(ii) establish quantifiable, measurable 3-
    and 5-year benchmarks consistent with subsection
    (d)(1)(A).
    ``(B) Nonprofit organizations.--If, as of the
    beginning of fiscal year 2012, a State has not applied
    or been approved for a grant under this section, the
    Secretary may use amounts appropriated under paragraph
    (1) of subsection (j) that are available for expenditure
    under paragraph (3) of that subsection to make a grant
    to an eligible entity that is a nonprofit organization
    described in subsection (k)(1)(B) to conduct an early
    childhood home visitation program in the State. The
    Secretary shall specify the requirements for such an
    organization to apply for and conduct the program which
    shall, to the greatest extent practicable, be consistent
    with the requirements applicable

    [[Page 342]]

    to eligible entities that are States and shall require
    the organization to--
    ``(i) carry out the program based on the needs
    assessment conducted by the State under subsection
    (b); and
    ``(ii) establish quantifiable, measurable 3-
    and 5-year benchmarks consistent with subsection
    (d)(1)(A).
    ``(3) Research and other evaluation activities.--
    ``(A) In general.--The Secretary shall carry out a
    continuous program of research and evaluation activities
    in order to increase knowledge about the implementation
    and effectiveness of home visiting programs, using
    random assignment designs to the maximum extent
    feasible. The Secretary may carry out such activities
    directly, or through grants, cooperative agreements, or
    contracts.
    ``(B) Requirements.--The Secretary shall ensure
    that--
    ``(i) evaluation of a specific program or
    project is conducted by persons or individuals not
    directly involved in the operation of such program
    or project; and
    ``(ii) the conduct of research and evaluation
    activities includes consultation with independent
    researchers, State officials, and developers and
    providers of home visiting programs on topics
    including research design and administrative data
    matching.
    ``(4) Report and recommendation.--Not later than December
    31, 2015, the Secretary shall submit a report to Congress
    regarding the programs conducted with grants under this section.
    The report required under this paragraph shall include--
    ``(A) information regarding the extent to which
    eligible entities receiving grants under this section
    demonstrated improvements in each of the areas specified
    in subsection (d)(1)(A);
    ``(B) information regarding any technical assistance
    provided under subsection (d)(1)(B)(iii)(I), including
    the type of any such assistance provided; and
    ``(C) recommendations for such legislative or
    administrative action as the Secretary determines
    appropriate.

    ``(i) Application of Other Provisions of Title.--
    ``(1) In general.--Except as provided in paragraph (2), the
    other provisions of this title shall not apply to a grant made
    under this section.
    ``(2) Exceptions.--The following provisions of this title
    shall apply to a grant made under this section to the same
    extent and in the same manner as such provisions apply to
    allotments made under section 502(c):
    ``(A) Section 504(b)(6) (relating to prohibition on
    payments to excluded individuals and entities).
    ``(B) Section 504(c) (relating to the use of funds
    for the purchase of technical assistance).
    ``(C) Section 504(d) (relating to a limitation on
    administrative expenditures).
    ``(D) Section 506 (relating to reports and audits),
    but only to the extent determined by the Secretary to be
    appropriate for grants made under this section.

    [[Page 343]]

    ``(E) Section 507 (relating to penalties for false
    statements).
    ``(F) Section 508 (relating to nondiscrimination).
    ``(G) Section 509(a) (relating to the administration
    of the grant program).

    ``(j) Appropriations.--
    ``(1) In general.--Out of any funds in the Treasury not
    otherwise appropriated, there are appropriated to the Secretary
    to carry out this section--
    ``(A) $100,000,000 for fiscal year 2010;
    ``(B) $250,000,000 for fiscal year 2011;
    ``(C) $350,000,000 for fiscal year 2012;
    ``(D) $400,000,000 for fiscal year 2013; and
    ``(E) $400,000,000 for fiscal year 2014.
    ``(2) Reservations.--Of the amount appropriated under this
    subsection for a fiscal year, the Secretary shall reserve--
    ``(A) 3 percent of such amount for purposes of
    making grants to eligible entities that are Indian
    Tribes (or a consortium of Indian Tribes), Tribal
    Organizations, or Urban Indian Organizations; and
    ``(B) 3 percent of such amount for purposes of
    carrying out subsections (d)(1)(B)(iii), (g), and
    (h)(3).
    ``(3) Availability.--Funds made available to an eligible
    entity under this section for a fiscal year shall remain
    available for expenditure by the eligible entity through the end
    of the second succeeding fiscal year after award. Any funds that
    are not expended by the eligible entity during the period in
    which the funds are available under the preceding sentence may
    be used for grants to nonprofit organizations under subsection
    (h)(2)(B).

    ``(k) Definitions.--In this section:
    ``(1) Eligible entity.--
    ``(A) In general.--The term `eligible entity' means
    a State, an Indian Tribe, Tribal Organization, or Urban
    Indian Organization, Puerto Rico, Guam, the Virgin
    Islands, the Northern Mariana Islands, and American
    Samoa.
    ``(B) Nonprofit organizations.--Only for purposes of
    awarding grants under subsection (h)(2)(B), such term
    shall include a nonprofit organization with an
    established record of providing early childhood home
    visitation programs or initiatives in a State or several
    States.
    ``(2) Eligible family.--The term `eligible family' means--
    ``(A) a woman who is pregnant, and the father of the
    child if the father is available; or
    ``(B) a parent or primary caregiver of a child,
    including grandparents or other relatives of the child,
    and foster parents, who are serving as the child's
    primary caregiver from birth to kindergarten entry, and
    including a noncustodial parent who has an ongoing
    relationship with, and at times provides physical care
    for, the child.
    ``(3) Indian tribe; tribal organization.--The terms `Indian
    Tribe' and `Tribal Organization', and `Urban Indian
    Organization' have the meanings given such terms in section 4 of
    the Indian Health Care Improvement Act.''.

    [[Page 344]]

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

    (a) Research on Postpartum Conditions.--
    (1) Expansion and intensification of activities.--The
    Secretary of Health and Human Services (in this subsection and
    subsection (c) referred to as the ``Secretary'') is encouraged
    to continue activities on postpartum depression or postpartum
    psychosis (in this subsection and subsection (c) referred to as
    ``postpartum conditions''), including research to expand the
    understanding of the causes of, and treatments for, postpartum
    conditions. Activities under this paragraph shall include
    conducting and supporting the following:
    (A) Basic research concerning the etiology and
    causes of the conditions.
    (B) Epidemiological studies to address the frequency
    and natural history of the conditions and the
    differences among racial and ethnic groups with respect
    to the conditions.
    (C) The development of improved screening and
    diagnostic techniques.
    (D) Clinical research for the development and
    evaluation of new treatments.
    (E) Information and education programs for health
    care professionals and the public, which may include a
    coordinated national campaign to increase the awareness
    and knowledge of postpartum conditions. Activities under
    such a national campaign may--
    (i) include public service announcements
    through television, radio, and other means; and
    (ii) focus on--
    (I) raising awareness about
    screening;
    (II) educating new mothers and their
    families about postpartum conditions to
    promote earlier diagnosis and treatment;
    and
    (III) ensuring that such education
    includes complete information concerning
    postpartum conditions, including its
    symptoms, methods of coping with the
    illness, and treatment resources.
    (2) Sense of congress regarding longitudinal study of
    relative mental health consequences for women of resolving a
    pregnancy.--
    (A) Sense of congress.--It is the sense of Congress
    that the Director of the National Institute of Mental
    Health may conduct a nationally representative
    longitudinal study (during the period of fiscal years
    2010 through 2019) of the relative mental health
    consequences for women of resolving a pregnancy
    (intended and unintended) in various ways, including
    carrying the pregnancy to term and parenting the child,
    carrying the pregnancy to term and placing the child for
    adoption, miscarriage, and having an abortion. This
    study may assess the incidence, timing, magnitude, and
    duration of the immediate and long-term mental health
    consequences (positive or negative) of these pregnancy
    outcomes.
    (B) Report.--Subject to the completion of the study
    under subsection (a), beginning not later than 5 years
    after the date of the enactment of this Act, and
    periodically

    [[Page 345]]

    thereafter for the duration of the study, such Director
    may prepare and submit to the Congress reports on the
    findings of the study.

    (b) Grants To Provide Services to Individuals With a Postpartum
    Condition and Their Families.--Title V of the Social Security Act (42
    U.S.C. 701 et seq.), as amended by section 2951, is amended by adding at
    the end the following new section:

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

    ``(a) In General.--In addition to any other payments made under this
    title to a State, the Secretary may make grants to eligible entities for
    projects for the establishment, operation, and coordination of effective
    and cost-efficient systems for the delivery of essential services to
    individuals with or at risk for postpartum conditions and their
    families.
    ``(b) Certain Activities.--To the extent practicable and
    appropriate, the Secretary shall ensure that projects funded under
    subsection (a) provide education and services with respect to the
    diagnosis and management of postpartum conditions for individuals with
    or at risk for postpartum conditions and their families. The Secretary
    may allow such projects to include the following:
    ``(1) Delivering or enhancing outpatient and home-based
    health and support services, including case management and
    comprehensive treatment services.
    ``(2) Delivering or enhancing inpatient care management
    services that ensure the well-being of the mother and family and
    the future development of the infant.
    ``(3) Improving the quality, availability, and organization
    of health care and support services (including transportation
    services, attendant care, homemaker services, day or respite
    care, and providing counseling on financial assistance and
    insurance).
    ``(4) Providing education about postpartum conditions to
    promote earlier diagnosis and treatment. Such education may
    include--
    ``(A) providing complete information on postpartum
    conditions, symptoms, methods of coping with the
    illness, and treatment resources; and
    ``(B) in the case of a grantee that is a State,
    hospital, or birthing facility--
    ``(i) providing education to new mothers and
    fathers, and other family members as appropriate,
    concerning postpartum conditions before new
    mothers leave the health facility; and
    ``(ii) ensuring that training programs
    regarding such education are carried out at the
    health facility.

    ``(c) Integration With Other Programs.--To the extent practicable
    and appropriate, the Secretary may integrate the grant program under
    this section with other grant programs carried out by the Secretary,
    including the program under section 330 of the Public Health Service
    Act.
    ``(d) Requirements.--The Secretary shall establish requirements for
    grants made under this section that include a limit on the amount of
    grants funds that may be used for administration, accounting, reporting,
    or program oversight functions and a requirement for each eligible
    entity that receives a grant to submit, for

    [[Page 346]]

    each grant period, a report to the Secretary that describes how grant
    funds were used during such period.
    ``(e) Technical Assistance.--The Secretary may provide technical
    assistance to entities seeking a grant under this section in order to
    assist such entities in complying with the requirements of this section.
    ``(f) Application of Other Provisions of Title.--
    ``(1) In general.--Except as provided in paragraph (2), the
    other provisions of this title shall not apply to a grant made
    under this section.
    ``(2) Exceptions.--The following provisions of this title
    shall apply to a grant made under this section to the same
    extent and in the same manner as such provisions apply to
    allotments made under section 502(c):
    ``(A) Section 504(b)(6) (relating to prohibition on
    payments to excluded individuals and entities).
    ``(B) Section 504(c) (relating to the use of funds
    for the purchase of technical assistance).
    ``(C) Section 504(d) (relating to a limitation on
    administrative expenditures).
    ``(D) Section 506 (relating to reports and audits),
    but only to the extent determined by the Secretary to be
    appropriate for grants made under this section.
    ``(E) Section 507 (relating to penalties for false
    statements).
    ``(F) Section 508 (relating to nondiscrimination).
    ``(G) Section 509(a) (relating to the administration
    of the grant program).

    ``(g) Definitions.--In this section:
    ``(1) The term `eligible entity'--
    ``(A) means a public or nonprofit private entity;
    and
    ``(B) includes a State or local government, public-
    private partnership, recipient of a grant under section
    330H of the Public Health Service Act (relating to the
    Healthy Start Initiative), public or nonprofit private
    hospital, community-based organization, hospice,
    ambulatory care facility, community health center,
    migrant health center, public housing primary care
    center, or homeless health center.
    ``(2) The term `postpartum condition' means postpartum
    depression or postpartum psychosis.''.

    (c) General Provisions.--
    (1) Authorization of appropriations.--To carry out this
    section and the amendment made by subsection (b), there are
    authorized to be appropriated, in addition to such other sums as
    may be available for such purpose--
    (A) $3,000,000 for fiscal year 2010; and
    (B) such sums as may be necessary for fiscal years
    2011 and 2012.
    (2) Report by the secretary.--
    (A) Study.--The Secretary shall conduct a study on
    the benefits of screening for postpartum conditions.
    (B) Report.--Not later than 2 years after the date
    of the enactment of this Act, the Secretary shall
    complete the study required by subparagraph (A) and
    submit a report to the Congress on the results of such
    study.

    [[Page 347]]

    SEC. 2953. PERSONAL RESPONSIBILITY EDUCATION.

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

    ``SEC. 513. <> PERSONAL RESPONSIBILITY EDUCATION.

    ``(a) Allotments to States.--
    ``(1) Amount.--
    ``(A) In general.--For the purpose described in
    subsection (b), subject to the succeeding provisions of
    this section, for each of fiscal years 2010 through
    2014, the Secretary shall allot to each State an amount
    equal to the product of--
    ``(i) the amount appropriated under subsection
    (f) for the fiscal year and available for
    allotments to States after the application of
    subsection (c); and
    ``(ii) the State youth population percentage
    determined under paragraph (2).
    ``(B) Minimum allotment.--
    ``(i) In general.--Each State allotment under
    this paragraph for a fiscal year shall be at least
    $250,000.
    ``(ii) Pro rata adjustments.--The Secretary
    shall adjust on a pro rata basis the amount of the
    State allotments determined under this paragraph
    for a fiscal year to the extent necessary to
    comply with clause (i).
    ``(C) Application required to access allotments.--
    ``(i) In general.--A State shall not be paid
    from its allotment for a fiscal year unless the
    State submits an application to the Secretary for
    the fiscal year and the Secretary approves the
    application (or requires changes to the
    application that the State satisfies) and meets
    such additional requirements as the Secretary may
    specify.
    ``(ii) Requirements.--The State application
    shall contain an assurance that the State has
    complied with the requirements of this section in
    preparing and submitting the application and shall
    include the following as well as such additional
    information as the Secretary may require:
    ``(I) Based on data from the Centers
    for Disease Control and Prevention
    National Center for Health Statistics,
    the most recent pregnancy rates for the
    State for youth ages 10 to 14 and youth
    ages 15 to 19 for which data are
    available, the most recent birth rates
    for such youth populations in the State
    for which data are available, and trends
    in those rates for the most recently
    preceding 5-year period for which such
    data are available.
    ``(II) State-established goals for
    reducing the pregnancy rates and birth
    rates for such youth populations.
    ``(III) A description of the State's
    plan for using the State allotments
    provided under this section to achieve
    such goals, especially among youth

    [[Page 348]]

    populations that are the most high-risk
    or vulnerable for pregnancies or
    otherwise have special circumstances,
    including youth in foster care, homeless
    youth, youth with HIV/AIDS, pregnant
    youth who are under 21 years of age,
    mothers who are under 21 years of age,
    and youth residing in areas with high
    birth rates for youth.
    ``(2) State youth population percentage.--
    ``(A) In general.--For purposes of paragraph
    (1)(A)(ii), the State youth population percentage is,
    with respect to a State, the proportion (expressed as a
    percentage) of--
    ``(i) the number of individuals who have
    attained age 10 but not attained age 20 in the
    State; to
    ``(ii) the number of such individuals in all
    States.
    ``(B) Determination of number of youth.--The number
    of individuals described in clauses (i) and (ii) of
    subparagraph (A) in a State shall be determined on the
    basis of the most recent Bureau of the Census data.
    ``(3) Availability of state allotments.--Subject to
    paragraph (4)(A), amounts allotted to a State pursuant to this
    subsection for a fiscal year shall remain available for
    expenditure by the State through the end of the second
    succeeding fiscal year.
    ``(4) Authority to award grants from state allotments to
    local organizations and entities in nonparticipating states.--
    ``(A) Grants from unexpended allotments.--If a State
    does not submit an application under this section for
    fiscal year 2010 or 2011, the State shall no longer be
    eligible to submit an application to receive funds from
    the amounts allotted for the State for each of fiscal
    years 2010 through 2014 and such amounts shall be used
    by the Secretary to award grants under this paragraph
    for each of fiscal years 2012 through 2014. The
    Secretary also shall use any amounts from the allotments
    of States that submit applications under this section
    for a fiscal year that remain unexpended as of the end
    of the period in which the allotments are available for
    expenditure under paragraph (3) for awarding grants
    under this paragraph.
    ``(B) 3-year grants.--
    ``(i) In general.--The Secretary shall solicit
    applications to award 3-year grants in each of
    fiscal years 2012, 2013, and 2014 to local
    organizations and entities to conduct, consistent
    with subsection (b), programs and activities in
    States that do not submit an application for an
    allotment under this section for fiscal year 2010
    or 2011.
    ``(ii) Faith-based organizations or
    consortia.--The Secretary may solicit and award
    grants under this paragraph to faith-based
    organizations or consortia.
    ``(C) Evaluation.--An organization or entity awarded
    a grant under this paragraph shall agree to participate
    in a rigorous Federal evaluation.
    ``(5) Maintenance of effort.--No payment shall be made to a
    State from the allotment determined for the State under this
    subsection or to a local organization or entity awarded

    [[Page 349]]

    a grant under paragraph (4), if the expenditure of non-federal
    funds by the State, organization, or entity for activities,
    programs, or initiatives for which amounts from allotments and
    grants under this subsection may be expended is less than the
    amount expended by the State, organization, or entity for such
    programs or initiatives for fiscal year 2009.
    ``(6) Data collection and reporting.--A State or local
    organization or entity receiving funds under this section shall
    cooperate with such requirements relating to the collection of
    data and information and reporting on outcomes regarding the
    programs and activities carried out with such funds, as the
    Secretary shall specify.

    ``(b) Purpose.--
    ``(1) In general.--The purpose of an allotment under
    subsection (a)(1) to a State is to enable the State (or, in the
    case of grants made under subsection (a)(4)(B), to enable a
    local organization or entity) to carry out personal
    responsibility education programs consistent with this
    subsection.
    ``(2) Personal responsibility education programs.--
    ``(A) <> In general.--In this
    section, the term `personal responsibility education
    program' means a program that is designed to educate
    adolescents on--
    ``(i) both abstinence and contraception for
    the prevention of pregnancy and sexually
    transmitted infections, including HIV/AIDS,
    consistent with the requirements of subparagraph
    (B); and
    ``(ii) at least 3 of the adulthood preparation
    subjects described in subparagraph (C).
    ``(B) Requirements.--The requirements of this
    subparagraph are the following:
    ``(i) The program replicates evidence-based
    effective programs or substantially incorporates
    elements of effective programs that have been
    proven on the basis of rigorous scientific
    research to change behavior, which means delaying
    sexual activity, increasing condom or
    contraceptive use for sexually active youth, or
    reducing pregnancy among youth.
    ``(ii) The program is medically-accurate and
    complete.
    ``(iii) The program includes activities to
    educate youth who are sexually active regarding
    responsible sexual behavior with respect to both
    abstinence and the use of contraception.
    ``(iv) The program places substantial emphasis
    on both abstinence and contraception for the
    prevention of pregnancy among youth and sexually
    transmitted infections.
    ``(v) The program provides age-appropriate
    information and activities.
    ``(vi) The information and activities carried
    out under the program are provided in the cultural
    context that is most appropriate for individuals
    in the particular population group to which they
    are directed.
    ``(C) Adulthood preparation subjects.--The adulthood
    preparation subjects described in this subparagraph are
    the following:

    [[Page 350]]

    ``(i) Healthy relationships, such as positive
    self-esteem and relationship dynamics,
    friendships, dating, romantic involvement,
    marriage, and family interactions.
    ``(ii) Adolescent development, such as the
    development of healthy attitudes and values about
    adolescent growth and development, body image,
    racial and ethnic diversity, and other related
    subjects.
    ``(iii) Financial literacy.
    ``(iv) Parent-child communication.
    ``(v) Educational and career success, such as
    developing skills for employment preparation, job
    seeking, independent living, financial self-
    sufficiency, and workplace productivity.
    ``(vi) Healthy life skills, such as goal-
    setting, decision making, negotiation,
    communication and interpersonal skills, and stress
    management.

    ``(c) Reservations of Funds.--
    ``(1) Grants to implement innovative strategies.--From the
    amount appropriated under subsection (f) for the fiscal year,
    the Secretary shall reserve $10,000,000 of such amount for
    purposes of awarding grants to entities to implement innovative
    youth pregnancy prevention strategies and target services to
    high-risk, vulnerable, and culturally under-represented youth
    populations, including youth in foster care, homeless youth,
    youth with HIV/AIDS, pregnant women who are under 21 years of
    age and their partners, mothers who are under 21 years of age
    and their partners, and youth residing in areas with high birth
    rates for youth. An entity awarded a grant under this paragraph
    shall agree to participate in a rigorous Federal evaluation of
    the activities carried out with grant funds.
    ``(2) Other reservations.--From the amount appropriated
    under subsection (f) for the fiscal year that remains after the
    application of paragraph (1), the Secretary shall reserve the
    following amounts:
    ``(A) Grants for indian tribes or tribal
    organizations.--The Secretary shall reserve 5 percent of
    such remainder for purposes of awarding grants to Indian
    tribes and tribal organizations in such manner, and
    subject to such requirements, as the Secretary, in
    consultation with Indian tribes and tribal
    organizations, determines appropriate.
    ``(B) Secretarial responsibilities.--
    ``(i) Reservation of funds.--The Secretary
    shall reserve 10 percent of such remainder for
    expenditures by the Secretary for the activities
    described in clauses (ii) and (iii).
    ``(ii) Program support.--The Secretary shall
    provide, directly or through a competitive grant
    process, research, training and technical
    assistance, including dissemination of research
    and information regarding effective and promising
    practices, providing consultation and resources on
    a broad array of teen pregnancy prevention
    strategies, including abstinence and
    contraception, and developing resources and
    materials to support the activities of recipients
    of grants and other State, tribal, and community
    organizations working

    [[Page 351]]

    to reduce teen pregnancy. In carrying out such
    functions, the Secretary shall collaborate with a
    variety of entities that have expertise in the
    prevention of teen pregnancy, HIV and sexually
    transmitted infections, healthy relationships,
    financial literacy, and other topics addressed
    through the personal responsibility education
    programs.
    ``(iii) Evaluation.--The Secretary shall
    evaluate the programs and activities carried out
    with funds made available through allotments or
    grants under this section.

    ``(d) Administration.--
    ``(1) In general.--The Secretary shall administer this
    section through the Assistant Secretary for the Administration
    for Children and Families within the Department of Health and
    Human Services.
    ``(2) Application of other provisions of title.--
    ``(A) In general.--Except as provided in
    subparagraph (B), the other provisions of this title
    shall not apply to allotments or grants made under this
    section.
    ``(B) Exceptions.--The following provisions of this
    title shall apply to allotments and grants made under
    this section to the same extent and in the same manner
    as such provisions apply to allotments made under
    section 502(c):
    ``(i) Section 504(b)(6) (relating to
    prohibition on payments to excluded individuals
    and entities).
    ``(ii) Section 504(c) (relating to the use of
    funds for the purchase of technical assistance).
    ``(iii) Section 504(d) (relating to a
    limitation on administrative expenditures).
    ``(iv) Section 506 (relating to reports and
    audits), but only to the extent determined by the
    Secretary to be appropriate for grants made under
    this section.
    ``(v) Section 507 (relating to penalties for
    false statements).
    ``(vi) Section 508 (relating to
    nondiscrimination).

    ``(e) Definitions.--In this section:
    ``(1) Age-appropriate.--The term `age-appropriate', with
    respect to the information in pregnancy prevention, means
    topics, messages, and teaching methods suitable to particular
    ages or age groups of children and adolescents, based on
    developing cognitive, emotional, and behavioral capacity typical
    for the age or age group.
    ``(2) Medically accurate and complete.--The term `medically
    accurate and complete' means verified or supported by the weight
    of research conducted in compliance with accepted scientific
    methods and--
    ``(A) published in peer-reviewed journals, where
    applicable; or
    ``(B) comprising information that leading
    professional organizations and agencies with relevant
    expertise in the field recognize as accurate, objective,
    and complete.
    ``(3) Indian tribes; tribal organizations.--The terms
    `Indian tribe' and `Tribal organization' have the meanings given
    such terms in section 4 of the Indian Health Care Improvement
    Act (25 U.S.C. 1603)).

    [[Page 352]]

    ``(4) Youth.--The term `youth' means an individual who has
    attained age 10 but has not attained age 20.

    ``(f) Appropriation.--For the purpose of carrying out this section,
    there is appropriated, out of any money in the Treasury not otherwise
    appropriated, $75,000,000 for each of fiscal years 2010 through 2014.
    Amounts appropriated under this subsection shall remain available until
    expended.''.

    SEC. 2954. RESTORATION OF FUNDING FOR ABSTINENCE EDUCATION.

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

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

    (a) Transition Planning.--Section 475(5)(H) of the Social Security
    Act (42 U.S.C. 675(5)(H)) is amended by inserting ``includes information
    about the importance of designating another individual to make health
    care treatment decisions on behalf of the child if the child becomes
    unable to participate in such decisions and the child does not have, or
    does not want, a relative who would otherwise be authorized under State
    law to make such decisions, and provides the child with the option to
    execute a health care power of attorney, health care proxy, or other
    similar document recognized under State law,'' after ``employment
    services,''.
    (b) Independent Living Education.--Section 477(b)(3) of such Act (42
    U.S.C. 677(b)(3)) is amended by adding at the end the following:
    ``(K) <> A certification by
    the chief executive officer of the State that the State
    will ensure that an adolescent participating in the
    program under this section are provided with education
    about the importance of designating another individual
    to make health care treatment decisions on behalf of the
    adolescent if the adolescent becomes unable to
    participate in such decisions and the adolescent does
    not have, or does not want, a relative who would
    otherwise be authorized under State law to make such
    decisions, whether a health care power of attorney,
    health care proxy, or other similar document is
    recognized under State law, and how to execute such a
    document if the adolescent wants to do so.''.

    (c) Health Oversight and Coordination Plan.--Section 422(b)(15)(A)
    of such Act (42 U.S.C. 622(b)(15)(A)) is amended--
    (1) in clause (v), by striking ``and'' at the end; and
    (2) by adding at the end the following:
    ``(vii) steps to ensure that the components of
    the transition plan development process required
    under

    [[Page 353]]

    section 475(5)(H) that relate to the health care
    needs of children aging out of foster care,
    including the requirements to include options for
    health insurance, information about a health care
    power of attorney, health care proxy, or other
    similar document recognized under State law, and
    to provide the child with the option to execute
    such a document, are met; and''.

    (d) <> Effective Date.--The amendments made
    by this section take effect on October 1, 2010.

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

    Subtitle A--Transforming the Health Care Delivery System

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

    SEC. 3001. HOSPITAL VALUE-BASED PURCHASING PROGRAM.

    (a) Program.--
    (1) In general.--Section 1886 of the Social Security Act (42
    U.S.C. 1395ww), as amended by section 4102(a) of the HITECH Act
    (Public Law 111-5), is amended by adding at the end the
    following new subsection:

    ``(o) Hospital Value-Based Purchasing Program.--
    ``(1) Establishment.--
    ``(A) In general.--Subject to the succeeding
    provisions of this subsection, the Secretary shall
    establish a hospital value-based purchasing program (in
    this subsection referred to as the `Program') under
    which value-based incentive payments are made in a
    fiscal year to hospitals that meet the performance
    standards under paragraph (3) for the performance period
    for such fiscal year (as established under paragraph
    (4)).
    ``(B) Program to begin in fiscal year 2013.--The
    Program shall apply to payments for discharges occurring
    on or after October 1, 2012.
    ``(C) Applicability of program to hospitals.--
    ``(i) In general.--For purposes of this
    subsection, subject to clause (ii), the term
    `hospital' means a subsection (d) hospital (as
    defined in subsection (d)(1)(B)).
    ``(ii) Exclusions.--The term `hospital' shall
    not include, with respect to a fiscal year, a
    hospital--
    ``(I) that is subject to the payment
    reduction under subsection
    (b)(3)(B)(viii)(I) for such fiscal year;
    ``(II) for which, during the
    performance period for such fiscal year,
    the Secretary has cited deficiencies
    that pose immediate jeopardy to the
    health or safety of patients;

    [[Page 354]]

    ``(III) for which there are not a
    minimum number (as determined by the
    Secretary) of measures that apply to the
    hospital for the performance period for
    such fiscal year; or
    ``(IV) for which there are not a
    minimum number (as determined by the
    Secretary) of cases for the measures
    that apply to the hospital for the
    performance period for such fiscal year.
    ``(iii) Independent analysis.--For purposes of
    determining the minimum numbers under subclauses
    (III) and (IV) of clause (ii), the Secretary shall
    have conducted an independent analysis of what
    numbers are appropriate.
    ``(iv) Exemption.--In the case of a hospital
    that is paid under section 1814(b)(3), the
    Secretary may exempt such hospital from the
    application of this subsection if the State which
    is paid under such section submits an annual
    report to the Secretary describing how a similar
    program in the State for a participating hospital
    or hospitals achieves or surpasses the measured
    results in terms of patient health outcomes and
    cost savings established under this subsection.
    ``(2) Measures.--
    ``(A) In general.--The Secretary shall select
    measures for purposes of the Program. Such measures
    shall be selected from the measures specified under
    subsection (b)(3)(B)(viii).
    ``(B) Requirements.--
    ``(i) For fiscal year 2013.--For value-based
    incentive payments made with respect to discharges
    occurring during fiscal year 2013, the Secretary
    shall ensure the following:
    ``(I) Conditions or procedures.--
    Measures are selected under subparagraph
    (A) that cover at least the following 5
    specific conditions or procedures:
    ``(aa) Acute myocardial
    infarction (AMI).
    ``(bb) Heart failure.
    ``(cc) Pneumonia.
    ``(dd) Surgeries, as
    measured by the Surgical Care
    Improvement Project (formerly
    referred to as `Surgical
    Infection Prevention' for
    discharges occurring before July
    2006).
    ``(ee) Healthcare-associated
    infections, as measured by the
    prevention metrics and targets
    established in the HHS Action
    Plan to Prevent Healthcare-
    Associated Infections (or any
    successor plan) of the
    Department of Health and Human
    Services.
    ``(II) HCAHPS.--Measures selected
    under subparagraph (A) shall be related
    to the Hospital Consumer Assessment of
    Healthcare Providers and Systems survey
    (HCAHPS).
    ``(ii) Inclusion of efficiency measures.--For
    value-based incentive payments made with respect
    to

    [[Page 355]]

    discharges occurring during fiscal year 2014 or a
    subsequent fiscal year, the Secretary shall ensure
    that measures selected under subparagraph (A)
    include efficiency measures, including measures of
    `Medicare spending per beneficiary'. Such measures
    shall be adjusted for factors such as age, sex,
    race, severity of illness, and other factors that
    the Secretary determines appropriate.
    ``(C) Limitations.--
    ``(i) Time requirement for prior reporting and
    notice.--The Secretary may not select a measure
    under subparagraph (A) for use under the Program
    with respect to a performance period for a fiscal
    year (as established under paragraph (4)) unless
    such measure has been specified under subsection
    (b)(3)(B)(viii) and included on the Hospital
    Compare Internet website for at least 1 year prior
    to the beginning of such performance period.
    ``(ii) Measure not applicable unless hospital
    furnishes services appropriate to the measure.--A
    measure selected under subparagraph (A) shall not
    apply to a hospital if such hospital does not
    furnish services appropriate to such measure.
    ``(D) Replacing measures.--Subclause (VI) of
    subsection (b)(3)(B)(viii) shall apply to measures
    selected under subparagraph (A) in the same manner as
    such subclause applies to measures selected under such
    subsection.
    ``(3) Performance standards.--
    ``(A) Establishment.--The Secretary shall establish
    performance standards with respect to measures selected
    under paragraph (2) for a performance period for a
    fiscal year (as established under paragraph (4)).
    ``(B) Achievement and improvement.--The performance
    standards established under subparagraph (A) shall
    include levels of achievement and improvement.
    ``(C) Timing.--The Secretary shall establish and
    announce the performance standards under subparagraph
    (A) not later than 60 days prior to the beginning of the
    performance period for the fiscal year involved.
    ``(D) Considerations in establishing standards.--In
    establishing performance standards with respect to
    measures under this paragraph, the Secretary shall take
    into account appropriate factors, such as--
    ``(i) practical experience with the measures
    involved, including whether a significant
    proportion of hospitals failed to meet the
    performance standard during previous performance
    periods;
    ``(ii) historical performance standards;
    ``(iii) improvement rates; and
    ``(iv) the opportunity for continued
    improvement.
    ``(4) Performance period.--For purposes of the Program, the
    Secretary shall establish the performance period for a fiscal
    year. Such performance period shall begin and end prior to the
    beginning of such fiscal year.
    ``(5) Hospital performance score.--
    ``(A) In general.--Subject to subparagraph (B), the
    Secretary shall develop a methodology for assessing the

    [[Page 356]]

    total performance of each hospital based on performance
    standards with respect to the measures selected under
    paragraph (2) for a performance period (as established
    under paragraph (4)). Using such methodology, the
    Secretary shall provide for an assessment (in this
    subsection referred to as the `hospital performance
    score') for each hospital for each performance period.
    ``(B) Application.--
    ``(i) Appropriate distribution.--The Secretary
    shall ensure that the application of the
    methodology developed under subparagraph (A)
    results in an appropriate distribution of value-
    based incentive payments under paragraph (6) among
    hospitals achieving different levels of hospital
    performance scores, with hospitals achieving the
    highest hospital performance scores receiving the
    largest value-based incentive payments.
    ``(ii) Higher of achievement or improvement.--
    The methodology developed under subparagraph (A)
    shall provide that the hospital performance score
    is determined using the higher of its achievement
    or improvement score for each measure.
    ``(iii) Weights.--The methodology developed
    under subparagraph (A) shall provide for the
    assignment of weights for categories of measures
    as the Secretary determines appropriate.
    ``(iv) No minimum performance standard.--The
    Secretary shall not set a minimum performance
    standard in determining the hospital performance
    score for any hospital.
    ``(v) Reflection of measures applicable to the
    hospital.--The hospital performance score for a
    hospital shall reflect the measures that apply to
    the hospital.
    ``(6) Calculation of value-based incentive payments.--
    ``(A) <> In general.--In the
    case of a hospital that the Secretary determines meets
    (or exceeds) the performance standards under paragraph
    (3) for the performance period for a fiscal year (as
    established under paragraph (4)), the Secretary shall
    increase the base operating DRG payment amount (as
    defined in paragraph (7)(D)), as determined after
    application of paragraph (7)(B)(i), for a hospital for
    each discharge occurring in such fiscal year by the
    value-based incentive payment amount.
    ``(B) Value-based incentive payment amount.--The
    value-based incentive payment amount for each discharge
    of a hospital in a fiscal year shall be equal to the
    product of--
    ``(i) the base operating DRG payment amount
    (as defined in paragraph (7)(D)) for the discharge
    for the hospital for such fiscal year; and
    ``(ii) the value-based incentive payment
    percentage specified under subparagraph (C) for
    the hospital for such fiscal year.
    ``(C) Value-based incentive payment percentage.--

    [[Page 357]]

    ``(i) In general.--The Secretary shall specify
    a value-based incentive payment percentage for a
    hospital for a fiscal year.
    ``(ii) Requirements.--In specifying the value-
    based incentive payment percentage for each
    hospital for a fiscal year under clause (i), the
    Secretary shall ensure that--
    ``(I) such percentage is based on
    the hospital performance score of the
    hospital under paragraph (5); and
    ``(II) the total amount of value-
    based incentive payments under this
    paragraph to all hospitals in such
    fiscal year is equal to the total amount
    available for value-based incentive
    payments for such fiscal year under
    paragraph (7)(A), as estimated by the
    Secretary.
    ``(7) Funding for value-based incentive payments.--
    ``(A) Amount.--The total amount available for value-
    based incentive payments under paragraph (6) for all
    hospitals for a fiscal year shall be equal to the total
    amount of reduced payments for all hospitals under
    subparagraph (B) for such fiscal year, as estimated by
    the Secretary.
    ``(B) Adjustment to payments.--
    ``(i) In general.--The Secretary shall reduce
    the base operating DRG payment amount (as defined
    in subparagraph (D)) for a hospital for each
    discharge in a fiscal year (beginning with fiscal
    year 2013) by an amount equal to the applicable
    percent (as defined in subparagraph (C)) of the
    base operating DRG payment amount for the
    discharge for the hospital for such fiscal year.
    The Secretary shall make such reductions for all
    hospitals in the fiscal year involved, regardless
    of whether or not the hospital has been determined
    by the Secretary to have earned a value-based
    incentive payment under paragraph (6) for such
    fiscal year.
    ``(ii) No effect on other payments.--Payments
    described in items (aa) and (bb) of subparagraph
    (D)(i)(II) for a hospital shall be determined as
    if this subsection had not been enacted.
    ``(C) Applicable percent defined.--For purposes of
    subparagraph (B), the term `applicable percent' means--
    ``(i) with respect to fiscal year 2013, 1.0
    percent;
    ``(ii) with respect to fiscal year 2014, 1.25
    percent;
    ``(iii) with respect to fiscal year 2015, 1.5
    percent;
    ``(iv) with respect to fiscal year 2016, 1.75
    percent; and
    ``(v) with respect to fiscal year 2017 and
    succeeding fiscal years, 2 percent.
    ``(D) Base operating drg payment amount defined.--
    ``(i) In general.--Except as provided in
    clause (ii), in this subsection, the term `base
    operating DRG payment amount' means, with respect
    to a hospital for a fiscal year--
    ``(I) the payment amount that would
    otherwise be made under subsection (d)
    (determined without

    [[Page 358]]

    regard to subsection (q)) for a
    discharge if this subsection did not
    apply; reduced by
    ``(II) any portion of such payment
    amount that is attributable to--
    ``(aa) payments under
    paragraphs (5)(A), (5)(B),
    (5)(F), and (12) of subsection
    (d); and
    ``(bb) such other payments
    under subsection (d) determined
    appropriate by the Secretary.
    ``(ii) Special rules for certain hospitals.--
    ``(I) Sole community hospitals and
    medicare-dependent, small rural
    hospitals.--In the case of a medicare-
    dependent, small rural hospital (with
    respect to discharges occurring during
    fiscal year 2012 and 2013) or a sole
    community hospital, in applying
    subparagraph (A)(i), the payment amount
    that would otherwise be made under
    subsection (d) shall be determined
    without regard to subparagraphs (I) and
    (L) of subsection (b)(3) and
    subparagraphs (D) and (G) of subsection
    (d)(5).
    ``(II) Hospitals paid under section
    1814.--In the case of a hospital that is
    paid under section 1814(b)(3), the term
    `base operating DRG payment amount'
    means the payment amount under such
    section.
    ``(8) Announcement of net result of
    adjustments. <> --Under the Program, the
    Secretary shall, not later than 60 days prior to the fiscal year
    involved, inform each hospital of the adjustments to payments to
    the hospital for discharges occurring in such fiscal year under
    paragraphs (6) and (7)(B)(i).
    ``(9) No effect in subsequent fiscal years.--The value-based
    incentive payment under paragraph (6) and the payment reduction
    under paragraph (7)(B)(i) shall each apply only with respect to
    the fiscal year involved, and the Secretary shall not take into
    account such value-based incentive payment or payment reduction
    in making payments to a hospital under this section in a
    subsequent fiscal year.
    ``(10) Public reporting.--
    ``(A) Hospital specific information.--
    ``(i) In general.--The Secretary shall make
    information available to the public regarding the
    performance of individual hospitals under the
    Program, including--
    ``(I) the performance of the
    hospital with respect to each measure
    that applies to the hospital;
    ``(II) the performance of the
    hospital with respect to each condition
    or procedure; and
    ``(III) the hospital performance
    score assessing the total performance of
    the hospital.
    ``(ii) Opportunity to review and submit
    corrections.--The Secretary shall ensure that a
    hospital has the opportunity to review, and submit
    corrections for, the information to be made public
    with respect to the hospital under clause (i)
    prior to such information being made public.

    [[Page 359]]

    ``(iii) Website.--Such information shall be
    posted on the Hospital Compare Internet website in
    an easily understandable format.
    ``(B) Aggregate information.-- <> The Secretary shall periodically post on the
    Hospital Compare Internet website aggregate information
    on the Program, including--
    ``(i) the number of hospitals receiving value-
    based incentive payments under paragraph (6) and
    the range and total amount of such value-based
    incentive payments; and
    ``(ii) the number of hospitals receiving less
    than the maximum value-based incentive payment
    available to the hospital for the fiscal year
    involved and the range and amount of such
    payments.
    ``(11) Implementation.--
    ``(A) Appeals.--The Secretary shall establish a
    process by which hospitals may appeal the calculation of
    a hospital's performance assessment with respect to the
    performance standards established under paragraph (3)(A)
    and the hospital performance score under paragraph (5).
    The Secretary shall ensure that such process provides
    for resolution of such appeals in a timely manner.
    ``(B) Limitation on review.--Except as provided in
    subparagraph (A), there shall be no administrative or
    judicial review under section 1869, section 1878, or
    otherwise of the following:
    ``(i) The methodology used to determine the
    amount of the value-based incentive payment under
    paragraph (6) and the determination of such
    amount.
    ``(ii) The determination of the amount of
    funding available for such value-based incentive
    payments under paragraph (7)(A) and the payment
    reduction under paragraph (7)(B)(i).
    ``(iii) The establishment of the performance
    standards under paragraph (3) and the performance
    period under paragraph (4).
    ``(iv) The measures specified under subsection
    (b)(3)(B)(viii) and the measures selected under
    paragraph (2).
    ``(v) The methodology developed under
    paragraph (5) that is used to calculate hospital
    performance scores and the calculation of such
    scores.
    ``(vi) The validation methodology specified in
    subsection (b)(3)(B)(viii)(XI).
    ``(C) Consultation with small hospitals.--The
    Secretary shall consult with small rural and urban
    hospitals on the application of the Program to such
    hospitals.
    ``(12) Promulgation of regulations.--The Secretary shall
    promulgate regulations to carry out the Program, including the
    selection of measures under paragraph (2), the methodology
    developed under paragraph (5) that is used to calculate hospital
    performance scores, and the methodology used to determine the
    amount of value-based incentive payments under paragraph (6).''.
    (2) Amendments for reporting of hospital quality
    information.--Section 1886(b)(3)(B)(viii) of the Social Security
    Act (42 U.S.C. 1395ww(b)(3)(B)(viii)) is amended--

    [[Page 360]]

    (A) in subclause (II), by adding at the end the
    following sentence: ``The Secretary may require
    hospitals to submit data on measures that are not used
    for the determination of value-based incentive payments
    under subsection (o).'';
    (B) in subclause (V), by striking ``beginning with
    fiscal year 2008'' and inserting ``for fiscal years 2008
    through 2012'';
    (C) in subclause (VII), in the first sentence, by
    striking ``data submitted'' and inserting ``information
    regarding measures submitted''; and
    (D) by adding at the end the following new
    subclauses:

    ``(VIII) <> Effective for payments beginning
    with fiscal year 2013, with respect to quality measures for outcomes of
    care, the Secretary shall provide for such risk adjustment as the
    Secretary determines to be appropriate to maintain incentives for
    hospitals to treat patients with severe illnesses or conditions.

    ``(IX)(aa) Subject to item (bb), effective for payments beginning
    with fiscal year 2013, each measure specified by the Secretary under
    this clause shall be endorsed by the entity with a contract under
    section 1890(a).
    ``(bb) In the case of a specified area or medical topic determined
    appropriate by the Secretary for which a feasible and practical measure
    has not been endorsed by the entity with a contract under section
    1890(a), the Secretary may specify a measure that is not so endorsed as
    long as due consideration is given to measures that have been endorsed
    or adopted by a consensus organization identified by the Secretary.
    ``(X) To the extent practicable, the Secretary shall, with input
    from consensus organizations and other stakeholders, take steps to
    ensure that the measures specified by the Secretary under this clause
    are coordinated and aligned with quality measures applicable to--
    ``(aa) physicians under section 1848(k); and
    ``(bb) other providers of services and suppliers under this
    title.

    ``(XI) <> The Secretary shall establish a
    process to validate measures specified under this clause as appropriate.
    Such process shall include the auditing of a number of randomly selected
    hospitals sufficient to ensure validity of the reporting program under
    this clause as a whole and shall provide a hospital with an opportunity
    to appeal the validation of measures reported by such hospital.''.
    (3) Website improvements.--Section 1886(b)(3)(B) of the
    Social Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by
    section 4102(b) of the HITECH Act (Public Law 111-5), is amended
    by adding at the end the following new clause:

    ``(x)(I) <> The Secretary shall develop
    standard Internet website reports tailored to meet the needs of various
    stakeholders such as hospitals, patients, researchers, and policymakers.
    The Secretary shall seek input from such stakeholders in determining the
    type of information that is useful and the formats that best facilitate
    the use of the information.

    ``(II) The Secretary shall modify the Hospital Compare Internet
    website to make the use and navigation of that website readily available
    to individuals accessing it.''.
    (4) GAO study and report.--
    (A) Study.--The Comptroller General of the United
    States shall conduct a study on the performance of the

    [[Page 361]]

    hospital value-based purchasing program established
    under section 1886(o) of the Social Security Act, as
    added by paragraph (1). Such study shall include an
    analysis of the impact of such program on--
    (i) the quality of care furnished to Medicare
    beneficiaries, including diverse Medicare
    beneficiary populations (such as diverse in terms
    of race, ethnicity, and socioeconomic status);
    (ii) expenditures under the Medicare program,
    including any reduced expenditures under Part A of
    title XVIII of such Act that are attributable to
    the improvement in the delivery of inpatient
    hospital services by reason of such hospital
    value-based purchasing program;
    (iii) the quality performance among safety net
    hospitals and any barriers such hospitals face in
    meeting the performance standards applicable under
    such hospital value-based purchasing program; and
    (iv) the quality performance among small rural
    and small urban hospitals and any barriers such
    hospitals face in meeting the performance
    standards applicable under such hospital value-
    based purchasing program.
    (B) Reports.--
    (i) Interim report.--Not later than October 1,
    2015, the Comptroller General of the United States
    shall submit to Congress an interim report
    containing the results of the study conducted
    under subparagraph (A), together with
    recommendations for such legislation and
    administrative action as the Comptroller General
    determines appropriate.
    (ii) Final report.--Not later than July 1,
    2017, the Comptroller General of the United States
    shall submit to Congress a report containing the
    results of the study conducted under subparagraph
    (A), together with recommendations for such
    legislation and administrative action as the
    Comptroller General determines appropriate.
    (5) HHS study and report.--
    (A) Study.--The Secretary of Health and Human
    Services shall conduct a study on the performance of the
    hospital value-based purchasing program established
    under section 1886(o) of the Social Security Act, as
    added by paragraph (1). Such study shall include an
    analysis--
    (i) of ways to improve the hospital value-
    based purchasing program and ways to address any
    unintended consequences that may occur as a result
    of such program;
    (ii) of whether the hospital value-based
    purchasing program resulted in lower spending
    under the Medicare program under title XVIII of
    such Act or other financial savings to hospitals;
    (iii) the appropriateness of the Medicare
    program sharing in any savings generated through
    the hospital value-based purchasing program; and
    (iv) any other area determined appropriate by
    the Secretary.

    [[Page 362]]

    (B) Report.--Not later than January 1, 2016, the
    Secretary of Health and Human Services shall submit to
    Congress a report containing the results of the study
    conducted under subparagraph (A), together with
    recommendations for such legislation and administrative
    action as the Secretary determines appropriate.

    (b) <> Value-Based Purchasing
    Demonstration Programs.--
    (1) Value-based purchasing demonstration program for
    inpatient critical access hospitals.--
    (A) Establishment.--
    (i) In general.-- <> Not
    later than 2 years after the date of enactment of
    this Act, the Secretary of Health and Human
    Services (in this subsection referred to as the
    ``Secretary'') shall establish a demonstration
    program under which the Secretary establishes a
    value-based purchasing program under the Medicare
    program under title XVIII of the Social Security
    Act for critical access hospitals (as defined in
    paragraph (1) of section 1861(mm) of such Act (42
    U.S.C. 1395x(mm))) with respect to inpatient
    critical access hospital services (as defined in
    paragraph (2) of such section) in order to test
    innovative methods of measuring and rewarding
    quality and efficient health care furnished by
    such hospitals.
    (ii) Duration.--The demonstration program
    under this paragraph shall be conducted for a 3-
    year period.
    (iii) Sites.--The Secretary shall conduct the
    demonstration program under this paragraph at an
    appropriate number (as determined by the
    Secretary) of critical access hospitals. The
    Secretary shall ensure that such hospitals are
    representative of the spectrum of such hospitals
    that participate in the Medicare program.
    (B) Waiver authority.--The Secretary may waive such
    requirements of titles XI and XVIII of the Social
    Security Act as may be necessary to carry out the
    demonstration program under this paragraph.
    (C) Budget neutrality requirement.--In conducting
    the demonstration program under this section, the
    Secretary shall ensure that the aggregate payments made
    by the Secretary do not exceed the amount which the
    Secretary would have paid if the demonstration program
    under this section was not implemented.
    (D) Report.--Not later than 18 months after the
    completion of the demonstration program under this
    paragraph, the Secretary shall submit to Congress a
    report on the demonstration program together with--
    (i) recommendations on the establishment of a
    permanent value-based purchasing program under the
    Medicare program for critical access hospitals
    with respect to inpatient critical access hospital
    services; and
    (ii) recommendations for such other
    legislation and administrative action as the
    Secretary determines appropriate.

    [[Page 363]]

    (2) Value-based purchasing demonstration program for
    hospitals excluded from hospital value-based purchasing program
    as a result of insufficient numbers of measures and cases.--
    (A) Establishment.--
    (i) In general.-- <> Not
    later than 2 years after the date of enactment of
    this Act, the Secretary shall establish a
    demonstration program under which the Secretary
    establishes a value-based purchasing program under
    the Medicare program under title XVIII of the
    Social Security Act for applicable hospitals (as
    defined in clause (ii)) with respect to inpatient
    hospital services (as defined in section 1861(b)
    of the Social Security Act (42 U.S.C. 1395x(b)))
    in order to test innovative methods of measuring
    and rewarding quality and efficient health care
    furnished by such hospitals.
    (ii) Applicable hospital defined.--For
    purposes of this paragraph, the term ``applicable
    hospital'' means a hospital described in subclause
    (III) or (IV) of section 1886(o)(1)(C)(ii) of the
    Social Security Act, as added by subsection
    (a)(1).
    (iii) Duration.--The demonstration program
    under this paragraph shall be conducted for a 3-
    year period.
    (iv) Sites.--The Secretary shall conduct the
    demonstration program under this paragraph at an
    appropriate number (as determined by the
    Secretary) of applicable hospitals. The Secretary
    shall ensure that such hospitals are
    representative of the spectrum of such hospitals
    that participate in the Medicare program.
    (B) Waiver authority.--The Secretary may waive such
    requirements of titles XI and XVIII of the Social
    Security Act as may be necessary to carry out the
    demonstration program under this paragraph.
    (C) Budget neutrality requirement.--In conducting
    the demonstration program under this section, the
    Secretary shall ensure that the aggregate payments made
    by the Secretary do not exceed the amount which the
    Secretary would have paid if the demonstration program
    under this section was not implemented.
    (D) Report.--Not later than 18 months after the
    completion of the demonstration program under this
    paragraph, the Secretary shall submit to Congress a
    report on the demonstration program together with--
    (i) recommendations on the establishment of a
    permanent value-based purchasing program under the
    Medicare program for applicable hospitals with
    respect to inpatient hospital services; and
    (ii) recommendations for such other
    legislation and administrative action as the
    Secretary determines appropriate.

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

    (a) Extension.--Section 1848(m) of the Social Security Act (42
    U.S.C. 1395w-4(m)) is amended--

    [[Page 364]]

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

    (b) Incentive Payment Adjustment for Quality Reporting.--Section
    1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)) is amended by
    adding at the end the following new paragraph:
    ``(8) Incentives for quality reporting.--
    ``(A) Adjustment.--
    ``(i) In general.--With respect to covered
    professional services furnished by an eligible
    professional during 2015 or any subsequent year,
    if the eligible professional does not
    satisfactorily submit data on quality measures for
    covered professional services for the quality
    reporting period for the year (as determined under
    subsection (m)(3)(A)), the fee schedule amount for
    such services furnished by such professional
    during the year (including the fee schedule amount
    for purposes of determining a payment based on
    such amount) shall be equal to the applicable
    percent of the fee schedule amount that would
    otherwise apply to such services under this
    subsection (determined after application of
    paragraphs (3), (5), and (7), but without regard
    to this paragraph).
    ``(ii) Applicable percent.--For purposes of
    clause (i), the term `applicable percent' means--
    ``(I) for 2015, 98.5 percent; and
    ``(II) for 2016 and each subsequent
    year, 98 percent.

    [[Page 365]]

    ``(B) Application.--
    ``(i) Physician reporting system rules.--
    Paragraphs (5), (6), and (8) of subsection (k)
    shall apply for purposes of this paragraph in the
    same manner as they apply for purposes of such
    subsection.
    ``(ii) Incentive payment validation rules.--
    Clauses (ii) and (iii) of subsection (m)(5)(D)
    shall apply for purposes of this paragraph in a
    similar manner as they apply for purposes of such
    subsection.
    ``(C) Definitions.--For purposes of this paragraph:
    ``(i) Eligible professional; covered
    professional services.--The terms `eligible
    professional' and `covered professional services'
    have the meanings given such terms in subsection
    (k)(3).
    ``(ii) Physician reporting system.--The term
    `physician reporting system' means the system
    established under subsection (k).
    ``(iii) Quality reporting period.--The term
    `quality reporting period' means, with respect to
    a year, a period specified by the Secretary.''.

    (c) Maintenance of Certification Programs.--
    (1) In general.--Section 1848(k)(4) of the Social Security
    Act (42 U.S.C. 1395w-4(k)(4)) is amended by inserting ``or
    through a Maintenance of Certification program operated by a
    specialty body of the American Board of Medical Specialties that
    meets the criteria for such a registry'' after ``Database)''.
    (2) <> Effective date.--The
    amendment made by paragraph (1) shall apply for years after
    2010.

    (d) Integration of Physician Quality Reporting and EHR Reporting.--
    Section 1848(m) of the Social Security Act (42 U.S.C. 1395w-4(m)) is
    amended by adding at the end the following new paragraph:
    ``(7) Integration of physician quality reporting and ehr
    reporting. <> --Not later than January 1, 2012,
    the Secretary shall develop a plan to integrate reporting on
    quality measures under this subsection with reporting
    requirements under subsection (o) relating to the meaningful use
    of electronic health records. Such integration shall consist of
    the following:
    ``(A) The selection of measures, the reporting of
    which would both demonstrate--
    ``(i) meaningful use of an electronic health
    record for purposes of subsection (o); and
    ``(ii) quality of care furnished to an
    individual.
    ``(B) Such other activities as specified by the
    Secretary.''.

    (e) Feedback.--Section 1848(m)(5) of the Social Security Act (42
    U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new
    subparagraph:
    ``(H) Feedback.--The Secretary shall provide timely
    feedback to eligible professionals on the performance of
    the eligible professional with respect to satisfactorily
    submitting data on quality measures under this
    subsection.''.

    (f) Appeals.--Such section is further amended--
    (1) in subparagraph (E), by striking ``There shall'' and
    inserting ``Except as provided in subparagraph (I), there
    shall''; and

    [[Page 366]]

    (2) by adding at the end the following new subparagraph:
    ``(I) Informal appeals process.--
    <> The Secretary shall, by not later
    than January 1, 2011, establish and have in place an
    informal process for eligible professionals to seek a
    review of the determination that an eligible
    professional did not satisfactorily submit data on
    quality measures under this subsection.''.

    SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM.

    (a) In General.--Section 1848(n) of the Social Security Act (42
    U.S.C. 1395w-4(n)) is amended--
    (1) in paragraph (1)--
    (A) in subparagraph (A)--
    (i) by striking ``general.--The Secretary''
    and inserting ``general.--
    ``(i) Establishment.--The Secretary'';
    (ii) in clause (i), as added by clause (i), by
    striking ``the `Program')'' and all that follows
    through the period at the end of the second
    sentence and inserting ``the `Program').''; and
    (iii) by adding at the end the following new
    clauses:
    ``(ii) Reports on resources.--The Secretary
    shall use claims data under this title (and may
    use other data) to provide confidential reports to
    physicians (and, as determined appropriate by the
    Secretary, to groups of physicians) that measure
    the resources involved in furnishing care to
    individuals under this title.
    ``(iii) Inclusion of certain information.--If
    determined appropriate by the Secretary, the
    Secretary may include information on the quality
    of care furnished to individuals under this title
    by the physician (or group of physicians) in such
    reports.''; and
    (B) in subparagraph (B), by striking ``subparagraph
    (A)'' and inserting ``subparagraph (A)(ii)'';
    (2) in paragraph (4)--
    (A) in the heading, by inserting ``initial'' after
    ``focus''; and
    (B) in the matter preceding subparagraph (A), by
    inserting ``initial'' after ``focus the'';
    (3) in paragraph (6), by adding at the end the following new
    sentence: ``For adjustments for reports on utilization under
    paragraph (9), see subparagraph (D) of such paragraph.''; and
    (4) by adding at the end the following new paragraphs:
    ``(9) Reports on utilization.--
    ``(A) Development of episode grouper.--
    ``(i) In general.--The Secretary shall develop
    an episode grouper that combines separate but
    clinically related items and services into an
    episode of care for an individual, as appropriate.
    ``(ii) Timeline for development.--The episode
    grouper described in subparagraph (A) shall be
    developed by not later than January 1, 2012.
    ``(iii) Public availability.--The Secretary
    shall make the details of the episode grouper
    described in subparagraph (A) available to the
    public.
    ``(iv) Endorsement.--The Secretary shall seek
    endorsement of the episode grouper described in

    [[Page 367]]

    subparagraph (A) by the entity with a contract
    under section 1890(a).
    ``(B) Reports on utilization.--Effective beginning
    with 2012, the Secretary shall provide reports to
    physicians that compare, as determined appropriate by
    the Secretary, patterns of resource use of the
    individual physician to such patterns of other
    physicians.
    ``(C) Analysis of data.--The Secretary shall, for
    purposes of preparing reports under this paragraph,
    establish methodologies as appropriate, such as to--
    ``(i) attribute episodes of care, in whole or
    in part, to physicians;
    ``(ii) identify appropriate physicians for
    purposes of comparison under subparagraph (B); and
    ``(iii) aggregate episodes of care attributed
    to a physician under clause (i) into a composite
    measure per individual.
    ``(D) Data adjustment.--In preparing reports under
    this paragraph, the Secretary shall make appropriate
    adjustments, including adjustments--
    ``(i) to account for differences in
    socioeconomic and demographic characteristics,
    ethnicity, and health status of individuals (such
    as to recognize that less healthy individuals may
    require more intensive interventions); and
    ``(ii) to eliminate the effect of geographic
    adjustments in payment rates (as described in
    subsection (e)).
    ``(E) Public availability of methodology.--The
    Secretary shall make available to the public--
    ``(i) the methodologies established under
    subparagraph (C);
    ``(ii) information regarding any adjustments
    made to data under subparagraph (D); and
    ``(iii) aggregate reports with respect to
    physicians.
    ``(F) Definition of physician.--In this paragraph:
    ``(i) In general.--The term `physician' has
    the meaning given that term in section 1861(r)(1).
    ``(ii) Treatment of groups.--Such term
    includes, as the Secretary determines appropriate,
    a group of physicians.
    ``(G) Limitations on review.--There shall be no
    administrative or judicial review under section 1869,
    section 1878, or otherwise of the establishment of the
    methodology under subparagraph (C), including the
    determination of an episode of care under such
    methodology.
    ``(10) Coordination with other value-based purchasing
    reforms.--The Secretary shall coordinate the Program with the
    value-based payment modifier established under subsection (p)
    and, as the Secretary determines appropriate, other similar
    provisions of this title.''.

    (b) Conforming Amendment.--Section 1890(b) of the Social Security
    Act (42 U.S.C. 1395aaa(b)) is amended by adding at the end the following
    new paragraph:
    ``(6) Review and endorsement of episode grouper under the
    physician feedback program.--The entity shall provide for the
    review and, as appropriate, the endorsement of the

    [[Page 368]]

    episode grouper developed by the Secretary under section
    1848(n)(9)(A). Such review shall be conducted on an expedited
    basis.''.

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

    (a) Long-term Care Hospitals.--Section 1886(m) of the Social
    Security Act (42 U.S.C. 1395ww(m)), as amended by section 3401(c), is
    amended by adding at the end the following new paragraph:
    ``(5) Quality reporting.--
    ``(A) Reduction in update for failure to report.--
    ``(i) In general.--Under the system described
    in paragraph (1), for rate year 2014 and each
    subsequent rate year, in the case of a long-term
    care hospital that does not submit data to the
    Secretary in accordance with subparagraph (C) with
    respect to such a rate year, any annual update to
    a standard Federal rate for discharges for the
    hospital during the rate year, and after
    application of paragraph (3), shall be reduced by
    2 percentage points.
    ``(ii) Special rule.--The application of this
    subparagraph may result in such annual update
    being less than 0.0 for a rate year, and may
    result in payment rates under the system described
    in paragraph (1) for a rate year being less than
    such payment rates for the preceding rate year.
    ``(B) Noncumulative application.--Any reduction
    under subparagraph (A) shall apply only with respect to
    the rate year involved and the Secretary shall not take
    into account such reduction in computing the payment
    amount under the system described in paragraph (1) for a
    subsequent rate year.
    ``(C) Submission of quality data.--For rate year
    2014 and each subsequent rate year, each long-term care
    hospital shall submit to the Secretary data on quality
    measures specified under subparagraph (D). Such data
    shall be submitted in a form and manner, and at a time,
    specified by the Secretary for purposes of this
    subparagraph.
    ``(D) Quality measures.--
    ``(i) In general.--Subject to clause (ii), any
    measure specified by the Secretary under this
    subparagraph must have been endorsed by the entity
    with a contract under section 1890(a).
    ``(ii) Exception.--In the case of a specified
    area or medical topic determined appropriate by
    the Secretary for which a feasible and practical
    measure has not been endorsed by the entity with a
    contract under section 1890(a), the Secretary may
    specify a measure that is not so endorsed as long
    as due consideration is given to measures that
    have been endorsed or adopted by a consensus
    organization identified by the Secretary.
    ``(iii) Time frame.--Not later than October 1,
    2012, the Secretary shall publish the measures
    selected under this subparagraph that will be
    applicable with respect to rate year 2014.

    [[Page 369]]

    ``(E) Public availability of data
    submitted. <> --The Secretary shall
    establish procedures for making data submitted under
    subparagraph (C) available to the public.
    Such <>  procedures shall ensure that a
    long-term care hospital has the opportunity to review
    the data that is to be made public with respect to the
    hospital prior to such data being made
    public. <> The Secretary shall
    report quality measures that relate to services
    furnished in inpatient settings in long-term care
    hospitals on the Internet website of the Centers for
    Medicare & Medicaid Services.''.

    (b) Inpatient Rehabilitation Hospitals.--Section 1886(j) of the
    Social Security Act (42 U.S.C. 1395ww(j)) is amended--
    (1) by redesignating paragraph (7) as paragraph (8); and
    (2) by inserting after paragraph (6) the following new
    paragraph:
    ``(7) Quality reporting.--
    ``(A) Reduction in update for failure to report.--
    ``(i) In general.--For purposes of fiscal year
    2014 and each subsequent fiscal year, in the case
    of a rehabilitation facility that does not submit
    data to the Secretary in accordance with
    subparagraph (C) with respect to such a fiscal
    year, after determining the increase factor
    described in paragraph (3)(C), and after
    application of paragraph (3)(D), the Secretary
    shall reduce such increase factor for payments for
    discharges occurring during such fiscal year by 2
    percentage points.
    ``(ii) Special rule.--The application of this
    subparagraph may result in the increase factor
    described in paragraph (3)(C) being less than 0.0
    for a fiscal year, and may result in payment rates
    under this subsection for a fiscal year being less
    than such payment rates for the preceding fiscal
    year.
    ``(B) Noncumulative application.--Any reduction
    under subparagraph (A) shall apply only with respect to
    the fiscal year involved and the Secretary shall not
    take into account such reduction in computing the
    payment amount under this subsection for a subsequent
    fiscal year.
    ``(C) Submission of quality data.--For fiscal year
    2014 and each subsequent rate year, each rehabilitation
    facility shall submit to the Secretary data on quality
    measures specified under subparagraph (D). Such data
    shall be submitted in a form and manner, and at a time,
    specified by the Secretary for purposes of this
    subparagraph.
    ``(D) Quality measures.--
    ``(i) In general.--Subject to clause (ii), any
    measure specified by the Secretary under this
    subparagraph must have been endorsed by the entity
    with a contract under section 1890(a).
    ``(ii) Exception.--In the case of a specified
    area or medical topic determined appropriate by
    the Secretary for which a feasible and practical
    measure has not been endorsed by the entity with a
    contract under section 1890(a), the Secretary may
    specify a measure that is not so endorsed as long
    as due consideration is given to measures that
    have been endorsed or

    [[Page 370]]

    adopted by a consensus organization identified by
    the Secretary.
    ``(iii) Time frame. <> --
    Not later than October 1, 2012, the Secretary
    shall publish the measures selected under this
    subparagraph that will be applicable with respect
    to fiscal year 2014.
    ``(E) Public availability of data
    submitted. <> --The Secretary shall
    establish procedures for making data submitted under
    subparagraph (C) available to the public.
    Such <>  procedures shall ensure that a
    rehabilitation facility has the opportunity to review
    the data that is to be made public with respect to the
    facility prior to such data being made
    public. <>  The Secretary shall
    report quality measures that relate to services
    furnished in inpatient settings in rehabilitation
    facilities on the Internet website of the Centers for
    Medicare & Medicaid Services.''.

    (c) Hospice Programs.--Section 1814(i) of the Social Security Act
    (42 U.S.C. 1395f(i)) is amended--
    (1) by redesignating paragraph (5) as paragraph (6); and
    (2) by inserting after paragraph (4) the following new
    paragraph:
    ``(5) Quality reporting.--
    ``(A) Reduction in update for failure to report.--
    ``(i) In general.--For purposes of fiscal year
    2014 and each subsequent fiscal year, in the case
    of a hospice program that does not submit data to
    the Secretary in accordance with subparagraph (C)
    with respect to such a fiscal year, after
    determining the market basket percentage increase
    under paragraph (1)(C)(ii)(VII) or paragraph
    (1)(C)(iii), as applicable, and after application
    of paragraph (1)(C)(iv), with respect to the
    fiscal year, the Secretary shall reduce such
    market basket percentage increase by 2 percentage
    points.
    ``(ii) Special rule.--The application of this
    subparagraph may result in the market basket
    percentage increase under paragraph
    (1)(C)(ii)(VII) or paragraph (1)(C)(iii), as
    applicable, being less than 0.0 for a fiscal year,
    and may result in payment rates under this
    subsection for a fiscal year being less than such
    payment rates for the preceding fiscal year.
    ``(B) Noncumulative application.--Any reduction
    under subparagraph (A) shall apply only with respect to
    the fiscal year involved and the Secretary shall not
    take into account such reduction in computing the
    payment amount under this subsection for a subsequent
    fiscal year.
    ``(C) Submission of quality data.--For fiscal year
    2014 and each subsequent fiscal year, each hospice
    program shall submit to the Secretary data on quality
    measures specified under subparagraph (D). Such data
    shall be submitted in a form and manner, and at a time,
    specified by the Secretary for purposes of this
    subparagraph.
    ``(D) Quality measures.--
    ``(i) In general.--Subject to clause (ii), any
    measure specified by the Secretary under this
    subparagraph must have been endorsed by the entity
    with a contract under section 1890(a).

    [[Page 371]]

    ``(ii) Exception.--In the case of a specified
    area or medical topic determined appropriate by
    the Secretary for which a feasible and practical
    measure has not been endorsed by the entity with a
    contract under section 1890(a), the Secretary may
    specify a measure that is not so endorsed as long
    as due consideration is given to measures that
    have been endorsed or adopted by a consensus
    organization identified by the Secretary.
    ``(iii) Time frame. <> --
    Not later than October 1, 2012, the Secretary
    shall publish the measures selected under this
    subparagraph that will be applicable with respect
    to fiscal year 2014.
    ``(E) Public availability of data submitted.--
    <> The Secretary shall establish
    procedures for making data submitted under subparagraph
    (C) available to the public.
    Such <> procedures shall ensure that a
    hospice program has the opportunity to review the data
    that is to be made public with respect to the hospice
    program prior to such data being made
    public. <>  The Secretary shall
    report quality measures that relate to hospice care
    provided by hospice programs on the Internet website of
    the Centers for Medicare & Medicaid Services.''.

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

    Section 1866 of the Social Security Act (42 U.S.C. 1395cc) is
    amended--
    (1) in subsection (a)(1)--
    (A) in subparagraph (U), by striking ``and'' at the
    end;
    (B) in subparagraph (V), by striking the period at
    the end and inserting ``, and''; and
    (C) by adding at the end the following new
    subparagraph:
    ``(W) in the case of a hospital described in section
    1886(d)(1)(B)(v), to report quality data to the
    Secretary in accordance with subsection (k).''; and
    (2) by adding at the end the following new subsection:

    ``(k) Quality Reporting by Cancer Hospitals.--
    ``(1) In general.--For purposes of fiscal year 2014 and each
    subsequent fiscal year, a hospital described in section
    1886(d)(1)(B)(v) shall submit data to the Secretary in
    accordance with paragraph (2) with respect to such a fiscal
    year.
    ``(2) Submission of quality data.--For fiscal year 2014 and
    each subsequent fiscal year, each hospital described in such
    section shall submit to the Secretary data on quality measures
    specified under paragraph (3). Such data shall be submitted in a
    form and manner, and at a time, specified by the Secretary for
    purposes of this subparagraph.
    ``(3) Quality measures.--
    ``(A) In general.--Subject to subparagraph (B), any
    measure specified by the Secretary under this paragraph
    must have been endorsed by the entity with a contract
    under section 1890(a).
    ``(B) Exception.--In the case of a specified area or
    medical topic determined appropriate by the Secretary
    for which a feasible and practical measure has not been

    [[Page 372]]

    endorsed by the entity with a contract under section
    1890(a), the Secretary may specify a measure that is not
    so endorsed as long as due consideration is given to
    measures that have been endorsed or adopted by a
    consensus organization identified by the Secretary.
    ``(C) Time frame. <> --Not later
    than October 1, 2012, the Secretary shall publish the
    measures selected under this paragraph that will be
    applicable with respect to fiscal year 2014.
    ``(4) Public availability of data
    submitted. <> --The Secretary shall establish
    procedures for making data submitted under paragraph (4)
    available to the public. <> Such procedures shall
    ensure that a hospital described in section 1886(d)(1)(B)(v) has
    the opportunity to review the data that is to be made public
    with respect to the hospital prior to such data being made
    public. <>  The Secretary shall report
    quality measures of process, structure, outcome, patients'
    perspective on care, efficiency, and costs of care that relate
    to services furnished in such hospitals on the Internet website
    of the Centers for Medicare & Medicaid Services.''.

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

    (a) Skilled Nursing Facilities.--
    (1) In general.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall develop
    a plan to implement a value-based purchasing program for
    payments under the Medicare program under title XVIII of the
    Social Security Act for skilled nursing facilities (as defined
    in section 1819(a) of such Act (42 U.S.C. 1395i-3(a))).
    (2) Details.--In developing the plan under paragraph (1),
    the Secretary shall consider the following issues:
    (A) The ongoing development, selection, and
    modification process for measures (including under
    section 1890 of the Social Security Act (42 U.S.C.
    1395aaa) and section 1890A such Act, as added by section
    3014), to the extent feasible and practicable, of all
    dimensions of quality and efficiency in skilled nursing
    facilities.
    (i) In general.--Subject to clause (ii), any
    measure specified by the Secretary under
    subparagraph (A)(iii) must have been endorsed by
    the entity with a contract under section 1890(a).
    (ii) Exception.--In the case of a specified
    area or medical topic determined appropriate by
    the Secretary for which a feasible and practical
    measure has not been endorsed by the entity with a
    contract under section 1890(a), the Secretary may
    specify a measure that is not so endorsed as long
    as due consideration is given to measures that
    have been endorsed or adopted by a consensus
    organization identified by the Secretary.
    (B) The reporting, collection, and validation of
    quality data.
    (C) The structure of value-based payment
    adjustments, including the determination of thresholds
    or improvements in quality that would substantiate a
    payment adjustment,

    [[Page 373]]

    the size of such payments, and the sources of funding
    for the value-based bonus payments.
    (D) Methods for the public disclosure of information
    on the performance of skilled nursing facilities.
    (E) Any other issues determined appropriate by the
    Secretary.
    (3) Consultation.--In developing the plan under paragraph
    (1), the Secretary shall--
    (A) consult with relevant affected parties; and
    (B) consider experience with such demonstrations
    that the Secretary determines are relevant to the value-
    based purchasing program described in paragraph (1).
    (4) Report to congress.--Not later than October 1, 2011, the
    Secretary shall submit to Congress a report containing the plan
    developed under paragraph (1).

    (b) Home Health Agencies.--
    (1) In general.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall develop
    a plan to implement a value-based purchasing program for
    payments under the Medicare program under title XVIII of the
    Social Security Act for home health agencies (as defined in
    section 1861(o) of such Act (42 U.S.C. 1395x(o))).
    (2) Details.--In developing the plan under paragraph (1),
    the Secretary shall consider the following issues:
    (A) The ongoing development, selection, and
    modification process for measures (including under
    section 1890 of the Social Security Act (42 U.S.C.
    1395aaa) and section 1890A such Act, as added by section
    3014), to the extent feasible and practicable, of all
    dimensions of quality and efficiency in home health
    agencies.
    (B) The reporting, collection, and validation of
    quality data.
    (C) The structure of value-based payment
    adjustments, including the determination of thresholds
    or improvements in quality that would substantiate a
    payment adjustment, the size of such payments, and the
    sources of funding for the value-based bonus payments.
    (D) Methods for the public disclosure of information
    on the performance of home health agencies.
    (E) Any other issues determined appropriate by the
    Secretary.
    (3) Consultation.--In developing the plan under paragraph
    (1), the Secretary shall--
    (A) consult with relevant affected parties; and
    (B) consider experience with such demonstrations
    that the Secretary determines are relevant to the value-
    based purchasing program described in paragraph (1).
    (4) Report to congress.--Not later than October 1, 2011, the
    Secretary shall submit to Congress a report containing the plan
    developed under paragraph (1).

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

    Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is
    amended--
    (1) in subsection (b)(1), by inserting ``subject to
    subsection (p),'' after ``1998,''; and

    [[Page 374]]

    (2) by adding at the end the following new subsection:

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

    [[Page 375]]

    the payment modifier established under
    this subsection with respect to 2015.
    ``(II) Provision of information
    during initial performance period.--
    During the initial performance period,
    the Secretary shall, to the extent
    practicable, provide information to
    physicians and groups of physicians
    about the quality of care furnished by
    the physician or group of physicians to
    individuals enrolled under this part
    compared to cost (as determined under
    paragraphs (2) and (3), respectively)
    with respect to the performance period.
    ``(iii) Application.--The Secretary shall
    apply the payment modifier established under this
    subsection for items and services furnished--
    ``(I) <>
    beginning on January 1, 2015, with
    respect to specific physicians and
    groups of physicians the Secretary
    determines appropriate; and
    ``(II) <>
    beginning not later than January 1,
    2017, with respect to all physicians and
    groups of physicians.
    ``(C) Budget neutrality.--The payment modifier
    established under this subsection shall be implemented
    in a budget neutral manner.
    ``(5) Systems-based care.-- <> The
    Secretary shall, as appropriate, apply the payment modifier
    established under this subsection in a manner that promotes
    systems-based care.
    ``(6) Consideration of special circumstances of certain
    providers.--In applying the payment modifier under this
    subsection, the Secretary shall, as appropriate, take into
    account the special circumstances of physicians or groups of
    physicians in rural areas and other underserved communities.
    ``(7) Application.-- <> For purposes of
    the initial application of the payment modifier established
    under this subsection during the period beginning on January 1,
    2015, and ending on December 31, 2016, the term `physician' has
    the meaning given such term in section
    1861(r). <> On or after
    January 1, 2017, the Secretary may apply this subsection to
    eligible professionals (as defined in subsection (k)(3)(B)) as
    the Secretary determines appropriate.
    ``(8) Definitions.--For purposes of this subsection:
    ``(A) Costs.--The term `costs' means expenditures
    per individual as determined appropriate by the
    Secretary. In making the determination under the
    preceding sentence, the Secretary may take into account
    the amount of growth in expenditures per individual for
    a physician compared to the amount of such growth for
    other physicians.
    ``(B) Performance period.--The term `performance
    period' means a period specified by the Secretary.
    ``(9) Coordination with other value-based purchasing
    reforms.-- <> The Secretary shall
    coordinate the value-based payment modifier established under
    this subsection with the Physician Feedback Program under
    subsection (n) and, as the Secretary determines appropriate,
    other similar provisions of this title.

    [[Page 376]]

    ``(10) Limitations on review.--There shall be no
    administrative or judicial review under section 1869, section
    1878, or otherwise of--
    ``(A) the establishment of the value-based payment
    modifier under this subsection;
    ``(B) the evaluation of quality of care under
    paragraph (2), including the establishment of
    appropriate measures of the quality of care under
    paragraph (2)(B);
    ``(C) the evaluation of costs under paragraph (3),
    including the establishment of appropriate measures of
    costs under such paragraph;
    ``(D) the dates for implementation of the value-
    based payment modifier;
    ``(E) the specification of the initial performance
    period and any other performance period under paragraphs
    (4)(B)(ii) and (8)(B), respectively;
    ``(F) the application of the value-based payment
    modifier under paragraph (7); and
    ``(G) the determination of costs under paragraph
    (8)(A).''.

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

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C.
    1395ww), as amended by section 3001, is amended by adding at the end the
    following new subsection:
    ``(p) Adjustment to Hospital Payments for Hospital Acquired
    Conditions.--
    ``(1) In general.--In order to provide an incentive for
    applicable hospitals to reduce hospital acquired conditions
    under this title, with respect to discharges from an applicable
    hospital occurring during fiscal year 2015 or a subsequent
    fiscal year, the amount of payment under this section or section
    1814(b)(3), as applicable, for such discharges during the fiscal
    year shall be equal to 99 percent of the amount of payment that
    would otherwise apply to such discharges under this section or
    section 1814(b)(3) (determined after the application of
    subsections (o) and (q) and section 1814(l)(4) but without
    regard to this subsection).
    ``(2) Applicable hospitals.--
    ``(A) <> In general.--For
    purposes of this subsection, the term `applicable
    hospital' means a subsection (d) hospital that meets the
    criteria described in subparagraph (B).
    ``(B) Criteria described.--
    ``(i) <> In general.--
    The criteria described in this subparagraph, with
    respect to a subsection (d) hospital, is that the
    subsection (d) hospital is in the top quartile of
    all subsection (d) hospitals, relative to the
    national average, of hospital acquired conditions
    during the applicable period, as determined by the
    Secretary.
    ``(ii) Risk adjustment.--In carrying out
    clause (i), the Secretary shall establish and
    apply an appropriate risk adjustment methodology.
    ``(C) Exemption. <> --In
    the case of a hospital that is paid under section
    1814(b)(3), the Secretary may exempt such hospital from
    the application of this subsection if the State which is
    paid under such section submits an

    [[Page 377]]

    annual report to the Secretary describing how a similar
    program in the State for a participating hospital or
    hospitals achieves or surpasses the measured results in
    terms of patient health outcomes and cost savings
    established under this subsection.
    ``(3) <>  Hospital acquired conditions.--
    For purposes of this subsection, the term `hospital acquired
    condition' means a condition identified for purposes of
    subsection (d)(4)(D)(iv) and any other condition determined
    appropriate by the Secretary that an individual acquires during
    a stay in an applicable hospital, as determined by the
    Secretary.
    ``(4) Applicable period.--In this subsection, the term
    `applicable period' means, with respect to a fiscal year, a
    period specified by the Secretary.
    ``(5) Reporting to hospitals.--Prior to fiscal year 2015 and
    each subsequent fiscal year, the Secretary shall provide
    confidential reports to applicable hospitals with respect to
    hospital acquired conditions of the applicable hospital during
    the applicable period.
    ``(6) Reporting hospital specific information.--
    ``(A) In general. <> --
    The Secretary shall make information available to the
    public regarding hospital acquired conditions of each
    applicable hospital.
    ``(B) Opportunity to review and submit
    corrections.--The Secretary shall ensure that an
    applicable hospital has the opportunity to review, and
    submit corrections for, the information to be made
    public with respect to the hospital under subparagraph
    (A) prior to such information being made public.
    ``(C) Website.--Such information shall be posted on
    the Hospital Compare Internet website in an easily
    understandable format.
    ``(7) Limitations on review.--There shall be no
    administrative or judicial review under section 1869, section
    1878, or otherwise of the following:
    ``(A) The criteria described in paragraph (2)(A).
    ``(B) The specification of hospital acquired
    conditions under paragraph (3).
    ``(C) The specification of the applicable period
    under paragraph (4).
    ``(D) The provision of reports to applicable
    hospitals under paragraph (5) and the information made
    available to the public under paragraph (6).''.

    (b) Study and Report on Expansion of Healthcare Acquired Conditions
    Policy to Other Providers.--
    (1) Study.--The Secretary of Health and Human Services shall
    conduct a study on expanding the healthcare acquired conditions
    policy under subsection (d)(4)(D) of section 1886 of the Social
    Security Act (42 U.S.C. 1395ww) to payments made to other
    facilities under the Medicare program under title XVIII of the
    Social Security Act, including such payments made to inpatient
    rehabilitation facilities, long-term care hospitals (as
    described in subsection(d)(1)(B)(iv) of such section), hospital
    outpatient departments, and other hospitals excluded from the
    inpatient prospective payment system under such section, skilled
    nursing facilities, ambulatory surgical centers, and health
    clinics. Such study shall include an analysis of

    [[Page 378]]

    how such policies could impact quality of patient care, patient
    safety, and spending under the Medicare program.
    (2) Report.--Not later than January 1, 2012, the Secretary
    shall submit to Congress a report containing the results of the
    study conducted under paragraph (1), together with
    recommendations for such legislation and administrative action
    as the Secretary determines appropriate.

    PART II--NATIONAL STRATEGY TO IMPROVE HEALTH CARE QUALITY

    SEC. 3011. NATIONAL STRATEGY.

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

    ``PART S--HEALTH CARE QUALITY PROGRAMS

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

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

    ``(a) Establishment of National Strategy and Priorities.--
    ``(1) National strategy.--The Secretary, through a
    transparent collaborative process, shall establish a national
    strategy to improve the delivery of health care services,
    patient health outcomes, and population health.
    ``(2) Identification of priorities.--
    ``(A) In general.--The Secretary shall identify
    national priorities for improvement in developing the
    strategy under paragraph (1).
    ``(B) Requirements.--The Secretary shall ensure that
    priorities identified under subparagraph (A) will--
    ``(i) have the greatest potential for
    improving the health outcomes, efficiency, and
    patient-centeredness of health care for all
    populations, including children and vulnerable
    populations;
    ``(ii) identify areas in the delivery of
    health care services that have the potential for
    rapid improvement in the quality and efficiency of
    patient care;
    ``(iii) address gaps in quality, efficiency,
    comparative effectiveness information, and health
    outcomes measures and data aggregation techniques;
    ``(iv) improve Federal payment policy to
    emphasize quality and efficiency;
    ``(v) enhance the use of health care data to
    improve quality, efficiency, transparency, and
    outcomes;
    ``(vi) address the health care provided to
    patients with high-cost chronic diseases;
    ``(vii) improve research and dissemination of
    strategies and best practices to improve patient
    safety and reduce medical errors, preventable
    admissions and readmissions, and health care-
    associated infections;
    ``(viii) reduce health disparities across
    health disparity populations (as defined in
    section 485E) and geographic areas; and

    [[Page 379]]

    ``(ix) address other areas as determined
    appropriate by the Secretary.
    ``(C) Considerations.--In identifying priorities
    under subparagraph (A), the Secretary shall take into
    consideration the recommendations submitted by the
    entity with a contract under section 1890(a) of the
    Social Security Act and other stakeholders.
    ``(D) Coordination with state agencies.--The
    Secretary shall collaborate, coordinate, and consult
    with State agencies responsible for administering the
    Medicaid program under title XIX of the Social Security
    Act and the Children's Health Insurance Program under
    title XXI of such Act with respect to developing and
    disseminating strategies, goals, models, and timetables
    that are consistent with the national priorities
    identified under subparagraph (A).

    ``(b) Strategic Plan.--
    ``(1) In general.--The national strategy shall include a
    comprehensive strategic plan to achieve the priorities described
    in subsection (a).
    ``(2) Requirements.--The strategic plan shall include
    provisions for addressing, at a minimum, the following:
    ``(A) Coordination among agencies within the
    Department, which shall include steps to minimize
    duplication of efforts and utilization of common quality
    measures, where available. Such common quality measures
    shall be measures identified by the Secretary under
    section 1139A or 1139B of the Social Security Act or
    endorsed under section 1890 of such Act.
    ``(B) Agency-specific strategic plans to achieve
    national priorities.
    ``(C) Establishment of annual benchmarks for each
    relevant agency to achieve national priorities.
    ``(D) A process for regular reporting by the
    agencies to the Secretary on the implementation of the
    strategic plan.
    ``(E) Strategies to align public and private payers
    with regard to quality and patient safety efforts.
    ``(F) Incorporating quality improvement and
    measurement in the strategic plan for health information
    technology required by the American Recovery and
    Reinvestment Act of 2009 (Public Law 111-5).

    ``(c) Periodic Update of National Strategy.--The Secretary shall
    update the national strategy not less than annually. Any such update
    shall include a review of short- and long-term goals.
    ``(d) Submission and Availability of National Strategy and
    Updates.--
    ``(1) Deadline for initial submission of national
    strategy.--Not later than January 1, 2011, the Secretary shall
    submit to the relevant committees of Congress the national
    strategy described in subsection (a).
    ``(2) Updates.--
    ``(A) In general.--The Secretary shall submit to the
    relevant committees of Congress an annual update to the
    strategy described in paragraph (1).
    ``(B) Information submitted.--Each update submitted
    under subparagraph (A) shall include--

    [[Page 380]]

    ``(i) a review of the short- and long-term
    goals of the national strategy and any gaps in
    such strategy;
    ``(ii) an analysis of the progress, or lack of
    progress, in meeting such goals and any barriers
    to such progress;
    ``(iii) the information reported under section
    1139A of the Social Security Act, consistent with
    the reporting requirements of such section; and
    ``(iv) in the case of an update required to be
    submitted on or after January 1, 2014, the
    information reported under section 1139B(b)(4) of
    the Social Security Act, consistent with the
    reporting requirements of such section.
    ``(C) Satisfaction of other reporting
    requirements.--Compliance with the requirements of
    clauses (iii) and (iv) of subparagraph (B) shall satisfy
    the reporting requirements under sections 1139A(a)(6)
    and 1139B(b)(4), respectively, of the Social Security
    Act.

    ``(e) Health Care Quality Internet Website.--
    <> Not later than January 1, 2011,
    the Secretary shall create an Internet website to make public
    information regarding--
    ``(1) the national priorities for health care quality
    improvement established under subsection (a)(2);
    ``(2) the agency-specific strategic plans for health care
    quality described in subsection (b)(2)(B); and
    ``(3) other information, as the Secretary determines to be
    appropriate.''.

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

    (a) <> In General.--The President
    shall convene a working group to be known as the Interagency Working
    Group on Health Care Quality (referred to in this section as the
    ``Working Group'').

    (b) Goals.--The goals of the Working Group shall be to achieve the
    following:
    (1) Collaboration, cooperation, and consultation between
    Federal departments and agencies with respect to developing and
    disseminating strategies, goals, models, and timetables that are
    consistent with the national priorities identified under section
    399HH(a)(2) of the Public Health Service Act (as added by
    section 3011).
    (2) Avoidance of inefficient duplication of quality
    improvement efforts and resources, where practicable, and a
    streamlined process for quality reporting and compliance
    requirements.
    (3) Assess alignment of quality efforts in the public sector
    with private sector initiatives.

    (c) Composition.--
    (1) In general.--The Working Group shall be composed of
    senior level representatives of--
    (A) the Department of Health and Human Services;
    (B) the Centers for Medicare & Medicaid Services;
    (C) the National Institutes of Health;
    (D) the Centers for Disease Control and Prevention;
    (E) the Food and Drug Administration;
    (F) the Health Resources and Services
    Administration;
    (G) the Agency for Healthcare Research and Quality;

    [[Page 381]]

    (H) the Office of the National Coordinator for
    Health Information Technology;
    (I) the Substance Abuse and Mental Health Services
    Administration;
    (J) the Administration for Children and Families;
    (K) the Department of Commerce;
    (L) the Office of Management and Budget;
    (M) the United States Coast Guard;
    (N) the Federal Bureau of Prisons;
    (O) the National Highway Traffic Safety
    Administration;
    (P) the Federal Trade Commission;
    (Q) the Social Security Administration;
    (R) the Department of Labor;
    (S) the United States Office of Personnel
    Management;
    (T) the Department of Defense;
    (U) the Department of Education;
    (V) the Department of Veterans Affairs;
    (W) the Veterans Health Administration; and
    (X) any other Federal agencies and departments with
    activities relating to improving health care quality and
    safety, as determined by the President.
    (2) Chair and vice-chair.--
    (A) Chair.--The Working Group shall be chaired by
    the Secretary of Health and Human Services.
    (B) Vice chair.--Members of the Working Group, other
    than the Secretary of Health and Human Services, shall
    serve as Vice Chair of the Group on a rotating basis, as
    determined by the Group.

    (d) Report to Congress.-- <> Not later than December 31, 2010, and annually thereafter,
    the Working Group shall submit to the relevant Committees of Congress,
    and make public on an Internet website, a report describing the progress
    and recommendations of the Working Group in meeting the goals described
    in subsection (b).

    SEC. 3013. QUALITY MEASURE DEVELOPMENT.

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

    ``PART D--HEALTH CARE QUALITY IMPROVEMENT

    ``Subpart I--Quality Measure Development

    ``SEC. 931. <>  QUALITY MEASURE DEVELOPMENT.

    ``(a) Quality Measure.-- <> In this subpart, the
    term `quality measure' means a standard for measuring the performance
    and improvement of population health or of health plans, providers of
    services, and other clinicians in the delivery of health care services.

    [[Page 382]]

    ``(b) Identification of Quality Measures.--
    ``(1) <> Identification.--The
    Secretary, in consultation with the Director of the Agency for
    Healthcare Research and Quality and the Administrator of the
    Centers for Medicare & Medicaid Services, shall identify, not
    less often than triennially, gaps where no quality measures
    exist and existing quality measures that need improvement,
    updating, or expansion, consistent with the national strategy
    under section 399HH, to the extent available, for use in Federal
    health programs. In identifying such gaps and existing quality
    measures that need improvement, the Secretary shall take into
    consideration--
    ``(A) the gaps identified by the entity with a
    contract under section 1890(a) of the Social Security
    Act and other stakeholders;
    ``(B) quality measures identified by the pediatric
    quality measures program under section 1139A of the
    Social Security Act; and
    ``(C) quality measures identified through the
    Medicaid Quality Measurement Program under section 1139B
    of the Social Security Act.
    ``(2) Publication.-- <> The Secretary shall make available to the
    public on an Internet website a report on any gaps identified
    under paragraph (1) and the process used to make such
    identification.

    ``(c) Grants or Contracts for Quality Measure Development.--
    ``(1) In general.--The Secretary shall award grants,
    contracts, or intergovernmental agreements to eligible entities
    for purposes of developing, improving, updating, or expanding
    quality measures identified under subsection (b).
    ``(2) Prioritization in the development of quality
    measures.--In awarding grants, contracts, or agreements under
    this subsection, the Secretary shall give priority to the
    development of quality measures that allow the assessment of--
    ``(A) health outcomes and functional status of
    patients;
    ``(B) the management and coordination of health care
    across episodes of care and care transitions for
    patients across the continuum of providers, health care
    settings, and health plans;
    ``(C) the experience, quality, and use of
    information provided to and used by patients,
    caregivers, and authorized representatives to inform
    decisionmaking about treatment options, including the
    use of shared decisionmaking tools and preference
    sensitive care (as defined in section 936);
    ``(D) the meaningful use of health information
    technology;
    ``(E) the safety, effectiveness, patient-
    centeredness, appropriateness, and timeliness of care;
    ``(F) the efficiency of care;
    ``(G) the equity of health services and health
    disparities across health disparity populations (as
    defined in section 485E) and geographic areas;
    ``(H) patient experience and satisfaction;
    ``(I) the use of innovative strategies and
    methodologies identified under section 933; and

    [[Page 383]]

    ``(J) other areas determined appropriate by the
    Secretary.
    ``(3) Eligible entities.--To be eligible for a grant or
    contract under this subsection, an entity shall--
    ``(A) have demonstrated expertise and capacity in
    the development and evaluation of quality measures;
    ``(B) have adopted procedures to include in the
    quality measure development process--
    ``(i) the views of those providers or payers
    whose performance will be assessed by the measure;
    and
    ``(ii) the views of other parties who also
    will use the quality measures (such as patients,
    consumers, and health care purchasers);
    ``(C) collaborate with the entity with a contract
    under section 1890(a) of the Social Security Act and
    other stakeholders, as practicable, and the Secretary so
    that quality measures developed by the eligible entity
    will meet the requirements to be considered for
    endorsement by the entity with a contract under such
    section 1890(a);
    ``(D) have transparent policies regarding governance
    and conflicts of interest; and
    ``(E) submit an application to the Secretary at such
    time and in such manner, as the Secretary may require.
    ``(4) <> Use of funds.--An entity that
    receives a grant, contract, or agreement under this subsection
    shall use such award to develop quality measures that meet the
    following requirements:
    ``(A) Such measures support measures required to be
    reported under the Social Security Act, where
    applicable, and in support of gaps and existing quality
    measures that need improvement, as described in
    subsection (b)(1)(A).
    ``(B) Such measures support measures developed under
    section 1139A of the Social Security Act and the
    Medicaid Quality Measurement Program under section 1139B
    of such Act, where applicable.
    ``(C) To the extent practicable, data on such
    quality measures is able to be collected using health
    information technologies.
    ``(D) Each quality measure is free of charge to
    users of such measure.
    ``(E) Each quality measure is publicly available on
    an Internet website.

    ``(d) Other Activities by the Secretary.--The Secretary may use
    amounts available under this section to update and test, where
    applicable, quality measures endorsed by the entity with a contract
    under section 1890(a) of the Social Security Act or adopted by the
    Secretary.
    ``(e) Coordination of Grants.--The Secretary shall ensure that
    grants or contracts awarded under this section are coordinated with
    grants and contracts awarded under sections 1139A(5) and 1139B(4)(A) of
    the Social Security Act.''.
    (b) Social Security Act.--Section 1890A of the Social Security Act,
    as added by section 3014(b), is amended by adding at the end the
    following new subsection:
    ``(e) Development of Quality Measures.--The Administrator of the
    Center for Medicare & Medicaid Services shall through contracts develop
    quality measures (as determined appropriate by

    [[Page 384]]

    the Administrator) for use under this Act. In developing such measures,
    the Administrator shall consult with the Director of the Agency for
    Healthcare Research and Quality.''.
    (c) Funding.--There are authorized to be appropriated to the
    Secretary of Health and Human Services to carry out this section,
    $75,000,000 for each of fiscal years 2010 through 2014. Of the amounts
    appropriated under the preceding sentence in a fiscal year, not less
    than 50 percent of such amounts shall be used pursuant to subsection (e)
    of section 1890A of the Social Security Act, as added by subsection (b),
    with respect to programs under such Act. Amounts appropriated under this
    subsection for a fiscal year shall remain available until expended.

    SEC. 3014. QUALITY MEASUREMENT.

    (a) New Duties for Consensus-based Entity.--
    (1) Multi-stakeholder group input.--Section 1890(b) of the
    Social Security Act (42 U.S.C. 1395aaa(b)), as amended by
    section 3003, is amended by adding at the end the following new
    paragraphs:
    ``(7) Convening multi-stakeholder groups.--
    ``(A) In general.--The entity shall convene multi-
    stakeholder groups to provide input on--
    ``(i) the selection of quality measures
    described in subparagraph (B), from among--
    ``(I) such measures that have been
    endorsed by the entity; and
    ``(II) such measures that have not
    been considered for endorsement by such
    entity but are used or proposed to be
    used by the Secretary for the collection
    or reporting of quality measures; and
    ``(ii) national priorities (as identified
    under section 399HH of the Public Health Service
    Act) for improvement in population health and in
    the delivery of health care services for
    consideration under the national strategy
    established under section 399HH of the Public
    Health Service Act.
    ``(B) Quality measures.--
    ``(i) In general.--Subject to clause (ii), the
    quality measures described in this subparagraph
    are quality measures--
    ``(I) for use pursuant to sections
    1814(i)(5)(D), 1833(i)(7), 1833(t)(17),
    1848(k)(2)(C), 1866(k)(3),
    1881(h)(2)(A)(iii), 1886(b)(3)(B)(viii),
    1886(j)(7)(D), 1886(m)(5)(D),
    1886(o)(2), and 1895(b)(3)(B)(v);
    ``(II) for use in reporting
    performance information to the public;
    and
    ``(III) for use in health care
    programs other than for use under this
    Act.
    ``(ii) Exclusion.--Data sets (such as the
    outcome and assessment information set for home
    health services and the minimum data set for
    skilled nursing facility services) that are used
    for purposes of classification systems used in
    establishing payment rates under this title shall
    not be quality measures described in this
    subparagraph.
    ``(C) Requirement for transparency in process.--

    [[Page 385]]

    ``(i) In general.--In convening multi-
    stakeholder groups under subparagraph (A) with
    respect to the selection of quality measures, the
    entity shall provide for an open and transparent
    process for the activities conducted pursuant to
    such convening.
    ``(ii) Selection of organizations
    participating in multi-stakeholder groups.--The
    process described in clause (i) shall ensure that
    the selection of representatives comprising such
    groups provides for public nominations for, and
    the opportunity for public comment on, such
    selection.
    ``(D) Multi-stakeholder group defined.--In this
    paragraph, the term `multi-stakeholder group' means,
    with respect to a quality measure, a voluntary
    collaborative of organizations representing a broad
    group of stakeholders interested in or affected by the
    use of such quality measure.
    ``(8) Transmission of multi-stakeholder input.--
    <> Not later than February 1 of each year
    (beginning with 2012), the entity shall transmit to the
    Secretary the input of multi-stakeholder groups provided under
    paragraph (7).''.
    (2) Annual report.--Section 1890(b)(5)(A) of the Social
    Security Act (42 U.S.C. 1395aaa(b)(5)(A)) is amended--
    (A) in clause (ii), by striking ``and'' at the end;
    (B) in clause (iii), by striking the period at the
    end and inserting a semicolon; and
    (C) by adding at the end the following new clauses:
    ``(iv) gaps in endorsed quality measures,
    which shall include measures that are within
    priority areas identified by the Secretary under
    the national strategy established under section
    399HH of the Public Health Service Act, and where
    quality measures are unavailable or inadequate to
    identify or address such gaps;
    ``(v) areas in which evidence is insufficient
    to support endorsement of quality measures in
    priority areas identified by the Secretary under
    the national strategy established under section
    399HH of the Public Health Service Act and where
    targeted research may address such gaps; and
    ``(vi) the matters described in clauses (i)
    and (ii) of paragraph (7)(A).''.

    (b) Multi-stakeholder Group Input Into Selection of Quality
    Measures.--Title XVIII of the Social Security Act (42 U.S.C. 1395 et
    seq.) is amended by inserting after section 1890 the following:

    ``quality measurement

    ``Sec. 1890A.  <> (a) Multi-
    stakeholder Group Input Into Selection of Quality Measures.--
    <> The Secretary shall establish a pre-rulemaking
    process under which the following steps occur with respect to the
    selection of quality measures described in section 1890(b)(7)(B):
    ``(1) Input.--Pursuant to section 1890(b)(7), the entity
    with a contract under section 1890 shall convene multi-
    stakeholder groups to provide input to the Secretary on the
    selection of quality measures described in subparagraph (B) of
    such paragraph.

    [[Page 386]]

    ``(2) Public availability of measures considered for
    selection.--Not later than December 1 of each year (beginning
    with 2011), the Secretary shall make available to the public a
    list of quality measures described in section 1890(b)(7)(B) that
    the Secretary is considering under this title.
    ``(3) Transmission of multi-stakeholder input.--Pursuant to
    section 1890(b)(8), not later than February 1 of each year
    (beginning with 2012), the entity shall transmit to the
    Secretary the input of multi-stakeholder groups described in
    paragraph (1).
    ``(4) Consideration of multi-stakeholder input.--The
    Secretary shall take into consideration the input from multi-
    stakeholder groups described in paragraph (1) in selecting
    quality measures described in section 1890(b)(7)(B) that have
    been endorsed by the entity with a contract under section 1890
    and measures that have not been endorsed by such entity.
    ``(5) Rationale for use of quality measures.--
    <> The Secretary shall
    publish in the Federal Register the rationale for the use of any
    quality measure described in section 1890(b)(7)(B) that has not
    been endorsed by the entity with a contract under section 1890.
    ``(6) Assessment of impact.--Not later than March 1, 2012,
    and at least once every three years thereafter, the Secretary
    shall--
    ``(A) conduct an assessment of the quality impact of
    the use of endorsed measures described in section
    1890(b)(7)(B); and
    ``(B) <> make such
    assessment available to the public.

    ``(b) Process for Dissemination of Measures Used by the Secretary.--
    ``(1) In general.--The Secretary shall establish a process
    for disseminating quality measures used by the Secretary. Such
    process shall include the following:
    ``(A) The incorporation of such measures, where
    applicable, in workforce programs, training curricula,
    and any other means of dissemination determined
    appropriate by the Secretary.
    ``(B) The dissemination of such quality measures
    through the national strategy developed under section
    399HH of the Public Health Service Act.
    ``(2) Existing methods.--To the extent practicable, the
    Secretary shall utilize and expand existing dissemination
    methods in disseminating quality measures under the process
    established under paragraph (1).

    ``(c) Review of Quality Measures Used by the Secretary.--
    ``(1) In general.--The Secretary shall--
    ``(A) periodically (but in no case less often than
    once every 3 years) review quality measures described in
    section 1890(b)(7)(B); and
    ``(B) with respect to each such measure, determine
    whether to--
    ``(i) maintain the use of such measure; or
    ``(ii) phase out such measure.
    ``(2) Considerations.--In conducting the review under
    paragraph (1), the Secretary shall take steps to--
    ``(A) seek to avoid duplication of measures used;
    and

    [[Page 387]]

    ``(B) take into consideration current innovative
    methodologies and strategies for quality improvement
    practices in the delivery of health care services that
    represent best practices for such quality improvement
    and measures endorsed by the entity with a contract
    under section 1890 since the previous review by the
    Secretary.

    ``(d) Rule of Construction.--Nothing in this section shall preclude
    a State from using the quality measures identified under sections 1139A
    and 1139B.''.
    (c) Funding.--For purposes of carrying out the amendments made by
    this section, the Secretary shall provide for the transfer, from the
    Federal Hospital Insurance Trust Fund under section 1817 of the Social
    Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical
    Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t),
    in such proportion as the Secretary determines appropriate, of
    $20,000,000, to the Centers for Medicare & Medicaid Services Program
    Management Account for each of fiscal years 2010 through 2014. Amounts
    transferred under the preceding sentence shall remain available until
    expended.

    SEC. 3015. DATA COLLECTION; PUBLIC REPORTING.

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

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

    ``(a) In General.--The Secretary shall collect and aggregate
    consistent data on quality and resource use measures from information
    systems used to support health care delivery to implement the public
    reporting of performance information, as described in section 399JJ, and
    may award grants or contracts for this purpose. The Secretary shall
    ensure that such collection, aggregation, and analysis systems span an
    increasingly broad range of patient populations, providers, and
    geographic areas over time.
    ``(b) Grants or Contracts for Data Collection.--
    ``(1) In general.--The Secretary may award grants or
    contracts to eligible entities to support new, or improve
    existing, efforts to collect and aggregate quality and resource
    use measures described under subsection (c).
    ``(2) Eligible entities.--To be eligible for a grant or
    contract under this subsection, an entity shall--
    ``(A) be--
    ``(i) a multi-stakeholder entity that
    coordinates the development of methods and
    implementation plans for the consistent reporting
    of summary quality and cost information;
    ``(ii) an entity capable of submitting such
    summary data for a particular population and
    providers, such as a disease registry, regional
    collaboration, health plan collaboration, or other
    population-wide source; or
    ``(iii) a Federal Indian Health Service
    program or a health program operated by an Indian
    tribe (as defined in section 4 of the Indian
    Health Care Improvement Act);
    ``(B) promote the use of the systems that provide
    data to improve and coordinate patient care;

    [[Page 388]]

    ``(C) support the provision of timely, consistent
    quality and resource use information to health care
    providers, and other groups and organizations as
    appropriate, with an opportunity for providers to
    correct inaccurate measures; and
    ``(D) agree to report, as determined by the
    Secretary, measures on quality and resource use to the
    public in accordance with the public reporting process
    established under section 399JJ.

    ``(c) Consistent Data Aggregation.-- <> The
    Secretary may award grants or contracts under this section only to
    entities that enable summary data that can be integrated and compared
    across multiple sources. The Secretary shall provide standards for the
    protection of the security and privacy of patient data.

    ``(d) Matching Funds.--The Secretary may not award a grant or
    contract under this section to an entity unless the entity agrees that
    it will make available (directly or through contributions from other
    public or private entities) non-Federal contributions toward the
    activities to be carried out under the grant or contract in an amount
    equal to $1 for each $5 of Federal funds provided under the grant or
    contract. Such non-Federal matching funds may be provided directly or
    through donations from public or private entities and may be in cash or
    in-kind, fairly evaluated, including plant, equipment, or services.
    ``(e) Authorization of Appropriations.--To carry out this section,
    there are authorized to be appropriated such sums as may be necessary
    for fiscal years 2010 through 2014.

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

    ``(a) Development of Performance Websites.-- <> The Secretary shall make available to the public, through
    standardized Internet websites, performance information summarizing data
    on quality measures. Such information shall be tailored to respond to
    the differing needs of hospitals and other institutional health care
    providers, physicians and other clinicians, patients, consumers,
    researchers, policymakers, States, and other stakeholders, as the
    Secretary may specify.

    ``(b) Information on Conditions.--The performance information made
    publicly available on an Internet website, as described in subsection
    (a), shall include information regarding clinical conditions to the
    extent such information is available, and the information shall, where
    appropriate, be provider-specific and sufficiently disaggregated and
    specific to meet the needs of patients with different clinical
    conditions.
    ``(c) Consultation.--
    ``(1) In general.--In carrying out this section, the
    Secretary shall consult with the entity with a contract under
    section 1890(a) of the Social Security Act, and other entities,
    as appropriate, to determine the type of information that is
    useful to stakeholders and the format that best facilitates use
    of the reports and of performance reporting Internet websites.
    ``(2) Consultation with stakeholders.--The entity with a
    contract under section 1890(a) of the Social Security Act shall
    convene multi-stakeholder groups, as described in such section,
    to review the design and format of each Internet website made
    available under subsection (a) and shall transmit

    [[Page 389]]

    to the Secretary the views of such multi-stakeholder groups with
    respect to each such design and format.

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

    PART III--ENCOURAGING DEVELOPMENT OF NEW PATIENT CARE MODELS

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

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

    ``center for medicare and medicaid innovation

    ``Sec. 1115A.  <> (a) Center for Medicare and
    Medicaid Innovation Established.--
    ``(1) In general.--There is created within the Centers for
    Medicare & Medicaid Services a Center for Medicare and Medicaid
    Innovation (in this section referred to as the `CMI') to carry
    out the duties described in this section. The purpose of the CMI
    is to test innovative payment and service delivery models to
    reduce program expenditures under the applicable titles while
    preserving or enhancing the quality of care furnished to
    individuals under such titles. In selecting such models, the
    Secretary shall give preference to models that also improve the
    coordination, quality, and efficiency of health care services
    furnished to applicable individuals defined in paragraph (4)(A).
    ``(2) Deadline.--The Secretary shall ensure that the CMI is
    carrying out the duties described in this section by not later
    than January 1, 2011.
    ``(3) Consultation.--In carrying out the duties under this
    section, the CMI shall consult representatives of relevant
    Federal agencies, and clinical and analytical experts with
    expertise in medicine and health care management. The CMI shall
    use open door forums or other mechanisms to seek input from
    interested parties.
    ``(4) Definitions.--In this section:
    ``(A) Applicable individual.--The term `applicable
    individual' means--
    ``(i) an individual who is entitled to, or
    enrolled for, benefits under part A of title XVIII
    or enrolled for benefits under part B of such
    title;
    ``(ii) an individual who is eligible for
    medical assistance under title XIX, under a State
    plan or waiver; or
    ``(iii) an individual who meets the criteria
    of both clauses (i) and (ii).
    ``(B) Applicable title.--The term `applicable title'
    means title XVIII, title XIX, or both.

    [[Page 390]]

    ``(b) Testing of Models (Phase I).--
    ``(1) In general.--The CMI shall test payment and service
    delivery models in accordance with selection criteria under
    paragraph (2) to determine the effect of applying such models
    under the applicable title (as defined in subsection (a)(4)(B))
    on program expenditures under such titles and the quality of
    care received by individuals receiving benefits under such
    title.
    ``(2) Selection of models to be tested.--
    ``(A) <> In general.--The
    Secretary shall select models to be tested from models
    where the Secretary determines that there is evidence
    that the model addresses a defined population for which
    there are deficits in care leading to poor clinical
    outcomes or potentially avoidable expenditures. The
    models selected under the preceding sentence may include
    the models described in subparagraph (B).
    ``(B) Opportunities.--The models described in this
    subparagraph are the following models:
    ``(i) Promoting broad payment and practice
    reform in primary care, including patient-centered
    medical home models for high-need applicable
    individuals, medical homes that address women's
    unique health care needs, and models that
    transition primary care practices away from fee-
    for-service based reimbursement and toward
    comprehensive payment or salary-based payment.
    ``(ii) Contracting directly with groups of
    providers of services and suppliers to promote
    innovative care delivery models, such as through
    risk-based comprehensive payment or salary-based
    payment.
    ``(iii) Utilizing geriatric assessments and
    comprehensive care plans to coordinate the care
    (including through interdisciplinary teams) of
    applicable individuals with multiple chronic
    conditions and at least one of the following:
    ``(I) An inability to perform 2 or
    more activities of daily living.
    ``(II) Cognitive impairment,
    including dementia.
    ``(iv) Promote care coordination between
    providers of services and suppliers that
    transition health care providers away from fee-
    for-service based reimbursement and toward salary-
    based payment.
    ``(v) Supporting care coordination for
    chronically-ill applicable individuals at high
    risk of hospitalization through a health
    information technology-enabled provider network
    that includes care coordinators, a chronic disease
    registry, and home tele-health technology.
    ``(vi) Varying payment to physicians who order
    advanced diagnostic imaging services (as defined
    in section 1834(e)(1)(B)) according to the
    physician's adherence to appropriateness criteria
    for the ordering of such services, as determined
    in consultation with physician specialty groups
    and other relevant stakeholders.

    [[Page 391]]

    ``(vii) Utilizing medication therapy
    management services, such as those described in
    section 935 of the Public Health Service Act.
    ``(viii) Establishing community-based health
    teams to support small-practice medical homes by
    assisting the primary care practitioner in chronic
    care management, including patient self-
    management, activities.
    ``(ix) Assisting applicable individuals in
    making informed health care choices by paying
    providers of services and suppliers for using
    patient decision-support tools, including tools
    that meet the standards developed and identified
    under section 936(c)(2)(A) of the Public Health
    Service Act, that improve applicable individual
    and caregiver understanding of medical treatment
    options.
    ``(x) Allowing States to test and evaluate
    fully integrating care for dual eligible
    individuals in the State, including the management
    and oversight of all funds under the applicable
    titles with respect to such individuals.
    ``(xi) Allowing States to test and evaluate
    systems of all-payer payment reform for the
    medical care of residents of the State, including
    dual eligible individuals.
    ``(xii) Aligning nationally recognized,
    evidence-based guidelines of cancer care with
    payment incentives under title XVIII in the areas
    of treatment planning and follow-up care planning
    for applicable individuals described in clause (i)
    or (iii) of subsection (a)(4)(A) with cancer,
    including the identification of gaps in applicable
    quality measures.
    ``(xiii) Improving post-acute care through
    continuing care hospitals that offer inpatient
    rehabilitation, long-term care hospitals, and home
    health or skilled nursing care during an inpatient
    stay and the 30 days immediately following
    discharge.
    ``(xiv) Funding home health providers who
    offer chronic care management services to
    applicable individuals in cooperation with
    interdisciplinary teams.
    ``(xv) Promoting improved quality and reduced
    cost by developing a collaborative of high-
    quality, low-cost health care institutions that is
    responsible for--
    ``(I) developing, documenting, and
    disseminating best practices and proven
    care methods;
    ``(II) implementing such best
    practices and proven care methods within
    such institutions to demonstrate further
    improvements in quality and efficiency;
    and
    ``(III) providing assistance to
    other health care institutions on how
    best to employ such best practices and
    proven care methods to improve health
    care quality and lower costs.
    ``(xvi) Facilitate inpatient care, including
    intensive care, of hospitalized applicable
    individuals at their local hospital through the
    use of electronic monitoring by specialists,
    including intensivists and critical care
    specialists, based at integrated health systems.

    [[Page 392]]

    ``(xvii) Promoting greater efficiencies and
    timely access to outpatient services (such as
    outpatient physical therapy services) through
    models that do not require a physician or other
    health professional to refer the service or be
    involved in establishing the plan of care for the
    service, when such service is furnished by a
    health professional who has the authority to
    furnish the service under existing State law.
    ``(xviii) Establishing comprehensive payments
    to Healthcare Innovation Zones, consisting of
    groups of providers that include a teaching
    hospital, physicians, and other clinical entities,
    that, through their structure, operations, and
    joint-activity deliver a full spectrum of
    integrated and comprehensive health care services
    to applicable individuals while also incorporating
    innovative methods for the clinical training of
    future health care professionals.
    ``(C) Additional factors for consideration.--In
    selecting models for testing under subparagraph (A), the
    CMI may consider the following additional factors:
    ``(i) Whether the model includes a regular
    process for monitoring and updating patient care
    plans in a manner that is consistent with the
    needs and preferences of applicable individuals.
    ``(ii) Whether the model places the applicable
    individual, including family members and other
    informal caregivers of the applicable individual,
    at the center of the care team of the applicable
    individual.
    ``(iii) Whether the model provides for in-
    person contact with applicable individuals.
    ``(iv) Whether the model utilizes technology,
    such as electronic health records and patient-
    based remote monitoring systems, to coordinate
    care over time and across settings.
    ``(v) Whether the model provides for the
    maintenance of a close relationship between care
    coordinators, primary care practitioners,
    specialist physicians, community-based
    organizations, and other providers of services and
    suppliers.
    ``(vi) Whether the model relies on a team-
    based approach to interventions, such as
    comprehensive care assessments, care planning, and
    self-management coaching.
    ``(vii) Whether, under the model, providers of
    services and suppliers are able to share
    information with patients, caregivers, and other
    providers of services and suppliers on a real time
    basis.
    ``(3) Budget neutrality.--
    ``(A) Initial period.--The Secretary shall not
    require, as a condition for testing a model under
    paragraph (1), that the design of such model ensure that
    such model is budget neutral initially with respect to
    expenditures under the applicable title.
    ``(B) <> Termination or
    modification.--The Secretary shall terminate or modify
    the design and implementation of a model unless the
    Secretary determines (and the Chief Actuary of the
    Centers for Medicare & Medicaid Services,

    [[Page 393]]

    with respect to program spending under the applicable
    title, certifies), after testing has begun, that the
    model is expected to--
    ``(i) improve the quality of care (as
    determined by the Administrator of the Centers for
    Medicare & Medicaid Services) without increasing
    spending under the applicable title;
    ``(ii) reduce spending under the applicable
    title without reducing the quality of care; or
    ``(iii) improve the quality of care and reduce
    spending.
    Such termination may occur at any time after such
    testing has begun and before completion of the testing.
    ``(4) Evaluation.--
    ``(A) In general.--The Secretary shall conduct an
    evaluation of each model tested under this subsection.
    Such evaluation shall include an analysis of--
    ``(i) the quality of care furnished under the
    model, including the measurement of patient-level
    outcomes and patient-centeredness criteria
    determined appropriate by the Secretary; and
    ``(ii) the changes in spending under the
    applicable titles by reason of the model.
    ``(B) Information.-- <> The Secretary shall make
    the results of each evaluation under this paragraph
    available to the public in a timely fashion and may
    establish requirements for States and other entities
    participating in the testing of models under this
    section to collect and report information that the
    Secretary determines is necessary to monitor and
    evaluate such models.

    ``(c) <> Expansion of Models (Phase II).--
    Taking into account the evaluation under subsection (b)(4), the
    Secretary may, through rulemaking, expand (including implementation on a
    nationwide basis) the duration and the scope of a model that is being
    tested under subsection (b) or a demonstration project under section
    1866C, to the extent determined appropriate by the Secretary, if--
    ``(1) the Secretary determines that such expansion is
    expected to--
    ``(A) reduce spending under applicable title without
    reducing the quality of care; or
    ``(B) improve the quality of care and reduce
    spending; and
    ``(2) <> the Chief Actuary of the
    Centers for Medicare & Medicaid Services certifies that such
    expansion would reduce program spending under applicable titles.

    ``(d) Implementation.--
    ``(1) Waiver authority.--The Secretary may waive such
    requirements of titles XI and XVIII and of sections 1902(a)(1),
    1902(a)(13), and 1903(m)(2)(A)(iii) as may be necessary solely
    for purposes of carrying out this section with respect to
    testing models described in subsection (b).
    ``(2) Limitations on review.--There shall be no
    administrative or judicial review under section 1869, section
    1878, or otherwise of--
    ``(A) the selection of models for testing or
    expansion under this section;

    [[Page 394]]

    ``(B) the selection of organizations, sites, or
    participants to test those models selected;
    ``(C) the elements, parameters, scope, and duration
    of such models for testing or dissemination;
    ``(D) determinations regarding budget neutrality
    under subsection (b)(3);
    ``(E) the termination or modification of the design
    and implementation of a model under subsection
    (b)(3)(B); and
    ``(F) determinations about expansion of the duration
    and scope of a model under subsection (c), including the
    determination that a model is not expected to meet
    criteria described in paragraph (1) or (2) of such
    subsection.
    ``(3) Administration.--Chapter 35 of title 44, United States
    Code, shall not apply to the testing and evaluation of models or
    expansion of such models under this section.

    ``(e) Application to CHIP.--The Center may carry out activities
    under this section with respect to title XXI in the same manner as
    provided under this section with respect to the program under the
    applicable titles.
    ``(f) Funding.--
    ``(1) In general.--There are appropriated, from amounts in
    the Treasury not otherwise appropriated--
    ``(A) $5,000,000 for the design, implementation, and
    evaluation of models under subsection (b) for fiscal
    year 2010;
    ``(B) $10,000,000,000 for the activities initiated
    under this section for the period of fiscal years 2011
    through 2019; and
    ``(C) the amount described in subparagraph (B) for
    the activities initiated under this section for each
    subsequent 10-year fiscal period (beginning with the 10-
    year fiscal period beginning with fiscal year 2020).
    Amounts appropriated under the preceding sentence shall remain
    available until expended.
    ``(2) Use of certain funds.--Out of amounts appropriated
    under subparagraphs (B) and (C) of paragraph (1), not less than
    $25,000,000 shall be made available each such fiscal year to
    design, implement, and evaluate models under subsection (b).

    ``(g) Report to Congress.--Beginning in 2012, and not less than once
    every other year thereafter, the Secretary shall submit to Congress a
    report on activities under this section. Each such report shall describe
    the models tested under subsection (b), including the number of
    individuals described in subsection (a)(4)(A)(i) and of individuals
    described in subsection (a)(4)(A)(ii) participating in such models and
    payments made under applicable titles for services on behalf of such
    individuals, any models chosen for expansion under subsection (c), and
    the results from evaluations under subsection
    (b)(4). <> In addition, each such report shall
    provide such recommendations as the Secretary determines are appropriate
    for legislative action to facilitate the development and expansion of
    successful payment models.''.

    (b) Medicaid Conforming Amendment.--Section 1902(a) of the Social
    Security Act (42 U.S.C. 1396a(a)), as amended by section 8002(b), is
    amended--
    (1) in paragraph (81), by striking ``and'' at the end;

    [[Page 395]]

    (2) in paragraph (82), by striking the period at the end and
    inserting ``; and''; and
    (3) by inserting after paragraph (82) the following new
    paragraph:
    ``(83) provide for implementation of the payment models
    specified by the Secretary under section 1115A(c) for
    implementation on a nationwide basis unless the State
    demonstrates to the satisfaction of the Secretary that
    implementation would not be administratively feasible or
    appropriate to the health care delivery system of the State.''.

    (c) Revisions to Health Care Quality Demonstration Program.--
    Subsections (b) and (f) of section 1866C of the Social Security Act (42
    U.S.C. 1395cc-3) are amended by striking ``5-year'' each place it
    appears.

    SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM.

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

    ``shared savings program

    ``Sec. 1899.  <> (a) Establishment.--
    ``(1) In general.-- <> Not later than
    January 1, 2012, the Secretary shall establish a shared savings
    program (in this section referred to as the `program') that
    promotes accountability for a patient population and coordinates
    items and services under parts A and B, and encourages
    investment in infrastructure and redesigned care processes for
    high quality and efficient service delivery. Under such
    program--
    ``(A) groups of providers of services and suppliers
    meeting criteria specified by the Secretary may work
    together to manage and coordinate care for Medicare fee-
    for-service beneficiaries through an accountable care
    organization (referred to in this section as an `ACO');
    and
    ``(B) ACOs that meet quality performance standards
    established by the Secretary are eligible to receive
    payments for shared savings under subsection (d)(2).

    ``(b) Eligible ACOs.--
    ``(1) In general.--Subject to the succeeding provisions of
    this subsection, as determined appropriate by the Secretary, the
    following groups of providers of services and suppliers which
    have established a mechanism for shared governance are eligible
    to participate as ACOs under the program under this section:
    ``(A) ACO professionals in group practice
    arrangements.
    ``(B) Networks of individual practices of ACO
    professionals.
    ``(C) Partnerships or joint venture arrangements
    between hospitals and ACO professionals.
    ``(D) Hospitals employing ACO professionals.
    ``(E) Such other groups of providers of services and
    suppliers as the Secretary determines appropriate.
    ``(2) Requirements.--An ACO shall meet the following
    requirements:
    ``(A) The ACO shall be willing to become accountable
    for the quality, cost, and overall care of the Medicare
    fee-for-service beneficiaries assigned to it.

    [[Page 396]]

    ``(B) <> The ACO shall enter into
    an agreement with the Secretary to participate in the
    program for not less than a 3-year period (referred to
    in this section as the `agreement period').
    ``(C) The ACO shall have a formal legal structure
    that would allow the organization to receive and
    distribute payments for shared savings under subsection
    (d)(2) to participating providers of services and
    suppliers.
    ``(D) The ACO shall include primary care ACO
    professionals that are sufficient for the number of
    Medicare fee-for-service beneficiaries assigned to the
    ACO under subsection (c). At a minimum, the ACO shall
    have at least 5,000 such beneficiaries assigned to it
    under subsection (c) in order to be eligible to
    participate in the ACO program.
    ``(E) The ACO shall provide the Secretary with such
    information regarding ACO professionals participating in
    the ACO as the Secretary determines necessary to support
    the assignment of Medicare fee-for-service beneficiaries
    to an ACO, the implementation of quality and other
    reporting requirements under paragraph (3), and the
    determination of payments for shared savings under
    subsection (d)(2).
    ``(F) The ACO shall have in place a leadership and
    management structure that includes clinical and
    administrative systems.
    ``(G) The ACO shall define processes to promote
    evidence-based medicine and patient engagement, report
    on quality and cost measures, and coordinate care, such
    as through the use of telehealth, remote patient
    monitoring, and other such enabling technologies.
    ``(H) The ACO shall demonstrate to the Secretary
    that it meets patient-centeredness criteria specified by
    the Secretary, such as the use of patient and caregiver
    assessments or the use of individualized care plans.
    ``(3) Quality and other reporting requirements.--
    ``(A) In general.-- <> The
    Secretary shall determine appropriate measures to assess
    the quality of care furnished by the ACO, such as
    measures of--
    ``(i) clinical processes and outcomes;
    ``(ii) patient and, where practicable,
    caregiver experience of care; and
    ``(iii) utilization (such as rates of hospital
    admissions for ambulatory care sensitive
    conditions).
    ``(B) Reporting requirements.--An ACO shall submit
    data in a form and manner specified by the Secretary on
    measures the Secretary determines necessary for the ACO
    to report in order to evaluate the quality of care
    furnished by the ACO. Such data may include care
    transitions across health care settings, including
    hospital discharge planning and post-hospital discharge
    follow-up by ACO professionals, as the Secretary
    determines appropriate.
    ``(C) Quality performance standards.--The Secretary
    shall establish quality performance standards to assess
    the quality of care furnished by ACOs. The Secretary
    shall seek to improve the quality of care furnished by

    [[Page 397]]

    ACOs over time by specifying higher standards, new
    measures, or both for purposes of assessing such quality
    of care.
    ``(D) Other reporting requirements.--The Secretary
    may, as the Secretary determines appropriate,
    incorporate reporting requirements and incentive
    payments related to the physician quality reporting
    initiative (PQRI) under section 1848, including such
    requirements and such payments related to electronic
    prescribing, electronic health records, and other
    similar initiatives under section 1848, and may use
    alternative criteria than would otherwise apply under
    such section for determining whether to make such
    payments. The incentive payments described in the
    preceding sentence shall not be taken into consideration
    when calculating any payments otherwise made under
    subsection (d).
    ``(4) No duplication in participation in shared savings
    programs.--A provider of services or supplier that participates
    in any of the following shall not be eligible to participate in
    an ACO under this section:
    ``(A) A model tested or expanded under section 1115A
    that involves shared savings under this title, or any
    other program or demonstration project that involves
    such shared savings.
    ``(B) The independence at home medical practice
    pilot program under section 1866E.

    ``(c) Assignment of Medicare Fee-for-service Beneficiaries to
    ACOs.-- <> The Secretary shall determine an
    appropriate method to assign Medicare fee-for-service beneficiaries to
    an ACO based on their utilization of primary care services provided
    under this title by an ACO professional described in subsection
    (h)(1)(A).

    ``(d) Payments and Treatment of Savings.--
    ``(1) Payments.--
    ``(A) In general.--Under the program, subject to
    paragraph (3), payments shall continue to be made to
    providers of services and suppliers participating in an
    ACO under the original Medicare fee-for-service program
    under parts A and B in the same manner as they would
    otherwise be made except that a participating ACO is
    eligible to receive payment for shared savings under
    paragraph (2) if--
    ``(i) the ACO meets quality performance
    standards established by the Secretary under
    subsection (b)(3); and
    ``(ii) the ACO meets the requirement under
    subparagraph (B)(i).
    ``(B) Savings requirement and benchmark.--
    ``(i) Determining savings.--In each year of
    the agreement period, an ACO shall be eligible to
    receive payment for shared savings under paragraph
    (2) only if the estimated average per capita
    Medicare expenditures under the ACO for Medicare
    fee-for-service beneficiaries for parts A and B
    services, adjusted for beneficiary
    characteristics, is at least the percent specified
    by the Secretary below the applicable benchmark
    under clause (ii). The Secretary shall determine
    the appropriate percent described in the preceding
    sentence to account for normal variation in
    expenditures under

    [[Page 398]]

    this title, based upon the number of Medicare fee-
    for-service beneficiaries assigned to an ACO.
    ``(ii) Establish and update benchmark.--The
    Secretary shall estimate a benchmark for each
    agreement period for each ACO using the most
    recent available 3 years of per-beneficiary
    expenditures for parts A and B services for
    Medicare fee-for-service beneficiaries assigned to
    the ACO. Such benchmark shall be adjusted for
    beneficiary characteristics and such other factors
    as the Secretary determines appropriate and
    updated by the projected absolute amount of growth
    in national per capita expenditures for parts A
    and B services under the original Medicare fee-
    for-service program, as estimated by the
    Secretary. Such benchmark shall be reset at the
    start of each agreement period.
    ``(2) Payments for shared savings.--Subject to performance
    with respect to the quality performance standards established by
    the Secretary under subsection (b)(3), if an ACO meets the
    requirements under paragraph (1), a percent (as determined
    appropriate by the Secretary) of the difference between such
    estimated average per capita Medicare expenditures in a year,
    adjusted for beneficiary characteristics, under the ACO and such
    benchmark for the ACO may be paid to the ACO as shared savings
    and the remainder of such difference shall be retained by the
    program under this title. <> The Secretary
    shall establish limits on the total amount of shared savings
    that may be paid to an ACO under this paragraph.
    ``(3) Monitoring avoidance of at-risk patients.--If the
    Secretary determines that an ACO has taken steps to avoid
    patients at risk in order to reduce the likelihood of increasing
    costs to the ACO the Secretary may impose an appropriate
    sanction on the ACO, including termination from the program.
    ``(4) Termination.--The Secretary may terminate an agreement
    with an ACO if it does not meet the quality performance
    standards established by the Secretary under subsection (b)(3).

    ``(e) Administration.--Chapter 35 of title 44, United States Code,
    shall not apply to the program.
    ``(f) Waiver Authority.--The Secretary may waive such requirements
    of sections 1128A and 1128B and title XVIII of this Act as may be
    necessary to carry out the provisions of this section.
    ``(g) Limitations on Review.--There shall be no administrative or
    judicial review under section 1869, section 1878, or otherwise of--
    ``(1) the specification of criteria under subsection
    (a)(1)(B);
    ``(2) the assessment of the quality of care furnished by an
    ACO and the establishment of performance standards under
    subsection (b)(3);
    ``(3) the assignment of Medicare fee-for-service
    beneficiaries to an ACO under subsection (c);
    ``(4) the determination of whether an ACO is eligible for
    shared savings under subsection (d)(2) and the amount of such
    shared savings, including the determination of the estimated
    average per capita Medicare expenditures under the ACO for
    Medicare fee-for-service beneficiaries assigned to the ACO and
    the average benchmark for the ACO under subsection (d)(1)(B);

    [[Page 399]]

    ``(5) the percent of shared savings specified by the
    Secretary under subsection (d)(2) and any limit on the total
    amount of shared savings established by the Secretary under such
    subsection; and
    ``(6) the termination of an ACO under subsection (d)(4).

    ``(h) Definitions.--In this section:
    ``(1) ACO professional.--The term `ACO professional' means--
    ``(A) a physician (as defined in section
    1861(r)(1)); and
    ``(B) a practitioner described in section
    1842(b)(18)(C)(i).
    ``(2) Hospital.--The term `hospital' means a subsection (d)
    hospital (as defined in section 1886(d)(1)(B)).
    ``(3) Medicare fee-for-service beneficiary.--The term
    `Medicare fee-for-service beneficiary' means an individual who
    is enrolled in the original Medicare fee-for-service program
    under parts A and B and is not enrolled in an MA plan under part
    C, an eligible organization under section 1876, or a PACE
    program under section 1894.''.

    SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

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

    ``national pilot program on payment bundling

    ``Sec. 1866D.  <> (a) Implementation.--
    ``(1) In general.--The Secretary shall establish a pilot
    program for integrated care during an episode of care provided
    to an applicable beneficiary around a hospitalization in order
    to improve the coordination, quality, and efficiency of health
    care services under this title.
    ``(2) Definitions.--In this section:
    ``(A) Applicable beneficiary.--The term `applicable
    beneficiary' means an individual who--
    ``(i) is entitled to, or enrolled for,
    benefits under part A and enrolled for benefits
    under part B of such title, but not enrolled under
    part C or a PACE program under section 1894; and
    ``(ii) is admitted to a hospital for an
    applicable condition.
    ``(B) Applicable condition.--The term `applicable
    condition' means 1 or more of 8 conditions selected by
    the Secretary. In selecting conditions under the
    preceding sentence, the Secretary shall take into
    consideration the following factors:
    ``(i) Whether the conditions selected include
    a mix of chronic and acute conditions.
    ``(ii) Whether the conditions selected include
    a mix of surgical and medical conditions.
    ``(iii) Whether a condition is one for which
    there is evidence of an opportunity for providers
    of services and suppliers to improve the quality
    of care furnished while reducing total
    expenditures under this title.
    ``(iv) Whether a condition has significant
    variation in--
    ``(I) the number of readmissions;
    and

    [[Page 400]]

    ``(II) the amount of expenditures
    for post-acute care spending under this
    title.
    ``(v) Whether a condition is high-volume and
    has high post-acute care expenditures under this
    title.
    ``(vi) Which conditions the Secretary
    determines are most amenable to bundling across
    the spectrum of care given practice patterns under
    this title.
    ``(C) Applicable services.--The term `applicable
    services' means the following:
    ``(i) Acute care inpatient services.
    ``(ii) Physicians' services delivered in and
    outside of an acute care hospital setting.
    ``(iii) Outpatient hospital services,
    including emergency department services.
    ``(iv) Post-acute care services, including
    home health services, skilled nursing services,
    inpatient rehabilitation services, and inpatient
    hospital services furnished by a long-term care
    hospital.
    ``(v) Other services the Secretary determines
    appropriate.
    ``(D) Episode of care.--
    ``(i) In general.--Subject to clause (ii), the
    term `episode of care' means, with respect to an
    applicable condition and an applicable
    beneficiary, the period that includes--
    ``(I) the 3 days prior to the
    admission of the applicable beneficiary
    to a hospital for the applicable
    condition;
    ``(II) the length of stay of the
    applicable beneficiary in such hospital;
    and
    ``(III) the 30 days following the
    discharge of the applicable beneficiary
    from such hospital.
    ``(ii) Establishment of period by the
    secretary.--The Secretary, as appropriate, may
    establish a period (other than the period
    described in clause (i)) for an episode of care
    under the pilot program.
    ``(E) Physicians' services.--The term `physicians'
    services' has the meaning given such term in section
    1861(q).
    ``(F) Pilot program.--The term `pilot program' means
    the pilot program under this section.
    ``(G) Provider of services.--The term `provider of
    services' has the meaning given such term in section
    1861(u).
    ``(H) Readmission.--The term `readmission' has the
    meaning given such term in section 1886(q)(5)(E).
    ``(I) Supplier.--The term `supplier' has the meaning
    given such term in section 1861(d).
    ``(3) Deadline for implementation.--The Secretary shall
    establish the pilot program not later than January 1, 2013.

    ``(b) Developmental Phase.--
    ``(1) Determination of patient assessment instrument.--The
    Secretary shall determine which patient assessment instrument
    (such as the Continuity Assessment Record and Evaluation (CARE)
    tool) shall be used under the pilot program to evaluate the
    applicable condition of an applicable beneficiary for purposes
    of determining the most

    [[Page 401]]

    clinically appropriate site for the provision of post-acute care
    to the applicable beneficiary.
    ``(2) Development of quality measures for an episode of care
    and for post-acute care.--
    ``(A) In general.--The Secretary, in consultation
    with the Agency for Healthcare Research and Quality and
    the entity with a contract under section 1890(a) of the
    Social Security Act, shall develop quality measures for
    use in the pilot program--
    ``(i) for episodes of care; and
    ``(ii) for post-acute care.
    ``(B) Site-neutral post-acute care quality
    measures.--Any quality measures developed under
    subparagraph (A)(ii) shall be site-neutral.
    ``(C) Coordination with quality measure development
    and endorsement procedures.--The Secretary shall ensure
    that the development of quality measures under
    subparagraph (A) is done in a manner that is consistent
    with the measures developed and endorsed under section
    1890 and 1890A that are applicable to all post-acute
    care settings.

    ``(c) Details.--
    ``(1) Duration.--
    ``(A) In general.--Subject to subparagraph (B), the
    pilot program shall be conducted for a period of 5
    years.
    ``(B) Extension.-- <> The
    Secretary may extend the duration of the pilot program
    for providers of services and suppliers participating in
    the pilot program as of the day before the end of the 5-
    year period described in subparagraph (A), for a period
    determined appropriate by the Secretary, if the
    Secretary determines that such extension will result in
    improving or not reducing the quality of patient care
    and reducing spending under this title.
    ``(2) Participating providers of services and suppliers.--
    ``(A) In general.--An entity comprised of providers
    of services and suppliers, including a hospital, a
    physician group, a skilled nursing facility, and a home
    health agency, who are otherwise participating under
    this title, may submit an application to the Secretary
    to provide applicable services to applicable individuals
    under this section.
    ``(B) Requirements.--The Secretary shall develop
    requirements for entities to participate in the pilot
    program under this section. Such requirements shall
    ensure that applicable beneficiaries have an adequate
    choice of providers of services and suppliers under the
    pilot program.
    ``(3) Payment methodology.--
    ``(A) In general.--
    ``(i) Establishment of payment methods.--The
    Secretary shall develop payment methods for the
    pilot program for entities participating in the
    pilot program. Such payment methods may include
    bundled payments and bids from entities for
    episodes of care. The Secretary shall make
    payments to the entity for services covered under
    this section.
    ``(ii) No additional program expenditures.--
    Payments under this section for applicable items
    and

    [[Page 402]]

    services under this title (including payment for
    services described in subparagraph (B)) for
    applicable beneficiaries for a year shall be
    established in a manner that does not result in
    spending more for such entity for such
    beneficiaries than would otherwise be expended for
    such entity for such beneficiaries for such year
    if the pilot program were not implemented, as
    estimated by the Secretary.
    ``(B) Inclusion of certain services.--A payment
    methodology tested under the pilot program shall include
    payment for the furnishing of applicable services and
    other appropriate services, such as care coordination,
    medication reconciliation, discharge planning,
    transitional care services, and other patient-centered
    activities as determined appropriate by the Secretary.
    ``(C) Bundled payments.--
    ``(i) In general.--A bundled payment under the
    pilot program shall--
    ``(I) be comprehensive, covering the
    costs of applicable services and other
    appropriate services furnished to an
    individual during an episode of care (as
    determined by the Secretary); and
    ``(II) be made to the entity which
    is participating in the pilot program.
    ``(ii) Requirement for provision of applicable
    services and other appropriate services.--
    Applicable services and other appropriate services
    for which payment is made under this subparagraph
    shall be furnished or directed by the entity which
    is participating in the pilot program.
    ``(D) Payment for post-acute care services after the
    episode of care.-- <> The Secretary
    shall establish procedures, in the case where an
    applicable beneficiary requires continued post-acute
    care services after the last day of the episode of care,
    under which payment for such services shall be made.
    ``(4) Quality measures.--
    ``(A) In general.--The Secretary shall establish
    quality measures (including quality measures of process,
    outcome, and structure) related to care provided by
    entities participating in the pilot program. Quality
    measures established under the preceding sentence shall
    include measures of the following:
    ``(i) Functional status improvement.
    ``(ii) Reducing rates of avoidable hospital
    readmissions.
    ``(iii) Rates of discharge to the community.
    ``(iv) Rates of admission to an emergency room
    after a hospitalization.
    ``(v) Incidence of health care acquired
    infections.
    ``(vi) Efficiency measures.
    ``(vii) Measures of patient-centeredness of
    care.
    ``(viii) Measures of patient perception of
    care.
    ``(ix) Other measures, including measures of
    patient outcomes, determined appropriate by the
    Secretary.
    ``(B) Reporting on quality measures.--

    [[Page 403]]

    ``(i) In general.--A entity shall submit data
    to the Secretary on quality measures established
    under subparagraph (A) during each year of the
    pilot program (in a form and manner, subject to
    clause (iii), specified by the Secretary).
    ``(ii) Submission of data through electronic
    health record.--To the extent practicable, the
    Secretary shall specify that data on measures be
    submitted under clause (i) through the use of an
    qualified electronic health record (as defined in
    section 3000(13) of the Public Health Service Act
    (42 U.S.C. 300jj-11(13)) in a manner specified by
    the Secretary.

    ``(d) Waiver.--The Secretary may waive such provisions of this title
    and title XI as may be necessary to carry out the pilot program.
    ``(e) Independent Evaluation and Reports on Pilot Program.--
    ``(1) Independent evaluation.--The Secretary shall conduct
    an independent evaluation of the pilot program, including the
    extent to which the pilot program has--
    ``(A) improved quality measures established under
    subsection (c)(4)(A);
    ``(B) improved health outcomes;
    ``(C) improved applicable beneficiary access to
    care; and
    ``(D) reduced spending under this title.
    ``(2) Reports.--
    ``(A) Interim report.--Not later than 2 years after
    the implementation of the pilot program, the Secretary
    shall submit to Congress a report on the initial results
    of the independent evaluation conducted under paragraph
    (1).
    ``(B) Final report.--Not later than 3 years after
    the implementation of the pilot program, the Secretary
    shall submit to Congress a report on the final results
    of the independent evaluation conducted under paragraph
    (1).

    ``(f) Consultation.--The Secretary shall consult with
    representatives of small rural hospitals, including critical access
    hospitals (as defined in section 1861(mm)(1)), regarding their
    participation in the pilot program. Such consultation shall include
    consideration of innovative methods of implementing bundled payments in
    hospitals described in the preceding sentence, taking into consideration
    any difficulties in doing so as a result of the low volume of services
    provided by such hospitals.
    ``(g) Implementation Plan.--
    ``(1) In general.-- <> Not later than
    January 1, 2016, the Secretary shall submit a plan for the
    implementation of an expansion of the pilot program if the
    Secretary determines that such expansion will result in
    improving or not reducing the quality of patient care and
    reducing spending under this title.

    ``(h) Administration.--Chapter 35 of title 44, United States Code,
    shall not apply to the selection, testing, and evaluation of models or
    the expansion of such models under this section.''.

    [[Page 404]]

    SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION PROGRAM.

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

    ``independence at home medical practice demonstration program

    ``Sec. 1866D.  <> (a) Establishment.--
    ``(1) In general.--The Secretary shall conduct a
    demonstration program (in this section referred to as the
    `demonstration program') to test a payment incentive and service
    delivery model that utilizes physician and nurse practitioner
    directed home-based primary care teams designed to reduce
    expenditures and improve health outcomes in the provision of
    items and services under this title to applicable beneficiaries
    (as defined in subsection (d)).
    ``(2) Requirement.--The demonstration program shall test
    whether a model described in paragraph (1), which is accountable
    for providing comprehensive, coordinated, continuous, and
    accessible care to high-need populations at home and
    coordinating health care across all treatment settings, results
    in--
    ``(A) reducing preventable hospitalizations;
    ``(B) preventing hospital readmissions;
    ``(C) reducing emergency room visits;
    ``(D) improving health outcomes commensurate with
    the beneficiaries' stage of chronic illness;
    ``(E) improving the efficiency of care, such as by
    reducing duplicative diagnostic and laboratory tests;
    ``(F) reducing the cost of health care services
    covered under this title; and
    ``(G) achieving beneficiary and family caregiver
    satisfaction.

    ``(b) Independence at Home Medical Practice.--
    ``(1) Independence at home medical practice defined.--In
    this section:
    ``(A) In general.--The term `independence at home
    medical practice' means a legal entity that--
    ``(i) is comprised of an individual physician
    or nurse practitioner or group of physicians and
    nurse practitioners that provides care as part of
    a team that includes physicians, nurses, physician
    assistants, pharmacists, and other health and
    social services staff as appropriate who have
    experience providing home-based primary care to
    applicable beneficiaries, make in-home visits, and
    are available 24 hours per day, 7 days per week to
    carry out plans of care that are tailored to the
    individual beneficiary's chronic conditions and
    designed to achieve the results in subsection (a);
    ``(ii) is organized at least in part for the
    purpose of providing physicians' services;
    ``(iii) has documented experience in providing
    home-based primary care services to high-cost
    chronically ill beneficiaries, as determined
    appropriate by the Secretary;

    [[Page 405]]

    ``(iv) furnishes services to at least 200
    applicable beneficiaries (as defined in subsection
    (d)) during each year of the demonstration
    program;
    ``(v) has entered into an agreement with the
    Secretary;
    ``(vi) uses electronic health information
    systems, remote monitoring, and mobile diagnostic
    technology; and
    ``(vii) meets such other criteria as the
    Secretary determines to be appropriate to
    participate in the demonstration program.
    <> The entity shall
    report on quality measures (in such form, manner, and
    frequency as specified by the Secretary, which may be
    for the group, for providers of services and suppliers,
    or both) and report to the Secretary (in a form, manner,
    and frequency as specified by the Secretary) such data
    as the Secretary determines appropriate to monitor and
    evaluate the demonstration program.
    ``(B) Physician.--The term `physician' includes,
    except as the Secretary may otherwise provide, any
    individual who furnishes services for which payment may
    be made as physicians' services and has the medical
    training or experience to fulfill the physician's role
    described in subparagraph (A)(i).
    ``(2) Participation of nurse practitioners and physician
    assistants.--Nothing in this section shall be construed to
    prevent a nurse practitioner or physician assistant from
    participating in, or leading, a home-based primary care team as
    part of an independence at home medical practice if--
    ``(A) all the requirements of this section are met;
    ``(B) the nurse practitioner or physician assistant,
    as the case may be, is acting consistent with State law;
    and
    ``(C) the nurse practitioner or physician assistant
    has the medical training or experience to fulfill the
    nurse practitioner or physician assistant role described
    in paragraph (1)(A)(i).
    ``(3) Inclusion of providers and practitioners.--Nothing in
    this subsection shall be construed as preventing an independence
    at home medical practice from including a provider of services
    or a participating practitioner described in section
    1842(b)(18)(C) that is affiliated with the practice under an
    arrangement structured so that such provider of services or
    practitioner participates in the demonstration program and
    shares in any savings under the demonstration program.
    ``(4) Quality and performance standards.--The Secretary
    shall develop quality performance standards for independence at
    home medical practices participating in the demonstration
    program.

    ``(c) Payment Methodology.--
    ``(1) Establishment of target spending level.--The Secretary
    shall establish an estimated annual spending target, for the
    amount the Secretary estimates would have been spent in the
    absence of the demonstration, for items and services

    [[Page 406]]

    covered under parts A and B furnished to applicable
    beneficiaries for each qualifying independence at home medical
    practice under this section. Such spending targets shall be
    determined on a per capita basis. Such spending targets shall
    include a risk corridor that takes into account normal variation
    in expenditures for items and services covered under parts A and
    B furnished to such beneficiaries with the size of the corridor
    being related to the number of applicable beneficiaries
    furnished services by each independence at home medical
    practice. The spending targets may also be adjusted for other
    factors as the Secretary determines appropriate.
    ``(2) Incentive payments.--Subject to performance on quality
    measures, a qualifying independence at home medical practice is
    eligible to receive an incentive payment under this section if
    actual expenditures for a year for the applicable beneficiaries
    it enrolls are less than the estimated spending target
    established under paragraph (1) for such year. An incentive
    payment for such year shall be equal to a portion (as determined
    by the Secretary) of the amount by which actual expenditures
    (including incentive payments under this paragraph) for
    applicable beneficiaries under parts A and B for such year are
    estimated to be less than 5 percent less than the estimated
    spending target for such year, as determined under paragraph
    (1).

    ``(d) Applicable Beneficiaries.--
    ``(1) Definition.--In this section, the term `applicable
    beneficiary' means, with respect to a qualifying independence at
    home medical practice, an individual who the practice has
    determined--
    ``(A) is entitled to benefits under part A and
    enrolled for benefits under part B;
    ``(B) is not enrolled in a Medicare Advantage plan
    under part C or a PACE program under section 1894;
    ``(C) has 2 or more chronic illnesses, such as
    congestive heart failure, diabetes, other dementias
    designated by the Secretary, chronic obstructive
    pulmonary disease, ischemic heart disease, stroke,
    Alzheimer's Disease and neurodegenerative diseases, and
    other diseases and conditions designated by the
    Secretary which result in high costs under this title;
    ``(D) within the past 12 months has had a
    nonelective hospital admission;
    ``(E) within the past 12 months has received acute
    or subacute rehabilitation services;
    ``(F) has 2 or more functional dependencies
    requiring the assistance of another person (such as
    bathing, dressing, toileting, walking, or feeding); and
    ``(G) meets such other criteria as the Secretary
    determines appropriate.
    ``(2) Patient election to participate.--
    <> The Secretary shall determine an
    appropriate method of ensuring that applicable beneficiaries
    have agreed to enroll in an independence at home medical
    practice under the demonstration program. Enrollment in the
    demonstration program shall be voluntary.
    ``(3) Beneficiary access to services.--Nothing in this
    section shall be construed as encouraging physicians or nurse

    [[Page 407]]

    practitioners to limit applicable beneficiary access to services
    covered under this title and applicable beneficiaries shall not
    be required to relinquish access to any benefit under this title
    as a condition of receiving services from an independence at
    home medical practice.

    ``(e) Implementation.--
    ``(1) Starting date.--The demonstration program shall begin
    no later than January 1, 2012. An agreement with an independence
    at home medical practice under the demonstration program may
    cover not more than a 3-year period.
    ``(2) No physician duplication in demonstration
    participation.--The Secretary shall not pay an independence at
    home medical practice under this section that participates in
    section 1899.
    ``(3) No beneficiary duplication in demonstration
    participation.--The Secretary shall ensure that no applicable
    beneficiary enrolled in an independence at home medical practice
    under this section is participating in the programs under
    section 1899.
    ``(4) Preference.--In approving an independence at home
    medical practice, the Secretary shall give preference to
    practices that are--
    ``(A) located in high-cost areas of the country;
    ``(B) have experience in furnishing health care
    services to applicable beneficiaries in the home; and
    ``(C) use electronic medical records, health
    information technology, and individualized plans of
    care.
    ``(5) Limitation on number of practices.--In selecting
    qualified independence at home medical practices to participate
    under the demonstration program, the Secretary shall limit the
    number of such practices so that the number of applicable
    beneficiaries that may participate in the demonstration program
    does not exceed 10,000.
    ``(6) Waiver.--The Secretary may waive such provisions of
    this title and title XI as the Secretary determines necessary in
    order to implement the demonstration program.
    ``(7) Administration.--Chapter 35 of title 44, United States
    Code, shall not apply to this section.

    ``(f) Evaluation and Monitoring.--
    ``(1) In general.--The Secretary shall evaluate each
    independence at home medical practice under the demonstration
    program to assess whether the practice achieved the results
    described in subsection (a).
    ``(2) Monitoring applicable beneficiaries.--The Secretary
    may monitor data on expenditures and quality of services under
    this title after an applicable beneficiary discontinues
    receiving services under this title through a qualifying
    independence at home medical practice.

    ``(g) Reports to Congress.--The Secretary shall conduct an
    independent evaluation of the demonstration program and submit to
    Congress a final report, including best practices under the
    demonstration program. Such report shall include an analysis of the
    demonstration program on coordination of care, expenditures under this
    title, applicable beneficiary access to services, and the quality of
    health care services provided to applicable beneficiaries.
    ``(h) Funding.--For purposes of administering and carrying out the
    demonstration program, other than for payments for items

    [[Page 408]]

    and services furnished under this title and incentive payments under
    subsection (c), in addition to funds otherwise appropriated, there shall
    be transferred to the Secretary for the Center for Medicare & Medicaid
    Services Program Management Account from the Federal Hospital Insurance
    Trust Fund under section 1817 and the Federal Supplementary Medical
    Insurance Trust Fund under section 1841 (in proportions determined
    appropriate by the Secretary) $5,000,000 for each of fiscal years 2010
    through 2015. Amounts transferred under this subsection for a fiscal
    year shall be available until expended.
    ``(i) Termination.--
    ``(1) Mandatory termination.--The Secretary shall terminate
    an agreement with an independence at home medical practice if--
    ``(A) the Secretary estimates or determines that
    such practice will not receive an incentive payment for
    the second of 2 consecutive years under the
    demonstration program; or
    ``(B) such practice fails to meet quality standards
    during any year of the demonstration program.
    ``(2) Permissive termination.--The Secretary may terminate
    an agreement with an independence at home medical practice for
    such other reasons determined appropriate by the Secretary.''.

    SEC. 3025. HOSPITAL READMISSIONS REDUCTION PROGRAM.

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C.
    1395ww), as amended by sections 3001 and 3008, is amended by adding at
    the end the following new subsection:
    ``(q) Hospital Readmissions Reduction Program.--
    ``(1) In general.--With respect to payment for discharges
    from an applicable hospital (as defined in paragraph (5)(C))
    occurring during a fiscal year beginning on or after October 1,
    2012, in order to account for excess readmissions in the
    hospital, the Secretary shall reduce the payments that would
    otherwise be made to such hospital under subsection (d) (or
    section 1814(b)(3), as the case may be) for such a discharge by
    an amount equal to the product of--
    ``(A) the base operating DRG payment amount (as
    defined in paragraph (2)) for the discharge; and
    ``(B) the adjustment factor (described in paragraph
    (3)(A)) for the hospital for the fiscal year.
    ``(2) Base operating drg payment amount defined.--
    ``(A) In general.-- <> Except as
    provided in subparagraph (B), in this subsection, the
    term `base operating DRG payment amount' means, with
    respect to a hospital for a fiscal year--
    ``(i) the payment amount that would otherwise
    be made under subsection (d) (determined without
    regard to subsection (o)) for a discharge if this
    subsection did not apply; reduced by
    ``(ii) any portion of such payment amount that
    is attributable to payments under paragraphs
    (5)(A), (5)(B), (5)(F), and (12) of subsection
    (d).
    ``(B) Special rules for certain hospitals.--
    ``(i) Sole community hospitals and medicare-
    dependent, small rural hospitals.--In the case of

    [[Page 409]]

    a medicare-dependent, small rural hospital (with
    respect to discharges occurring during fiscal
    years 2012 and 2013) or a sole community hospital,
    in applying subparagraph (A)(i), the payment
    amount that would otherwise be made under
    subsection (d) shall be determined without regard
    to subparagraphs (I) and (L) of subsection (b)(3)
    and subparagraphs (D) and (G) of subsection
    (d)(5).
    ``(ii) Hospitals paid under section 1814.--
    <> In the case of a
    hospital that is paid under section 1814(b)(3),
    the Secretary may exempt such hospitals provided
    that States paid under such section submit an
    annual report to the Secretary describing how a
    similar program in the State for a participating
    hospital or hospitals achieves or surpasses the
    measured results in terms of patient health
    outcomes and cost savings established herein with
    respect to this section.
    ``(3) Adjustment factor.--
    ``(A) In general.--For purposes of paragraph (1),
    the adjustment factor under this paragraph for an
    applicable hospital for a fiscal year is equal to the
    greater of--
    ``(i) the ratio described in subparagraph (B)
    for the hospital for the applicable period (as
    defined in paragraph (5)(D)) for such fiscal year;
    or
    ``(ii) the floor adjustment factor specified
    in subparagraph (C).
    ``(B) Ratio.--The ratio described in this
    subparagraph for a hospital for an applicable period is
    equal to 1 minus the ratio of--
    ``(i) the aggregate payments for excess
    readmissions (as defined in paragraph (4)(A)) with
    respect to an applicable hospital for the
    applicable period; and
    ``(ii) the aggregate payments for all
    discharges (as defined in paragraph (4)(B)) with
    respect to such applicable hospital for such
    applicable period.
    ``(C) Floor adjustment factor.--For purposes of
    subparagraph (A), the floor adjustment factor specified
    in this subparagraph for--
    ``(i) fiscal year 2013 is 0.99;
    ``(ii) fiscal year 2014 is 0.98; or
    ``(iii) fiscal year 2015 and subsequent fiscal
    years is 0.97.
    ``(4) Aggregate payments, excess readmission ratio
    defined.--For purposes of this subsection:
    ``(A) Aggregate payments for excess readmissions.--
    The term `aggregate payments for excess readmissions'
    means, for a hospital for an applicable period, the sum,
    for applicable conditions (as defined in paragraph
    (5)(A)), of the product, for each applicable condition,
    of--
    ``(i) the base operating DRG payment amount
    for such hospital for such applicable period for
    such condition;
    ``(ii) the number of admissions for such
    condition for such hospital for such applicable
    period; and
    ``(iii) the excess readmissions ratio (as
    defined in subparagraph (C)) for such hospital for
    such applicable period minus 1.

    [[Page 410]]

    ``(B) Aggregate payments for all discharges.--The
    term `aggregate payments for all discharges' means, for
    a hospital for an applicable period, the sum of the base
    operating DRG payment amounts for all discharges for all
    conditions from such hospital for such applicable
    period.
    ``(C) Excess readmission ratio.--
    ``(i) In general.--Subject to clause (ii), the
    term `excess readmissions ratio' means, with
    respect to an applicable condition for a hospital
    for an applicable period, the ratio (but not less
    than 1.0) of--
    ``(I) the risk adjusted readmissions
    based on actual readmissions, as
    determined consistent with a readmission
    measure methodology that has been
    endorsed under paragraph (5)(A)(ii)(I),
    for an applicable hospital for such
    condition with respect to such
    applicable period; to
    ``(II) the risk adjusted expected
    readmissions (as determined consistent
    with such a methodology) for such
    hospital for such condition with respect
    to such applicable period.
    ``(ii) Exclusion of certain readmissions.--For
    purposes of clause (i), with respect to a
    hospital, excess readmissions shall not include
    readmissions for an applicable condition for which
    there are fewer than a minimum number (as
    determined by the Secretary) of discharges for
    such applicable condition for the applicable
    period and such hospital.
    ``(5) Definitions.--For purposes of this subsection:
    ``(A) Applicable condition.--The term `applicable
    condition' means, subject to subparagraph (B), a
    condition or procedure selected by the Secretary among
    conditions and procedures for which--
    ``(i) readmissions (as defined in subparagraph
    (E)) that represent conditions or procedures that
    are high volume or high expenditures under this
    title (or other criteria specified by the
    Secretary); and
    ``(ii) measures of such readmissions--
    ``(I) have been endorsed by the
    entity with a contract under section
    1890(a); and
    ``(II) such endorsed measures have
    exclusions for readmissions that are
    unrelated to the prior discharge (such
    as a planned readmission or transfer to
    another applicable hospital).
    ``(B) Expansion of applicable
    conditions. <> --Beginning with
    fiscal year 2015, the Secretary shall, to the extent
    practicable, expand the applicable conditions beyond the
    3 conditions for which measures have been endorsed as
    described in subparagraph (A)(ii)(I) as of the date of
    the enactment of this subsection to the additional 4
    conditions that have been identified by the Medicare
    Payment Advisory Commission in its report to Congress in
    June 2007 and to other conditions and procedures as
    determined appropriate by the Secretary. In expanding
    such applicable conditions, the Secretary shall seek the
    endorsement described in subparagraph (A)(ii)(I) but may
    apply such measures without such an endorsement in the
    case of a specified area or medical topic determined
    appropriate by

    [[Page 411]]

    the Secretary for which a feasible and practical measure
    has not been endorsed by the entity with a contract
    under section 1890(a) as long as due consideration is
    given to measures that have been endorsed or adopted by
    a consensus organization identified by the Secretary.
    ``(C) Applicable hospital.--The term `applicable
    hospital' means a subsection (d) hospital or a hospital
    that is paid under section 1814(b)(3), as the case may
    be.
    ``(D) Applicable period.--The term `applicable
    period' means, with respect to a fiscal year, such
    period as the Secretary shall specify.
    ``(E) Readmission.--The term `readmission' means, in
    the case of an individual who is discharged from an
    applicable hospital, the admission of the individual to
    the same or another applicable hospital within a time
    period specified by the Secretary from the date of such
    discharge. Insofar as the discharge relates to an
    applicable condition for which there is an endorsed
    measure described in subparagraph (A)(ii)(I), such time
    period (such as 30 days) shall be consistent with the
    time period specified for such measure.
    ``(6) Reporting hospital specific information.--
    ``(A) In general.-- <> The Secretary shall make information
    available to the public regarding readmission rates of
    each subsection (d) hospital under the program.
    ``(B) Opportunity to review and submit
    corrections.--The Secretary shall ensure that a
    subsection (d) hospital has the opportunity to review,
    and submit corrections for, the information to be made
    public with respect to the hospital under subparagraph
    (A) prior to such information being made public.
    ``(C) Website.--Such information shall be posted on
    the Hospital Compare Internet website in an easily
    understandable format.
    ``(7) Limitations on review.--There shall be no
    administrative or judicial review under section 1869, section
    1878, or otherwise of the following:
    ``(A) The determination of base operating DRG
    payment amounts.
    ``(B) The methodology for determining the adjustment
    factor under paragraph (3), including excess
    readmissions ratio under paragraph (4)(C), aggregate
    payments for excess readmissions under paragraph (4)(A),
    and aggregate payments for all discharges under
    paragraph (4)(B), and applicable periods and applicable
    conditions under paragraph (5).
    ``(C) The measures of readmissions as described in
    paragraph (5)(A)(ii).
    ``(8) Readmission rates for all patients.--
    ``(A) Calculation of readmission.--The Secretary
    shall calculate readmission rates for all patients (as
    defined in subparagraph (D)) for a specified hospital
    (as defined in subparagraph (D)(ii)) for an applicable
    condition (as defined in paragraph (5)(B)) and other
    conditions deemed appropriate by the Secretary for an
    applicable period (as defined in paragraph (5)(D)) in
    the same manner as used to calculate such readmission
    rates for hospitals with

    [[Page 412]]

    respect to this title and posted on the CMS Hospital
    Compare website.
    ``(B) Posting of hospital specific all patient
    readmission rates.-- <> The
    Secretary shall make information on all patient
    readmission rates calculated under subparagraph (A)
    available on the CMS Hospital Compare website in a form
    and manner determined appropriate by the Secretary. The
    Secretary may also make other information determined
    appropriate by the Secretary available on such website.
    ``(C) Hospital submission of all patient data.--
    ``(i) Except as provided for in clause (ii),
    each specified hospital (as defined in
    subparagraph (D)(ii)) shall submit to the
    Secretary, in a form, manner and time specified by
    the Secretary, data and information determined
    necessary by the Secretary for the Secretary to
    calculate the all patient readmission rates
    described in subparagraph (A).
    ``(ii) Instead of a specified hospital
    submitting to the Secretary the data and
    information described in clause (i), such data and
    information may be submitted to the Secretary, on
    behalf of such a specified hospital, by a state or
    an entity determined appropriate by the Secretary.
    ``(D) Definitions.--For purposes of this paragraph:
    ``(i) The term `all patients' means patients
    who are treated on an inpatient basis and
    discharged from a specified hospital (as defined
    in clause (ii)).
    ``(ii) The term `specified hospital' means a
    subsection (d) hospital, hospitals described in
    clauses (i) through (v) of subsection (d)(1)(B)
    and, as determined feasible and appropriate by the
    Secretary, other hospitals not otherwise described
    in this subparagraph.''.

    (b) Quality Improvement.--Part S of title III of the Public Health
    Service Act, as amended by section 3015, is further amended by adding at
    the end the following:

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

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

    ``(b) Report to the Secretary.-- <> As
    determined appropriate by the Secretary, eligible hospitals and patient
    safety organizations

    [[Page 413]]

    working with those hospitals shall report to the Secretary on the
    processes employed by the hospital to improve readmission rates and the
    impact of such processes on readmission rates.''.

    SEC. 3026. <> COMMUNITY-BASED CARE
    TRANSITIONS PROGRAM.

    (a) In General.--The Secretary shall establish a Community-Based
    Care Transitions Program under which the Secretary provides funding to
    eligible entities that furnish improved care transition services to
    high-risk Medicare beneficiaries.
    (b) Definitions.--In this section:
    (1) Eligible entity.--The term ``eligible entity'' means the
    following:
    (A) A subsection (d) hospital (as defined in section
    1886(d)(1)(B) of the Social Security Act (42 U.S.C.
    1395ww(d)(1)(B))) identified by the Secretary as having
    a high readmission rate, such as under section 1886(q)
    of the Social Security Act, as added by section 3025.
    (B) An appropriate community-based organization that
    provides care transition services under this section
    across a continuum of care through arrangements with
    subsection (d) hospitals (as so defined) to furnish the
    services described in subsection (c)(2)(B)(i) and whose
    governing body includes sufficient representation of
    multiple health care stakeholders (including consumers).
    (2) High-risk medicare beneficiary.--The term ``high-risk
    Medicare beneficiary'' means a Medicare beneficiary who has
    attained a minimum hierarchical condition category score, as
    determined by the Secretary, based on a diagnosis of multiple
    chronic conditions or other risk factors associated with a
    hospital readmission or substandard transition into post-
    hospitalization care, which may include 1 or more of the
    following:
    (A) Cognitive impairment.
    (B) Depression.
    (C) A history of multiple readmissions.
    (D) Any other chronic disease or risk factor as
    determined by the Secretary.
    (3) Medicare beneficiary.--The term ``Medicare beneficiary''
    means an individual who is entitled to benefits under part A of
    title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.)
    and enrolled under part B of such title, but not enrolled under
    part C of such title.
    (4) Program.--The term ``program'' means the program
    conducted under this section.
    (5) Readmission.--The term ``readmission'' has the meaning
    given such term in section 1886(q)(5)(E) of the Social Security
    Act, as added by section 3025.
    (6) Secretary.--The term ``Secretary'' means the Secretary
    of Health and Human Services.

    (c) Requirements.--
    (1) Duration.--
    (A) In general.--The program shall be conducted for
    a 5-year period, beginning January 1, 2011.
    (B) Expansion.--
    <> The Secretary
    may expand the duration and the scope of the program, to
    the extent determined appropriate by the Secretary, if
    the Secretary determines (and the Chief Actuary of the
    Centers for Medicare & Medicaid Services, with respect
    to spending under this

    [[Page 414]]

    title, certifies) that such expansion would reduce
    spending under this title without reducing quality.
    (2) Application; participation.--
    (A) In general.--
    (i) Application.--An eligible entity seeking
    to participate in the program shall submit an
    application to the Secretary at such time, in such
    manner, and containing such information as the
    Secretary may require.
    (ii) Partnership.--If an eligible entity is a
    hospital, such hospital shall enter into a
    partnership with a community-based organization to
    participate in the program.
    (B) Intervention proposal.--Subject to subparagraph
    (C), an application submitted under subparagraph (A)(i)
    shall include a detailed proposal for at least 1 care
    transition intervention, which may include the
    following:
    (i) Initiating care transition services for a
    high-risk Medicare beneficiary not later than 24
    hours prior to the discharge of the beneficiary
    from the eligible entity.
    (ii) Arranging timely post-discharge follow-up
    services to the high-risk Medicare beneficiary to
    provide the beneficiary (and, as appropriate, the
    primary caregiver of the beneficiary) with
    information regarding responding to symptoms that
    may indicate additional health problems or a
    deteriorating condition.
    (iii) Providing the high-risk Medicare
    beneficiary (and, as appropriate, the primary
    caregiver of the beneficiary) with assistance to
    ensure productive and timely interactions between
    patients and post-acute and outpatient providers.
    (iv) Assessing and actively engaging with a
    high-risk Medicare beneficiary (and, as
    appropriate, the primary caregiver of the
    beneficiary) through the provision of self-
    management support and relevant information that
    is specific to the beneficiary's condition.
    (v) Conducting comprehensive medication review
    and management (including, if appropriate,
    counseling and self-management support).
    (C) Limitation.--A care transition intervention
    proposed under subparagraph (B) may not include payment
    for services required under the discharge planning
    process described in section 1861(ee) of the Social
    Security Act (42 U.S.C. 1395x(ee)).
    (3) Selection.--In selecting eligible entities to
    participate in the program, the Secretary shall give priority to
    eligible entities that--
    (A) participate in a program administered by the
    Administration on Aging to provide concurrent care
    transitions interventions with multiple hospitals and
    practitioners; or
    (B) provide services to medically underserved
    populations, small communities, and rural areas.

    (d) Implementation.--Notwithstanding any other provision of law, the
    Secretary may implement the provisions of this section by program
    instruction or otherwise.

    [[Page 415]]

    (e) Waiver Authority.--The Secretary may waive such requirements of
    titles XI and XVIII of the Social Security Act as may be necessary to
    carry out the program.
    (f) Funding.--For purposes of carrying out this section, the
    Secretary of Health and Human Services shall provide for the transfer,
    from the Federal Hospital Insurance Trust Fund under section 1817 of the
    Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary
    Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C.
    1395t), in such proportion as the Secretary determines appropriate, of
    $500,000,000, to the Centers for Medicare & Medicaid Services Program
    Management Account for the period of fiscal years 2011 through 2015.
    Amounts transferred under the preceding sentence shall remain available
    until expended.

    SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION.

    (a) In General.--Subsection (d)(3) of section 5007 of the Deficit
    Reduction Act of 2005 (Public Law 109-171) <> is amended by inserting ``(or September 30, 2011, in the case of
    a demonstration project in operation as of October 1, 2008)'' after
    ``December 31, 2009''.

    (b) Funding.--
    (1) In general.--Subsection (f)(1) of such section is
    amended by inserting ``and for fiscal year 2010, $1,600,000,''
    after ``$6,000,000,''.
    (2) Availability.--Subsection (f)(2) of such section is
    amended by striking ``2010'' and inserting ``2014 or until
    expended''.

    (c) Reports.--
    (1) Quality improvement and savings.--Subsection (e)(3) of
    such section is amended by striking ``December 1, 2008'' and
    inserting ``March 31, 2011''.
    (2) Final report.--Subsection (e)(4) of such section is
    amended by striking ``May 1, 2010'' and inserting ``March 31,
    2013''.

    Subtitle B--Improving Medicare for Patients and Providers

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

    SEC. 3101. INCREASE IN THE PHYSICIAN PAYMENT UPDATE.

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

    [[Page 416]]

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

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

    [[Page 417]]

    types of office expenses are determined
    in local markets instead of national
    markets.
    ``(III) The weights assigned to each
    of the categories within the practice
    expense geographic adjustment described
    in subparagraph (A)(i).
    ``(v) <> Revision for 2012
    and subsequent years.--As a result of the analysis
    described in clause (iv), the Secretary shall, not
    later than January 1, 2012, make appropriate
    adjustments to the practice expense geographic
    adjustment described in subparagraph (A)(i) to
    ensure accurate geographic adjustments across fee
    schedule areas, including--
    ``(I) basing the office rents
    component and its weight on office
    expenses that vary among fee schedule
    areas; and
    ``(II) considering a representative
    range of professional and non-
    professional personnel employed in a
    medical office based on the use of the
    American Community Survey data or other
    reliable data for wage adjustments.
    Such adjustments shall be made without regard to
    adjustments made pursuant to clauses (i) and (ii)
    and shall be made in a budget neutral manner.''.

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

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

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

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

    SEC. 3105. EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social Security
    Act (42 U.S.C. 1395m(l)(13)(A)) is amended--
    (1) in the matter preceding clause (i)--
    (A) by striking ``2007, and for'' and inserting
    ``2007, for''; and
    (B) by striking ``2010'' and inserting ``2010, and
    for such services furnished on or after April 1, 2010,
    and before January 1, 2011,''; and
    (2) in each of clauses (i) and (ii), by inserting ``, and on
    or after April 1, 2010, and before January 1, 2011'' after
    ``January 1, 2010'' each place it appears.

    (b) Air Ambulance.--Section 146(b)(1) of the Medicare Improvements
    for Patients and Providers Act of 2008 <> (Public Law

    [[Page 418]]

    110-275) is amended by striking ``December 31, 2009'' and inserting
    ``December 31, 2009, and during the period beginning on April 1, 2010,
    and ending on January 1, 2011''.

    (c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social
    Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking ``2010''
    and inserting ``2010, and on or after April 1, 2010, and before January
    1, 2011''.

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

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

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

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

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

    (a) Ordering Post-Hospital Extended Care Services.--
    (1) In general.--Section 1814(a)(2) of the Social Security
    Act (42 U.S.C. 1395f(a)(2)), in the matter preceding
    subparagraph (A), is amended by striking ``or clinical nurse
    specialist'' and inserting ``, a clinical nurse specialist, or a
    physician assistant (as those terms are defined in section
    1861(aa)(5))'' after ``nurse practitioner''.
    (2) Conforming amendment.--Section 1814(a) of the Social
    Security Act (42 U.S.C. 1395f(a)) is amended, in the second
    sentence, by striking ``or clinical nurse specialist'' and
    inserting ``clinical nurse specialist, or physician assistant''
    after ``nurse practitioner,''.

    (b) <> Effective Date.--The amendments
    made by this section shall apply to items and services furnished on or
    after January 1, 2011.

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

    (a) In General.--Section 1834(a)(20) of the Social Security Act (42
    U.S.C. 1395m(a)(20)), as added by section 154(b)(1)(A) of the Medicare
    Improvements for Patients and Providers Act of 2008 (Public Law 100-
    275), is amended--
    (1) in subparagraph (F)(i)--
    (A) by inserting ``and subparagraph (G)'' after
    ``clause (ii)''; and
    (B) by inserting ``, except that the Secretary shall
    not require a pharmacy to have submitted to the
    Secretary

    [[Page 419]]

    such evidence of accreditation prior to January 1,
    2011'' before the semicolon at the end; and
    (2) by adding at the end the following new subparagraph:
    ``(G) Application of accreditation requirement to
    certain pharmacies.--
    ``(i) In general.--With respect to items and
    services furnished on or after January 1, 2011, in
    implementing quality standards under this
    paragraph--
    ``(I) subject to subclause (II), in
    applying such standards and the
    accreditation requirement of
    subparagraph (F)(i) with respect to
    pharmacies described in clause (ii)
    furnishing such items and services, such
    standards and accreditation requirement
    shall not apply to such pharmacies; and
    ``(II) the Secretary may apply to
    such pharmacies an alternative
    accreditation requirement established by
    the Secretary if the Secretary
    determines such alternative
    accreditation requirement is more
    appropriate for such pharmacies.
    ``(ii) <> Pharmacies
    described.--A pharmacy described in this clause is
    a pharmacy that meets each of the following
    criteria:
    ``(I) The total billings by the
    pharmacy for such items and services
    under this title are less than 5 percent
    of total pharmacy sales, as determined
    based on the average total pharmacy
    sales for the previous 3 calendar years,
    3 fiscal years, or other yearly period
    specified by the Secretary.
    ``(II) The pharmacy has been
    enrolled under section 1866(j) as a
    supplier of durable medical equipment,
    prosthetics, orthotics, and supplies,
    has been issued (which may include the
    renewal of) a provider number for at
    least 5 years, and for which a final
    adverse action (as defined in section
    424.57(a) of title 42, Code of Federal
    Regulations) has not been imposed in the
    past 5 years.
    ``(III) The pharmacy submits to the
    Secretary an attestation, in a form and
    manner, and at a time, specified by the
    Secretary, that the pharmacy meets the
    criteria described in subclauses (I) and
    (II). Such attestation shall be subject
    to section 1001 of title 18, United
    States Code.
    ``(IV) The pharmacy agrees to submit
    materials as requested by the Secretary,
    or during the course of an audit
    conducted on a random sample of
    pharmacies selected annually, to verify
    that the pharmacy meets the criteria
    described in subclauses (I) and (II).
    Materials submitted under the preceding
    sentence shall include a certification
    by an accountant on behalf of the
    pharmacy or the submission of tax
    returns filed by the pharmacy during the
    relevant periods, as requested by the
    Secretary.''.

    (b) <> Administration.--Notwithstanding
    any other provision of law, the Secretary may implement the amendments
    made by subsection (a) by program instruction or otherwise.

    [[Page 420]]

    (c) <> Rule of Construction.--Nothing in
    the provisions of or amendments made by this section shall be construed
    as affecting the application of an accreditation requirement for
    pharmacies to qualify for bidding in a competitive acquisition area
    under section 1847 of the Social Security Act (42 U.S.C. 1395w-3).

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

    (a) In General.--
    (1) In general.--Section 1837 of the Social Security Act (42
    U.S.C. 1395p) is amended by adding at the end the following new
    subsection:

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

    (b) Waiver of Increase of Premium.--Section 1839(b) of the Social
    Security Act (42 U.S.C. 1395r(b)) is amended by striking ``section
    1837(i)(4)'' and inserting ``subsection (i)(4) or (l) of section 1837''.

    [[Page 421]]

    SEC. 3111. PAYMENT FOR BONE DENSITY TESTS.

    (a) Payment.--
    (1) In general.--Section 1848 of the Social Security Act (42
    U.S.C. 1395w-4) is amended--
    (A) in subsection (b)--
    (i) in paragraph (4)(B), by inserting ``, and
    for 2010 and 2011, dual-energy x-ray
    absorptiometry services (as described in paragraph
    (6))'' before the period at the end; and
    (ii) by adding at the end the following new
    paragraph:
    ``(6) Treatment of bone mass scans.--For dual-energy x-ray
    absorptiometry services (identified in 2006 by HCPCS codes 76075
    and 76077 (and any succeeding codes)) furnished during 2010 and
    2011, instead of the payment amount that would otherwise be
    determined under this section for such years, the payment amount
    shall be equal to 70 percent of the product of--
    ``(A) the relative value for the service (as
    determined in subsection (c)(2)) for 2006;
    ``(B) the conversion factor (established under
    subsection (d)) for 2006; and
    ``(C) the geographic adjustment factor (established
    under subsection (e)(2)) for the service for the fee
    schedule area for 2010 and 2011, respectively.''; and
    (B) in subsection (c)(2)(B)(iv)--
    (i) in subclause (II), by striking ``and'' at
    the end;
    (ii) in subclause (III), by striking the
    period at the end and inserting ``; and''; and
    (iii) by adding at the end the following new
    subclause:
    ``(IV) subsection (b)(6) shall not
    be taken into account in applying clause
    (ii)(II) for 2010 or 2011.''.
    (2) <> Implementation.--
    Notwithstanding any other provision of law, the Secretary may
    implement the amendments made by paragraph (1) by program
    instruction or otherwise.

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

    SEC. 3112. REVISION TO THE MEDICARE IMPROVEMENT FUND.

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

    [[Page 422]]

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

    (a) Demonstration Project.--
    (1) In general.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall conduct
    a demonstration project under part B title XVIII of the Social
    Security Act under which separate payments are made under such
    part for complex diagnostic laboratory tests provided to
    individuals under such part. Under the demonstration project,
    the Secretary shall establish appropriate payment rates for such
    tests.
    (2) Covered complex diagnostic laboratory test defined.--In
    this section, the term ``complex diagnostic laboratory test''
    means a diagnostic laboratory test--
    (A) that is an analysis of gene protein expression,
    topographic genotyping, or a cancer chemotherapy
    sensitivity assay;
    (B) that is determined by the Secretary to be a
    laboratory test for which there is not an alternative
    test having equivalent performance characteristics;
    (C) which is billed using a Health Care Procedure
    Coding System (HCPCS) code other than a not otherwise
    classified code under such Coding System;
    (D) which is approved or cleared by the Food and
    Drug Administration or is covered under title XVIII of
    the Social Security Act; and
    (E) is described in section 1861(s)(3) of the Social
    Security Act (42 U.S.C. 1395x(s)(3)).
    (3) Separate payment defined.--In this section, the term
    ``separate payment'' means direct payment to a laboratory
    (including a hospital-based or independent laboratory) that
    performs a complex diagnostic laboratory test with respect to a
    specimen collected from an individual during a period in which
    the individual is a patient of a hospital if the test is
    performed after such period of hospitalization and if separate
    payment would not otherwise be made under title XVIII of the
    Social Security Act by reason of sections 1862(a)(14) and
    1866(a)(1)(H)(i) of the such Act (42 U.S.C. 1395y(a)(14); 42
    U.S.C. 1395cc(a)(1)(H)(i)).

    (b) Duration.--Subject to subsection (c)(2), the Secretary shall
    conduct the demonstration project under this section for the 2-year
    period beginning on July 1, 2011.
    (c) Payments and Limitation.--Payments under the demonstration
    project under this section shall--
    (1) be made from the Federal Supplemental Medical Insurance
    Trust Fund under section 1841 of the Social Security Act (42
    U.S.C. 1395t); and
    (2) may not exceed $100,000,000.

    (d) Report.--Not later than 2 years after the completion of the
    demonstration project under this section, the Secretary shall submit to
    Congress a report on the project. Such report shall include--
    (1) an assessment of the impact of the demonstration project
    on access to care, quality of care, health outcomes, and
    expenditures under title XVIII of the Social Security Act
    (including any savings under such title); and

    [[Page 423]]

    (2) such recommendations as the Secretary determines
    appropriate.

    (e) Implementation Funding.--For purposes of administering this
    section (including preparing and submitting the report under subsection
    (d)), the Secretary shall provide for the transfer, from the Federal
    Supplemental Medical Insurance Trust Fund under section 1841 of the
    Social Security Act (42 U.S.C. 1395t), to the Centers for Medicare &
    Medicaid Services Program Management Account, of $5,000,000. Amounts
    transferred under the preceding sentence shall remain available until
    expended.

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

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

    PART II--RURAL PROTECTIONS

    SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

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

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

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

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

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

    (a) One-year Extension.--Section 410A of the Medicare Prescription
    Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173;
    117 Stat. 2272) is amended by adding at the end the following new
    subsection:
    ``(g) One-Year Extension of Demonstration Program.--
    ``(1) In general.--Subject to the succeeding provisions of
    this subsection, the Secretary shall conduct the demonstration

    [[Page 424]]

    program under this section for an additional 1-year period (in
    this section referred to as the `1-year extension period') that
    begins on the date immediately following the last day of the
    initial 5-year period under subsection (a)(5).
    ``(2) Expansion of demonstration states.--Notwithstanding
    subsection (a)(2), during the 1-year extension period, the
    Secretary shall expand the number of States with low population
    densities determined by the Secretary under such subsection to
    20. In determining which States to include in such expansion,
    the Secretary shall use the same criteria and data that the
    Secretary used to determine the States under such subsection for
    purposes of the initial 5-year period.
    ``(3) Increase in maximum number of hospitals participating
    in the demonstration program.--Notwithstanding subsection
    (a)(4), during the 1-year extension period, not more than 30
    rural community hospitals may participate in the demonstration
    program under this section.
    ``(4) No affect on hospitals in demonstration program on
    date of enactment.--In the case of a rural community hospital
    that is participating in the demonstration program under this
    section as of the last day of the initial 5-year period, the
    Secretary shall provide for the continued participation of such
    rural community hospital in the demonstration program during the
    1-year extension period unless the rural community hospital
    makes an election, in such form and manner as the Secretary may
    specify, to discontinue such participation.''.

    (b) Conforming Amendments.--Subsection (a)(5) of section 410A of the
    Medicare Prescription Drug, Improvement, and Modernization Act of 2003
    (Public Law 108-173; 117 Stat. 2272) is amended by inserting ``(in this
    section referred to as the `initial 5-year period') and, as provided in
    subsection (g), for the 1-year extension period'' after ``5-year
    period''.
    (c) Technical Amendments.--
    (1) Subsection (b) of section 410A of the Medicare
    Prescription Drug, Improvement, and Modernization Act of 2003
    (Public Law 108-173; 117 Stat. 2272) is amended--
    (A) in paragraph (1)(B)(ii), by striking ``2)'' and
    inserting ``2))''; and
    (B) in paragraph (2), by inserting ``cost'' before
    ``reporting period'' the first place such term appears
    in each of subparagraphs (A) and (B).
    (2) Subsection (f)(1) of section 410A of the Medicare
    Prescription Drug, Improvement, and Modernization Act of 2003
    (Public Law 108-173; 117 Stat. 2272) is amended--
    (A) in subparagraph (A)(ii), by striking ``paragraph
    (2)'' and inserting ``subparagraph (B)''; and
    (B) in subparagraph (B), by striking ``paragraph
    (1)(B)'' and inserting ``subparagraph (A)(ii)''.

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

    (a) Extension of Payment Methodology.--Section 1886(d)(5)(G) of the
    Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended--
    (1) in clause (i), by striking ``October 1, 2011'' and
    inserting ``October 1, 2012''; and

    [[Page 425]]

    (2) in clause (ii)(II), by striking ``October 1, 2011'' and
    inserting ``October 1, 2012''.

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

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

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

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

    (a) Removal of Limitation on Number of Eligible Counties Selected.--
    Subsection (d)(3) of section 123 of the Medicare Improvements for
    Patients and Providers Act of 2008 (42 U.S.C. 1395i-4 note) is amended
    by striking ``not more than 6''.
    (b) Removal of References to Rural Health Clinic Services and
    Inclusion of Physicians' Services in Scope of Demonstration Project.--
    Such section 123 is amended--

    [[Page 426]]

    (1) in subsection (d)(4)(B)(i)(3), by striking subclause
    (III); and
    (2) in subsection (j)--
    (A) in paragraph (8), by striking subparagraph (B)
    and inserting the following:
    ``(B) Physicians' services (as defined in section
    1861(q) of the Social Security Act (42 U.S.C.
    1395x(q)).'';
    (B) by striking paragraph (9); and
    (C) by redesignating paragraph (10) as paragraph
    (9).

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

    (a) Study.--The Medicare Payment Advisory Commission shall conduct a
    study on the adequacy of payments for items and services furnished by
    providers of services and suppliers in rural areas under the Medicare
    program under title XVIII of the Social Security Act (42 U.S.C. 1395 et
    seq.). Such study shall include an analysis of--
    (1) any adjustments in payments to providers of services and
    suppliers that furnish items and services in rural areas;
    (2) access by Medicare beneficiaries to items and services
    in rural areas;
    (3) the adequacy of payments to providers of services and
    suppliers that furnish items and services in rural areas; and
    (4) the quality of care furnished in rural areas.

    (b) Report.--Not later than January 1, 2011, the Medicare Payment
    Advisory Commission shall submit to Congress a report containing the
    results of the study conducted under subsection (a). Such report shall
    include recommendations on appropriate modifications to any adjustments
    in payments to providers of services and suppliers that furnish items
    and services in rural areas, together with recommendations for such
    legislation and administrative action as the Medicare Payment Advisory
    Commission determines appropriate.

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

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

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

    (a) Authorization.--Section 1820(j) of the Social Security Act (42
    U.S.C. 1395i-4(j)) is amended--
    (1) by striking ``2010, and for'' and inserting ``2010,
    for''; and
    (2) by inserting ``and for making grants to all States under
    subsection (g), such sums as may be necessary in each of fiscal
    years 2011 and 2012, to remain available until expended'' before
    the period at the end.

    (b) Use of Funds.--Section 1820(g)(3) of the Social Security Act (42
    U.S.C. 1395i-4(g)(3)) is amended--

    [[Page 427]]

    (1) in subparagraph (A), by inserting ``and to assist such
    hospitals in participating in delivery system reforms under the
    provisions of and amendments made by the Patient Protection and
    Affordable Care Act, such as value-based purchasing programs,
    accountable care organizations under section 1899, the National
    pilot program on payment bundling under section 1866D, and other
    delivery system reform programs determined appropriate by the
    Secretary'' before the period at the end; and
    (2) in subparagraph (E)--
    (A) by striking ``, and to offset'' and inserting
    ``, to offset''; and
    (B) by inserting ``and to participate in delivery
    system reforms under the provisions of and amendments
    made by the Patient Protection and Affordable Care Act,
    such as value-based purchasing programs, accountable
    care organizations under section 1899, the National
    pilot program on payment bundling under section 1866D,
    and other delivery system reform programs determined
    appropriate by the Secretary'' before the period at the
    end.

    (c) <> Effective Date.--The amendments
    made by this section shall apply to grants made on or after January 1,
    2010.

    PART III--IMPROVING PAYMENT ACCURACY

    SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

    (a) Rebasing Home Health Prospective Payment Amount.--
    (1) In general.--Section 1895(b)(3)(A) of the Social
    Security Act (42 U.S.C. 1395fff(b)(3)(A)) is amended--
    (A) in clause (i)(III), by striking ``For periods''
    and inserting ``Subject to clause (iii), for periods'';
    and
    (B) by adding at the end the following new clause:
    ``(iii) Adjustment for 2013 and subsequent
    years.--
    ``(I) In general.--Subject to
    subclause (II), for 2013 and subsequent
    years, the amount (or amounts) that
    would otherwise be applicable under
    clause (i)(III) shall be adjusted by a
    percentage determined appropriate by the
    Secretary to reflect such factors as
    changes in the number of visits in an
    episode, the mix of services in an
    episode, the level of intensity of
    services in an episode, the average cost
    of providing care per episode, and other
    factors that the Secretary considers to
    be relevant. In conducting the analysis
    under the preceding sentence, the
    Secretary may consider differences
    between hospital-based and freestanding
    agencies, between for-profit and
    nonprofit agencies, and between the
    resource costs of urban and rural
    agencies. Such adjustment shall be made
    before the update under subparagraph (B)
    is applied for the year.
    ``(II) Transition.--The Secretary
    shall provide for a 4-year phase-in (in
    equal increments) of the adjustment
    under subclause (I), with such
    adjustment being fully implemented for
    2016. During each year of such phase-in,
    the amount of any

    [[Page 428]]

    adjustment under subclause (I) for the
    year may not exceed 3.5 percent of the
    amount (or amounts) applicable under
    clause (i)(III) as of the date of
    enactment of the Patient Protection and
    Affordable Care Act.''.
    (2) MedPAC study and report.--
    (A) Study.--The Medicare Payment Advisory Commission
    shall conduct a study on the implementation of the
    amendments made by paragraph (1). Such study shall
    include an analysis of the impact of such amendments
    on--
    (i) access to care;
    (ii) quality outcomes;
    (iii) the number of home health agencies; and
    (iv) rural agencies, urban agencies, for-
    profit agencies, and nonprofit agencies.
    (B) Report.--Not later than January 1, 2015, the
    Medicare Payment Advisory Commission shall submit to
    Congress a report on the study conducted under
    subparagraph (A), together with recommendations for such
    legislation and administrative action as the Commission
    determines appropriate.

    (b) Program-specific Outlier Cap.--Section 1895(b) of the Social
    Security Act (42 U.S.C. 1395fff(b)) is amended--
    (1) in paragraph (3)(C), by striking ``the aggregate'' and
    all that follows through the period at the end and inserting ``5
    percent of the total payments estimated to be made based on the
    prospective payment system under this subsection for the
    period.''; and
    (2) in paragraph (5)--
    (A) by striking ``Outliers.--The Secretary'' and
    inserting the following: ``Outliers.--
    ``(A) In general.--Subject to subparagraph (B), the
    Secretary'';
    (B) in subparagraph (A), as added by subparagraph
    (A), by striking ``5 percent'' and inserting ``2.5
    percent''; and
    (C) by adding at the end the following new
    subparagraph:
    ``(B) Program specific outlier cap.--The estimated
    total amount of additional payments or payment
    adjustments made under subparagraph (A) with respect to
    a home health agency for a year (beginning with 2011)
    may not exceed an amount equal to 10 percent of the
    estimated total amount of payments made under this
    section (without regard to this paragraph) with respect
    to the home health agency for the year.''.

    (c) Application of the Medicare Rural Home Health Add-on Policy.--
    Section 421 of the Medicare Prescription Drug, Improvement, and
    Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2283), as
    amended by section 5201(b) of the Deficit Reduction Act of 2005 (Public
    Law 109-171; 120 Stat. 46), <>  is amended--
    (1) in the section heading, by striking ``one-year'' and
    inserting ``temporary''; and
    (2) in subsection (a)--

    [[Page 429]]

    (A) by striking ``, and episodes'' and inserting ``,
    episodes'';
    (B) by inserting ``and episodes and visits ending on
    or after April 1, 2010, and before January 1, 2016,''
    after ``January 1, 2007,''; and
    (C) by inserting ``(or, in the case of episodes and
    visits ending on or after April 1, 2010, and before
    January 1, 2016, 3 percent)'' before the period at the
    end.

    (d) <> Study and Report on the
    Development of Home Health Payment Reforms in Order To Ensure Access to
    Care and Quality Services.--
    (1) In general.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall conduct
    a study to evaluate the costs and quality of care among
    efficient home health agencies relative to other such agencies
    in providing ongoing access to care and in treating Medicare
    beneficiaries with varying severity levels of illness. Such
    study shall include an analysis of the following:
    (A) Methods to revise the home health prospective
    payment system under section 1895 of the Social Security
    Act (42 U.S.C. 1395fff) to more accurately account for
    the costs related to patient severity of illness or to
    improving beneficiary access to care, including--
    (i) payment adjustments for services that may
    be under- or over-valued;
    (ii) necessary changes to reflect the resource
    use relative to providing home health services to
    low-income Medicare beneficiaries or Medicare
    beneficiaries living in medically underserved
    areas;
    (iii) ways the outlier payment may be improved
    to more accurately reflect the cost of treating
    Medicare beneficiaries with high severity levels
    of illness;
    (iv) the role of quality of care incentives
    and penalties in driving provider and patient
    behavior;
    (v) improvements in the application of a wage
    index; and
    (vi) other areas determined appropriate by the
    Secretary.
    (B) The validity and reliability of responses on the
    OASIS instrument with particular emphasis on questions
    that relate to higher payment under the home health
    prospective payment system and higher outcome scores
    under Home Care Compare.
    (C) Additional research or payment revisions under
    the home health prospective payment system that may be
    necessary to set the payment rates for home health
    services based on costs of high-quality and efficient
    home health agencies or to improve Medicare beneficiary
    access to care.
    (D) A timetable for implementation of any
    appropriate changes based on the analysis of the matters
    described in subparagraphs (A), (B), and (C).
    (E) Other areas determined appropriate by the
    Secretary.
    (2) Considerations.--In conducting the study under paragraph
    (1), the Secretary shall consider whether certain factors

    [[Page 430]]

    should be used to measure patient severity of illness and access
    to care, such as--
    (A) population density and relative patient access
    to care;
    (B) variations in service costs for providing care
    to individuals who are dually eligible under the
    Medicare and Medicaid programs;
    (C) the presence of severe or chronic diseases, as
    evidenced by multiple, discontinuous home health
    episodes;
    (D) poverty status, as evidenced by the receipt of
    Supplemental Security Income under title XVI of the
    Social Security Act;
    (E) the absence of caregivers;
    (F) language barriers;
    (G) atypical transportation costs;
    (H) security costs; and
    (I) other factors determined appropriate by the
    Secretary.
    (3) Report.--Not later than March 1, 2011, the Secretary
    shall submit to Congress a report on the study conducted under
    paragraph (1), together with recommendations for such
    legislation and administrative action as the Secretary
    determines appropriate.
    (4) Consultations.--In conducting the study under paragraph
    (1) and preparing the report under paragraph (3), the Secretary
    shall consult with--
    (A) stakeholders representing home health agencies;
    (B) groups representing Medicare beneficiaries;
    (C) the Medicare Payment Advisory Commission;
    (D) the Inspector General of the Department of
    Health and Human Services; and
    (E) the Comptroller General of the United States.

    SEC. 3132. HOSPICE REFORM.

    (a) Hospice Care Payment Reforms.--
    (1) In general.--Section 1814(i) of the Social Security Act
    (42 U.S.C. 1395f(i)), as amended by section 3004(c), is
    amended--
    (A) by redesignating paragraph (6) as paragraph (7);
    and
    (B) by inserting after paragraph (5) the following
    new paragraph:
    ``(6)(A) <> The
    Secretary shall collect additional data and information as the
    Secretary determines appropriate to revise payments for hospice
    care under this subsection pursuant to subparagraph (D) and for
    other purposes as determined appropriate by the
    Secretary. <> The Secretary shall begin to
    collect such data by not later than January 1, 2011.
    ``(B) The additional data and information to be collected
    under subparagraph (A) may include data and information on--
    ``(i) charges and payments;
    ``(ii) the number of days of hospice care which are
    attributable to individuals who are entitled to, or
    enrolled for, benefits under part A; and
    ``(iii) with respect to each type of service
    included in hospice care--

    [[Page 431]]

    ``(I) the number of days of hospice care
    attributable to the type of service;
    ``(II) the cost of the type of service; and
    ``(III) the amount of payment for the type of
    service;
    ``(iv) charitable contributions and other revenue of
    the hospice program;
    ``(v) the number of hospice visits;
    ``(vi) the type of practitioner providing the visit;
    and
    ``(vii) the length of the visit and other basic
    information with respect to the visit.
    ``(C) The Secretary may collect the additional data and
    information under subparagraph (A) on cost reports, claims, or
    other mechanisms as the Secretary determines to be appropriate.
    ``(D)(i) <> Notwithstanding the
    preceding paragraphs of this subsection, not earlier than
    October 1, 2013, the Secretary shall, by regulation, implement
    revisions to the methodology for determining the payment rates
    for routine home care and other services included in hospice
    care under this part, as the Secretary determines to be
    appropriate. Such revisions may be based on an analysis of data
    and information collected under subparagraph (A). Such revisions
    may include adjustments to per diem payments that reflect
    changes in resource intensity in providing such care and
    services during the course of the entire episode of hospice
    care.
    ``(ii) Revisions in payment implemented pursuant to clause
    (i) shall result in the same estimated amount of aggregate
    expenditures under this title for hospice care furnished in the
    fiscal year in which such revisions in payment are implemented
    as would have been made under this title for such care in such
    fiscal year if such revisions had not been implemented.
    ``(E) The Secretary shall consult with hospice programs and
    the Medicare Payment Advisory Commission regarding the
    additional data and information to be collected under
    subparagraph (A) and the payment revisions under subparagraph
    (D).''.
    (2) Conforming amendments.--Section 1814(i)(1)(C) of the
    Social Security Act (42 U.S.C. 1395f(i)(1)(C)) is amended--
    (A) in clause (ii)--
    (i) in the matter preceding subclause (I), by
    inserting ``(before the first fiscal year in which
    the payment revisions described in paragraph
    (6)(D) are implemented)'' after ``subsequent
    fiscal year''; and
    (ii) in subclause (VII), by inserting
    ``(before the first fiscal year in which the
    payment revisions described in paragraph (6)(D)
    are implemented), subject to clause (iv),'' after
    ``subsequent fiscal year''; and
    (B) by adding at the end the following new clause:
    ``(iii) With respect to routine home care and
    other services included in hospice care furnished
    during fiscal years subsequent to the first fiscal
    year in which payment revisions described in
    paragraph (6)(D) are implemented, the payment
    rates for such care and services shall be the
    payment rates in effect under this clause during
    the preceding fiscal year increased by, subject to
    clause (iv), the market basket percentage increase

    [[Page 432]]

    (as defined in section 1886(b)(3)(B)(iii)) for the
    fiscal year.''.

    (b) Adoption of MedPAC Hospice Program Eligibility Recertification
    Recommendations.--Section 1814(a)(7) of the Social Security Act (42
    U.S.C. 1395f(a)(7)) is amended--
    (1) in subparagraph (B), by striking ``and'' at the end; and
    (2) by adding at the end the following new subparagraph:
    ``(D) on and after January 1, 2011--
    ``(i) a hospice physician or nurse
    practitioner has a face-to-face encounter with the
    individual to determine continued eligibility of
    the individual for hospice care prior to the
    180th-day recertification and each subsequent
    recertification under subparagraph (A)(ii) and
    attests that such visit took place (in accordance
    with procedures established by the Secretary); and
    ``(ii) in the case of hospice care provided an
    individual for more than 180 days by a hospice
    program for which the number of such cases for
    such program comprises more than a percent
    (specified by the Secretary) of the total number
    of such cases for all programs under this title,
    the hospice care provided to such individual is
    medically reviewed (in accordance with procedures
    established by the Secretary); and''.

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

    Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as
    amended by sections 3001, 3008, and 3025, is amended--
    (1) in subsection (d)(5)(F)(i), by striking ``For'' and
    inserting ``Subject to subsection (r), for''; and
    (2) by adding at the end the following new subsection:

    ``(r) Adjustments to Medicare DSH Payments.--
    ``(1) Empirically justified dsh payments.--For fiscal year
    2015 and each subsequent fiscal year, instead of the amount of
    disproportionate share hospital payment that would otherwise be
    made under subsection (d)(5)(F) to a subsection (d) hospital for
    the fiscal year, the Secretary shall pay to the subsection (d)
    hospital 25 percent of such amount (which represents the
    empirically justified amount for such payment, as determined by
    the Medicare Payment Advisory Commission in its March 2007
    Report to the Congress).
    ``(2) Additional payment.--In addition to the payment made
    to a subsection (d) hospital under paragraph (1), for fiscal
    year 2015 and each subsequent fiscal year, the Secretary shall
    pay to such subsection (d) hospitals an additional amount equal
    to the product of the following factors:
    ``(A) Factor one.--A factor equal to the difference
    between--
    ``(i) the aggregate amount of payments that
    would be made to subsection (d) hospitals under
    subsection (d)(5)(F) if this subsection did not
    apply for such fiscal year (as estimated by the
    Secretary); and
    ``(ii) the aggregate amount of payments that
    are made to subsection (d) hospitals under
    paragraph (1) for such fiscal year (as so
    estimated).
    ``(B) Factor two.--

    [[Page 433]]

    ``(i) Fiscal years 2015, 2016, and 2017.--For
    each of fiscal years 2015, 2016, and 2017, a
    factor equal to 1 minus the percent change
    (divided by 100) in the percent of individuals
    under the age of 65 who are uninsured, as
    determined by comparing the percent of such
    individuals--
    ``(I) who are uninsured in 2012, the
    last year before coverage expansion
    under the Patient Protection and
    Affordable Care Act (as calculated by
    the Secretary based on the most recent
    estimates available from the Director of
    the Congressional Budget Office before a
    vote in either House on such Act that,
    if determined in the affirmative, would
    clear such Act for enrollment); and
    ``(II) who are uninsured in the most
    recent period for which data is
    available (as so calculated).
    ``(ii) 2018 and subsequent years.--For fiscal
    year 2018 and each subsequent fiscal year, a
    factor equal to 1 minus the percent change
    (divided by 100) in the percent of individuals who
    are uninsured, as determined by comparing the
    percent of individuals--
    ``(I) who are uninsured in 2012 (as
    estimated by the Secretary, based on
    data from the Census Bureau or other
    sources the Secretary determines
    appropriate, and certified by the Chief
    Actuary of the Centers for Medicare &
    Medicaid Services); and
    ``(II) who are uninsured in the most
    recent period for which data is
    available (as so estimated and
    certified).
    ``(C) Factor three.--A factor equal to the percent,
    for each subsection (d) hospital, that represents the
    quotient of--
    ``(i) the amount of uncompensated care for
    such hospital for a period selected by the
    Secretary (as estimated by the Secretary, based on
    appropriate data (including, in the case where the
    Secretary determines that alternative data is
    available which is a better proxy for the costs of
    subsection (d) hospitals for treating the
    uninsured, the use of such alternative data)); and
    ``(ii) the aggregate amount of uncompensated
    care for all subsection (d) hospitals that receive
    a payment under this subsection for such period
    (as so estimated, based on such data).
    ``(3) Limitations on review.--There shall be no
    administrative or judicial review under section 1869, section
    1878, or otherwise of the following:
    ``(A) Any estimate of the Secretary for purposes of
    determining the factors described in paragraph (2).
    ``(B) Any period selected by the Secretary for such
    purposes.''.

    [[Page 434]]

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

    (a) In General.--Section 1848(c)(2) of the Social Security Act (42
    U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new
    subparagraphs:
    ``(K) Potentially misvalued codes.--
    ``(i) In general.--The Secretary shall--
    ``(I) periodically identify services
    as being potentially misvalued using
    criteria specified in clause (ii); and
    ``(II) review and make appropriate
    adjustments to the relative values
    established under this paragraph for
    services identified as being potentially
    misvalued under subclause (I).
    ``(ii) Identification of potentially misvalued
    codes.--For purposes of identifying potentially
    misvalued services pursuant to clause (i)(I), the
    Secretary shall examine (as the Secretary
    determines to be appropriate) codes (and families
    of codes as appropriate) for which there has been
    the fastest growth; codes (and families of codes
    as appropriate) that have experienced substantial
    changes in practice expenses; codes for new
    technologies or services within an appropriate
    period (such as 3 years) after the relative values
    are initially established for such codes; multiple
    codes that are frequently billed in conjunction
    with furnishing a single service; codes with low
    relative values, particularly those that are often
    billed multiple times for a single treatment;
    codes which have not been subject to review since
    the implementation of the RBRVS (the so-called
    `Harvard-valued codes'); and such other codes
    determined to be appropriate by the Secretary.
    ``(iii) Review and adjustments.--
    ``(I) The Secretary may use existing
    processes to receive recommendations on
    the review and appropriate adjustment of
    potentially misvalued services described
    in clause (i)(II).
    ``(II) The Secretary may conduct
    surveys, other data collection
    activities, studies, or other analyses
    as the Secretary determines to be
    appropriate to facilitate the review and
    appropriate adjustment described in
    clause (i)(II).
    ``(III) The Secretary may use
    analytic contractors to identify and
    analyze services identified under clause
    (i)(I), conduct surveys or collect data,
    and make recommendations on the review
    and appropriate adjustment of services
    described in clause (i)(II).
    ``(IV) The Secretary may coordinate
    the review and appropriate adjustment
    described in clause (i)(II) with the
    periodic review described in
    subparagraph (B).
    ``(V) As part of the review and
    adjustment described in clause (i)(II),
    including with respect to codes with low
    relative values described in clause
    (ii), the Secretary may make appropriate
    coding revisions (including using
    existing processes

    [[Page 435]]

    for consideration of coding changes)
    which may include consolidation of
    individual services into bundled codes
    for payment under the fee schedule under
    subsection (b).
    ``(VI) The provisions of
    subparagraph (B)(ii)(II) shall apply to
    adjustments to relative value units made
    pursuant to this subparagraph in the
    same manner as such provisions apply to
    adjustments under subparagraph
    (B)(ii)(II).
    ``(L) Validating relative value units.--
    ``(i) In general.--The Secretary shall
    establish a process to validate relative value
    units under the fee schedule under subsection (b).
    ``(ii) Components and elements of work.--The
    process described in clause (i) may include
    validation of work elements (such as time, mental
    effort and professional judgment, technical skill
    and physical effort, and stress due to risk)
    involved with furnishing a service and may include
    validation of the pre-, post-, and intra-service
    components of work.
    ``(iii) Scope of codes.--The validation of
    work relative value units shall include a sampling
    of codes for services that is the same as the
    codes listed under subparagraph (K)(ii).
    ``(iv) Methods.--The Secretary may conduct the
    validation under this subparagraph using methods
    described in subclauses (I) through (V) of
    subparagraph (K)(iii) as the Secretary determines
    to be appropriate.
    ``(v) Adjustments.--The Secretary shall make
    appropriate adjustments to the work relative value
    units under the fee schedule under subsection (b).
    The provisions of subparagraph (B)(ii)(II) shall
    apply to adjustments to relative value units made
    pursuant to this subparagraph in the same manner
    as such provisions apply to adjustments under
    subparagraph (B)(ii)(II).''.

    (b) <> Implementation.--
    (1) Administration.--
    (A) Chapter 35 of title 44, United States Code and
    the provisions of the Federal Advisory Committee Act (5
    U.S.C. App.) shall not apply to this section or the
    amendment made by this section.
    (B) Notwithstanding any other provision of law, the
    Secretary may implement subparagraphs (K) and (L) of
    1848(c)(2) of the Social Security Act, as added by
    subsection (a), by program instruction or otherwise.
    (C) Section 4505(d) of the Balanced Budget Act of
    1997 <>  is repealed.
    (D) Except for provisions related to confidentiality
    of information, the provisions of the Federal
    Acquisition Regulation shall not apply to this section
    or the amendment made by this section.
    (2) Focusing cms resources on potentially overvalued
    codes. <> --Section 1868(a) of the Social
    Security Act (42 U.S.C. 1395ee(a)) is repealed.

    [[Page 436]]

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

    (a) Adjustment in Practice Expense To Reflect Higher Presumed
    Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w-
    4) is amended--
    (1) in subsection (b)(4)--
    (A) in subparagraph (B), by striking ``subparagraph
    (A)'' and inserting ``this paragraph''; and
    (B) by adding at the end the following new
    subparagraph:
    ``(C) <> Adjustment in practice
    expense to reflect higher presumed utilization.--
    Consistent with the methodology for computing the number
    of practice expense relative value units under
    subsection (c)(2)(C)(ii) with respect to advanced
    diagnostic imaging services (as defined in section
    1834(e)(1)(B)) furnished on or after January 1, 2010,
    the Secretary shall adjust such number of units so it
    reflects--
    ``(i) in the case of services furnished on or
    after January 1, 2010, and before January 1, 2013,
    a 65 percent (rather than 50 percent) presumed
    rate of utilization of imaging equipment;
    ``(ii) in the case of services furnished on or
    after January 1, 2013, and before January 1, 2014,
    a 70 percent (rather than 50 percent) presumed
    rate of utilization of imaging equipment; and
    ``(iii) in the case of services furnished on
    or after January 1, 2014, a 75 percent (rather
    than 50 percent) presumed rate of utilization of
    imaging equipment.''; and
    (2) in subsection (c)(2)(B)(v), by adding at the end the
    following new subclauses:
    ``(III) Change in presumed
    utilization level of certain advanced
    diagnostic imaging services for 2010
    through 2012.--Effective for fee
    schedules established beginning with
    2010 and ending with 2012, reduced
    expenditures attributable to the
    presumed rate of utilization of imaging
    equipment of 65 percent under subsection
    (b)(4)(C)(i) instead of a presumed rate
    of utilization of such equipment of 50
    percent.
    ``(IV) Change in presumed
    utilization level of certain advanced
    diagnostic imaging services for 2013.--
    Effective for fee schedules established
    for 2013, reduced expenditures
    attributable to the presumed rate of
    utilization of imaging equipment of 70
    percent under subsection (b)(4)(C)(ii)
    instead of a presumed rate of
    utilization of such equipment of 50
    percent.
    ``(V) Change in presumed utilization
    level of certain advanced diagnostic
    imaging services for 2014 and subsequent
    years.--Effective for fee schedules
    established beginning with 2014, reduced
    expenditures attributable to the
    presumed

    [[Page 437]]

    rate of utilization of imaging equipment
    of 75 percent under subsection
    (b)(4)(C)(iii) instead of a presumed
    rate of utilization of such equipment of
    50 percent.''.

    (b) Adjustment in Technical Component ``discount'' on Single-session
    Imaging to Consecutive Body Parts.--Section 1848 of the Social Security
    Act (42 U.S.C. 1395w-4), as amended by subsection (a), is amended--
    (1) in subsection (b)(4), by adding at the end the following
    new subparagraph:
    ``(D) Adjustment in technical component discount on
    single-session imaging involving consecutive body
    parts.--For services furnished on or after July 1, 2010,
    the Secretary shall increase the reduction in payments
    attributable to the multiple procedure payment reduction
    applicable to the technical component for imaging under
    the final rule published by the Secretary in the Federal
    Register on November 21, 2005 (part 405 of title 42,
    Code of Federal Regulations) from 25 percent to 50
    percent.''; and
    (2) in subsection (c)(2)(B)(v), by adding at the end the
    following new subclause:
    ``(VI) Additional reduced payment
    for multiple imaging procedures.--
    Effective for fee schedules established
    beginning with 2010 (but not applied for
    services furnished prior to July 1,
    2010), reduced expenditures attributable
    to the increase in the multiple
    procedure payment reduction from 25 to
    50 percent (as described in subsection
    (b)(4)(D)).''.

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

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

    (a) In General.--Section 1834(a)(7)(A) of the Social Security Act
    (42 U.S.C. 1395m(a)(7)(A)) is amended--
    (1) in clause (i)--
    (A) in subclause (II), by inserting ``subclause
    (III) and'' after ``Subject to''; and
    (B) by adding at the end the following new
    subclause:
    ``(III) Special rule for power-
    driven wheelchairs.--For purposes of
    payment for power-driven wheelchairs,
    subclause (II) shall be applied by
    substituting `15 percent' and `6
    percent' for `10 percent' and `7.5
    percent', respectively.''; and
    (2) in clause (iii)--
    (A) in the heading, by inserting ``complex,
    rehabilitative'' before ``power-driven''; and
    (B) by inserting ``complex, rehabilitative'' before
    ``power-driven''.

    [[Page 438]]

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

    SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT.

    (a) Extension of Section 508 Hospital Reclassifications.--
    (1) In general.--Subsection (a) of section 106 of division B
    of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395
    note), as amended by section 117 of the Medicare, Medicaid, and
    SCHIP Extension Act of 2007 (Public Law 110-173) and section 124
    of the Medicare Improvements for Patients and Providers Act of
    2008 (Public Law 110-275), <>  is
    amended by striking ``September 30, 2009'' and inserting
    ``September 30, 2010''.
    (2) <> Use of particular wage
    index in fiscal year 2010.--For purposes of implementation of
    the amendment made by this subsection during fiscal year 2010,
    the Secretary shall use the hospital wage index that was
    promulgated by the Secretary in the Federal Register on August
    27, 2009 (74 Fed. Reg. 43754), and any subsequent corrections.

    (b) <> Plan for Reforming the Medicare
    Hospital Wage Index System.--
    (1) In general. <> --Not later
    than December 31, 2011, the Secretary of Health and Human
    Services (in this section referred to as the ``Secretary'')
    shall submit to Congress a report that includes a plan to reform
    the hospital wage index system under section 1886 of the Social
    Security Act.
    (2) Details.--In developing the plan under paragraph (1),
    the Secretary shall take into account the goals for reforming
    such system set forth in the Medicare Payment Advisory
    Commission June 2007 report entitled ``Report to Congress:
    Promoting Greater Efficiency in Medicare'', including
    establishing a new hospital compensation index system that--
    (A) uses Bureau of Labor Statistics data, or other
    data or methodologies, to calculate relative wages for
    each geographic area involved;
    (B) minimizes wage index adjustments between and
    within metropolitan statistical areas and statewide
    rural areas;
    (C) includes methods to minimize the volatility of
    wage index adjustments that result from implementation
    of policy, while maintaining budget neutrality in
    applying such adjustments;
    (D) takes into account the effect that
    implementation of the system would have on health care
    providers and on each region of the country;

    [[Page 439]]

    (E) addresses issues related to occupational mix,
    such as staffing practices and ratios, and any evidence
    on the effect on quality of care or patient safety as a
    result of the implementation of the system; and
    (F) provides for a transition.
    (3) Consultation.--In developing the plan under paragraph
    (1), the Secretary shall consult with relevant affected parties.

    (c) Use of Particular Criteria for Determining
    Reclassifications. <> --Notwithstanding any other
    provision of law, in making decisions on applications for
    reclassification of a subsection (d) hospital (as defined in paragraph
    (1)(B) of section 1886(d) of the Social Security Act (42 U.S.C.
    1395ww(d)) for the purposes described in paragraph (10)(D)(v) of such
    section for fiscal year 2011 and each subsequent fiscal year (until the
    first fiscal year beginning on or after the date that is 1 year after
    the Secretary of Health and Human Services submits the report to
    Congress under subsection (b)), the Geographic Classification Review
    Board established under paragraph (10) of such section shall use the
    average hourly wage comparison criteria used in making such decisions as
    of September 30, 2008. The preceding sentence shall be effected in a
    budget neutral manner.

    SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS.

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

    SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

    (a) In General.--Section 1847A of the Social Security Act (42 U.S.C.
    1395w-3a) is amended--
    (1) in subsection (b)--
    (A) in paragraph (1)--
    (i) in subparagraph (A), by striking ``or'' at
    the end;
    (ii) in subparagraph (B), by striking the
    period at the end and inserting ``; or''; and
    (iii) by adding at the end the following new
    subparagraph:

    [[Page 440]]

    ``(C) in the case of a biosimilar biological product
    (as defined in subsection (c)(6)(H)), the amount
    determined under paragraph (8).''; and
    (B) by adding at the end the following new
    paragraph:
    ``(8) Biosimilar biological product.--The amount specified
    in this paragraph for a biosimilar biological product described
    in paragraph (1)(C) is the sum of--
    ``(A) the average sales price as determined using
    the methodology described under paragraph (6) applied to
    a biosimilar biological product for all National Drug
    Codes assigned to such product in the same manner as
    such paragraph is applied to drugs described in such
    paragraph; and
    ``(B) 6 percent of the amount determined under
    paragraph (4) for the reference biological product (as
    defined in subsection (c)(6)(I)).''; and
    (2) in subsection (c)(6), by adding at the end the following
    new subparagraph:
    ``(H) Biosimilar biological product.--The term
    `biosimilar biological product' means a biological
    product approved under an abbreviated application for a
    license of a biological product that relies in part on
    data or information in an application for another
    biological product licensed under section 351 of the
    Public Health Service Act.
    ``(I) Reference biological product.--The term
    `reference biological product' means the biological
    product licensed under such section 351 that is referred
    to in the application described in subparagraph (H) of
    the biosimilar biological product.''.

    (b) <> Effective Date.--
    The amendments made by subsection (a) shall apply to payments for
    biosimilar biological products beginning with the first day of the
    second calendar quarter after enactment of legislation providing for a
    biosimilar pathway (as determined by the Secretary).

    SEC. 3140. <> MEDICARE HOSPICE CONCURRENT CARE
    DEMONSTRATION PROGRAM.

    (a) Establishment.--
    (1) In general.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall
    establish a Medicare Hospice Concurrent Care demonstration
    program at participating hospice programs under which Medicare
    beneficiaries are furnished, during the same period, hospice
    care and any other items or services covered under title XVIII
    of the Social Security Act (42 U.S.C. 1395 et seq.) from funds
    otherwise paid under such title to such hospice programs.
    (2) Duration.--The demonstration program under this section
    shall be conducted for a 3-year period.
    (3) Sites.--The Secretary shall select not more than 15
    hospice programs at which the demonstration program under this
    section shall be conducted. Such hospice programs shall be
    located in urban and rural areas.

    (b) Independent Evaluation and Reports.--
    (1) Independent evaluation.--The Secretary shall provide for
    the conduct of an independent evaluation of the demonstration
    program under this section. Such independent evaluation shall
    determine whether the demonstration program

    [[Page 441]]

    has improved patient care, quality of life, and cost-
    effectiveness for Medicare beneficiaries participating in the
    demonstration program.
    (2) Reports.--The Secretary shall submit to Congress a
    report containing the results of the evaluation conducted under
    paragraph (1), together with such recommendations as the
    Secretary determines appropriate.

    (c) Budget Neutrality.--With respect to the 3-year period of the
    demonstration program under this section, the Secretary shall ensure
    that the aggregate expenditures under title XVIII for such period shall
    not exceed the aggregate expenditures that would have been expended
    under such title if the demonstration program under this section had not
    been implemented.

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

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

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

    (a) Study.--
    (1) In general.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall conduct
    a study on the need for an additional payment for urban
    Medicare-dependent hospitals for inpatient hospital services
    under section 1886 of the Social Security Act (42 U.S.C.
    1395ww). Such study shall include an analysis of--
    (A) the Medicare inpatient margins of urban
    Medicare-dependent hospitals, as compared to other
    hospitals which receive 1 or more additional payments or
    adjustments under such section (including those payments
    or adjustments described in paragraph (2)(A)); and
    (B) whether payments to medicare-dependent, small
    rural hospitals under subsection (d)(5)(G) of such
    section should be applied to urban Medicare-dependent
    hospitals.
    (2) Urban medicare-dependent hospital defined.--For purposes
    of this section, the term ``urban Medicare-dependent hospital''
    means a subsection (d) hospital (as defined in subsection
    (d)(1)(B) of such section) that--
    (A) does not receive any additional payment or
    adjustment under such section, such as payments for
    indirect medical education costs under subsection
    (d)(5)(B) of such section, disproportionate share
    payments under subsection (d)(5)(A) of such section,
    payments to a rural referral center under subsection
    (d)(5)(C) of such section, payments to a critical access
    hospital under section 1814(l) of such Act (42 U.S.C.
    1395f(l)), payments to a sole community hospital under
    subsection (d)(5)(D) of such section 1886, or payments
    to a medicare-dependent, small rural hospital under
    subsection (d)(5)(G) of such section 1886; and

    [[Page 442]]

    (B) for which more than 60 percent of its inpatient
    days or discharges during 2 of the 3 most recently
    audited cost reporting periods for which the Secretary
    has a settled cost report were attributable to
    inpatients entitled to benefits under part A of title
    XVIII of such Act.

    (b) Report.--Not later than 9 months after the date of enactment of
    this Act, the Secretary shall submit to Congress a report containing the
    results of the study conducted under subsection (a), together with
    recommendations for such legislation and administrative action as the
    Secretary determines appropriate.

    SEC. 3143. <> PROTECTING HOME HEALTH BENEFITS.

    Nothing in the provisions of, or amendments made by, this Act shall
    result in the reduction of guaranteed home health benefits under title
    XVIII of the Social Security Act.

    Subtitle C--Provisions Relating to Part C

    SEC. 3201. MEDICARE ADVANTAGE PAYMENT.

    (a) MA Benchmark Based on Plan's Competitive Bids.--
    (1) In general.--Section 1853(j) of the Social Security Act
    (42 U.S.C. 1395w-23(j)) is amended--
    (A) by striking ``Amounts.--For purposes'' and
    inserting ``Amounts.--
    ``(1) In general.--For purposes'';
    (B) by redesignating paragraphs (1) and (2) as
    subparagraphs (A) and (B), respectively, and indenting
    the subparagraphs appropriately;
    (C) in subparagraph (A), as redesignated by
    subparagraph (B)--
    (i) by redesignating subparagraphs (A) and (B)
    as clauses (i) and (ii), respectively, and
    indenting the clauses appropriately; and
    (ii) in clause (i), as redesignated by clause
    (i), by striking ``an amount equal to'' and all
    that follows through the end and inserting ``an
    amount equal to--
    ``(I) for years before 2007, \1/12\
    of the annual MA capitation rate under
    section 1853(c)(1) for the area for the
    year, adjusted as appropriate for the
    purpose of risk adjustment;
    ``(II) for 2007 through 2011, \1/12\
    of the applicable amount determined
    under subsection (k)(1) for the area for
    the year;
    ``(III) for 2012, the sum of--
    ``(aa) \2/3\ of the quotient
    of--
    ``(AA) the applicable
    amount determined under
    subsection (k)(1) for the
    area for the year; and
    ``(BB) 12; and
    ``(bb) \1/3\ of the MA
    competitive benchmark amount
    (determined under paragraph (2))
    for the area for the month;
    ``(IV) for 2013, the sum of--
    ``(aa) \1/3\ of the quotient
    of--

    [[Page 443]]

    ``(AA) the applicable
    amount determined under
    subsection (k)(1) for the
    area for the year; and
    ``(BB) 12; and
    ``(bb) \2/3\ of the MA
    competitive benchmark amount (as
    so determined) for the area for
    the month;
    ``(V) for 2014, the MA competitive
    benchmark amount for the area for a
    month in 2013 (as so determined),
    increased by the national per capita MA
    growth percentage, described in
    subsection (c)(6) for 2014, but not
    taking into account any adjustment under
    subparagraph (C) of such subsection for
    a year before 2004; and
    ``(VI) for 2015 and each subsequent
    year, the MA competitive benchmark
    amount (as so determined) for the area
    for the month; or'';
    (iii) in clause (ii), as redesignated by
    clause (i), by striking ``subparagraph (A)'' and
    inserting ``clause (i)'';
    (D) by adding at the end the following new
    paragraphs:
    ``(2) Computation of ma competitive benchmark amount.--
    ``(A) In general.--Subject to subparagraph (B) and
    paragraph (3), for months in each year (beginning with
    2012) for each MA payment area the Secretary shall
    compute an MA competitive benchmark amount equal to the
    weighted average of the unadjusted MA statutory non-drug
    monthly bid amount (as defined in section 1854(b)(2)(E))
    for each MA plan in the area, with the weight for each
    plan being equal to the average number of beneficiaries
    enrolled under such plan in the reference month (as
    defined in section 1858(f)(4), except that, in applying
    such definition for purposes of this paragraph, `to
    compute the MA competitive benchmark amount under
    section 1853(j)(2)' shall be substituted for `to compute
    the percentage specified in subparagraph (A) and other
    relevant percentages under this part').
    ``(B) Weighting rules.--
    ``(i) Single plan rule.--In the case of an MA
    payment area in which only a single MA plan is
    being offered, the weight under subparagraph (A)
    shall be equal to 1.
    ``(ii) Use of simple average among multiple
    plans if no plans offered in previous year.--In
    the case of an MA payment area in which no MA plan
    was offered in the previous year and more than 1
    MA plan is offered in the current year, the
    Secretary shall use a simple average of the
    unadjusted MA statutory non-drug monthly bid
    amount (as so defined) for purposes of computing
    the MA competitive benchmark amount under
    subparagraph (A).
    ``(3) Cap on ma competitive benchmark amount.--In no case
    shall the MA competitive benchmark amount for an area for a
    month in a year be greater than the applicable amount

    [[Page 444]]

    that would (but for the application of this subsection) be
    determined under subsection (k)(1) for the area for the month in
    the year.''; and
    (E) in subsection (k)(2)(B)(ii)(III), by striking
    ``(j)(1)(A)'' and inserting ``(j)(1)(A)(i)''.
    (2) Conforming amendments.--
    (A) Section 1853(k)(2) of the Social Security Act
    (42 U.S.C. 1395w-23(k)(2)) is amended--
    (i) in subparagraph (A), by striking ``through
    2010'' and inserting ``and subsequent years''; and
    (ii) in subparagraph (C)--
    (I) in clause (iii), by striking
    ``and'' at the end;
    (II) in clause (iv), by striking the
    period at the end and inserting ``;
    and''; and
    (III) by adding at the end the
    following new clause:
    ``(v) for 2011 and subsequent years, 0.00.''.
    (B) Section 1854(b) of the Social Security Act (42
    U.S.C. 1395w-24(b)) is amended--
    (i) in paragraph (3)(B)(i), by striking
    ``1853(j)(1)'' and inserting ``1853(j)(1)(A)'';
    and
    (ii) in paragraph (4)(B)(i), by striking
    ``1853(j)(2)'' and inserting ``1853(j)(1)(B)''.
    (C) Section 1858(f) of the Social Security
    Act <> (42 U.S.C. 1395w-27(f))
    is amended--
    (i) in paragraph (1), by striking
    ``1853(j)(2)'' and inserting ``1853(j)(1)(B)'';
    and
    (ii) in paragraph (3)(A), by striking
    ``1853(j)(1)(A)'' and inserting
    ``1853(j)(1)(A)(i)''.
    (D) Section 1860C-1(d)(1)(A) of the Social Security
    Act (42 U.S.C. 1395w-29(d)(1)(A)) is amended by striking
    ``1853(j)(1)(A)'' and inserting ``1853(j)(1)(A)(i)''.

    (b) Reduction of National Per Capita Growth Percentage for 2011.--
    Section 1853(c)(6) of the Social Security Act (42 U.S.C. 1395w-23(c)(6))
    is amended--
    (1) in clause (v), by striking ``and'' at the end;
    (2) in clause (vi)--
    (A) by striking ``for a year after 2002'' and
    inserting ``for 2003 through 2010''; and
    (B) by striking the period at the end and inserting
    a comma; and
    (C) by adding at the end the following new clauses:
    ``(vii) for 2011, 3 percentage points; and
    ``(viii) for a year after 2011, 0 percentage
    points.''.

    (c) Enhancement of Beneficiary Rebates.--Section 1854(b)(1)(C)(i) of
    the Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)(i)) is amended by
    inserting ``(or 100 percent in the case of plan years beginning on or
    after January 1, 2014)'' after ``75 percent''.
    (d) Bidding Rules.--
    (1) Requirements for information
    submitted. <> --Section 1854(a)(6)(A) of
    the Social Security Act (42 U.S.C. 1395w-24(a)(6)(A)) is
    amended, in the flush matter following clause (v), by adding at
    the end the following sentence: ``Information to be submitted
    under this paragraph shall be certified by a qualified member of
    the American Academy of Actuaries

    [[Page 445]]

    and shall meet actuarial guidelines and rules established by the
    Secretary under subparagraph (B)(v).''.
    (2) Establishment of actuarial guidelines.--Section
    1854(a)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
    24(a)(6)(B)) is amended--
    (A) in clause (i), by striking ``(iii) and (iv)''
    and inserting ``(iii), (iv), and (v)''; and
    (B) by adding at the end the following new clause:
    ``(v) Establishment of actuarial guidelines.--
    ``(I) In general.--In order to
    establish fair MA competitive benchmarks
    under section 1853(j)(1)(A)(i), the
    Secretary, acting through the Chief
    Actuary of the Centers for Medicare &
    Medicaid Services (in this clause
    referred to as the `Chief Actuary'),
    shall establish--
    ``(aa) actuarial guidelines
    for the submission of bid
    information under this
    paragraph; and
    ``(bb) bidding rules that
    are appropriate to ensure
    accurate bids and fair
    competition among MA plans.
    ``(II) Denial of bid amounts.--The
    Secretary shall deny monthly bid amounts
    submitted under subparagraph (A) that do
    not meet the actuarial guidelines and
    rules established under subclause (I).
    ``(III) Refusal to accept certain
    bids due to misrepresentations and
    failures to adequately meet
    requirements. <> --In the case where the
    Secretary determines that information
    submitted by an MA organization under
    subparagraph (A) contains consistent
    misrepresentations and failures to
    adequately meet requirements of the
    organization, the Secretary may refuse
    to accept any additional such bid
    amounts from the organization for the
    plan year and the Chief Actuary shall,
    if the Chief Actuary determines that the
    actuaries of the organization were
    complicit in those misrepresentations
    and failures, report those actuaries to
    the Actuarial Board for Counseling and
    Discipline.''.
    (3) <> Effective date.--The
    amendments made by this subsection shall apply to bid amounts
    submitted on or after January 1, 2012.

    (e) MA Local Plan Service Areas.--
    (1) In general.--Section 1853(d) of the Social Security Act
    (42 U.S.C. 1395w-23(d)) is amended--
    (A) in the subsection heading, by striking ``MA
    Region'' and inserting ``MA Region; MA Local Plan
    Service Area'';
    (B) in paragraph (1), by striking subparagraph (A)
    and inserting the following:
    ``(A) with respect to an MA local plan--
    ``(i) for years before 2012, an MA local area
    (as defined in paragraph (2)); and

    [[Page 446]]

    ``(ii) for 2012 and succeeding years, a
    service area that is an entire urban or rural
    area, as applicable (as described in paragraph
    (5)); and''; and
    (C) by adding at the end the following new
    paragraph:
    ``(5) MA local plan service area.--For 2012 and succeeding
    years, the service area for an MA local plan shall be an entire
    urban or rural area in each State as follows:
    ``(A) Urban areas.--
    ``(i) In general.--Subject to clause (ii) and
    subparagraphs (C) and (D), the service area for an
    MA local plan in an urban area shall be the Core
    Based Statistical Area (in this paragraph referred
    to as a `CBSA') or, if applicable, a conceptually
    similar alternative classification, as defined by
    the Director of the Office of Management and
    Budget.
    ``(ii) CBSA covering more than one state.--In
    the case of a CBSA (or alternative classification)
    that covers more than one State, the Secretary
    shall divide the CBSA (or alternative
    classification) into separate service areas with
    respect to each State covered by the CBSA (or
    alternative classification).
    ``(B) Rural areas.--Subject to subparagraphs (C) and
    (D), the service area for an MA local plan in a rural
    area shall be a county that does not qualify for
    inclusion in a CBSA (or alternative classification), as
    defined by the Director of the Office of Management and
    Budget.
    ``(C) Refinements to service areas.--For 2015 and
    succeeding years, in order to reflect actual patterns of
    health care service utilization, the Secretary may
    adjust the boundaries of service areas for MA local
    plans in urban areas and rural areas under subparagraphs
    (A) and (B), respectively, but may only do so based on
    recent analyses of actual patterns of care.
    ``(D) Additional authority to make limited
    exceptions to service area requirements for ma local
    plans.--The Secretary may, in addition to any
    adjustments under subparagraph (C), make limited
    exceptions to service area requirements otherwise
    applicable under this part for MA local plans that have
    in effect (as of the date of enactment of the Patient
    Protection and Affordable Care Act)--
    ``(i) agreements with another MA organization
    or MA plan that preclude the offering of benefits
    throughout an entire service area; or
    ``(ii) limitations in their structural
    capacity to support adequate networks throughout
    an entire service area as a result of the delivery
    system model of the MA local plan.''.
    (2) Conforming amendments.--
    (A) In general.--
    (i) Section 1851(b)(1) of the Social Security
    Act (42 U.S.C. 1395w-21(b)(1)) is amended by
    striking subparagraph (C).
    (ii) Section 1853(b)(1)(B)(i) of such Act (42
    U.S.C. 1395w-23(b)(1)(B)(i))--

    [[Page 447]]

    (I) in the matter preceding
    subclause (I), by striking ``MA payment
    area'' and inserting ``MA local area (as
    defined in subsection (d)(2))''; and
    (II) in subclause (I), by striking
    ``MA payment area'' and inserting ``MA
    local area (as so defined)''.
    (iii) Section 1853(b)(4) of such Act (42
    U.S.C. 1395w-23(b)(4)) is amended by striking
    ``Medicare Advantage payment area'' and inserting
    ``MA local area (as so defined)''.
    (iv) Section 1853(c)(1) of such Act (42 U.S.C.
    1395w-23(c)(1)) is amended--
    (I) in the matter preceding
    subparagraph (A), by striking ``a
    Medicare Advantage payment area that
    is''; and
    (II) in subparagraph (D)(i), by
    striking ``MA payment area'' and
    inserting ``MA local area (as defined in
    subsection (d)(2))''.
    (v) Section 1854 of such Act (42 U.S.C. 1395w-
    24) is amended by striking subsection (h).
    (B) <> Effective
    date.--The amendments made by this paragraph shall take
    effect on January 1, 2012.

    (f) Performance Bonuses.--
    (1) MA plans.--
    (A) In general.--Section 1853 of the Social Security
    Act (42 U.S.C. 1395w-23) is amended by adding at the end
    the following new subsection:

    ``(n) Performance Bonuses.--
    ``(1) Care coordination and management performance bonus.--
    ``(A) In general. <> --For years beginning with 2014,
    subject to subparagraph (B), in the case of an MA plan
    that conducts 1 or more programs described in
    subparagraph (C) with respect to the year, the Secretary
    shall, in addition to any other payment provided under
    this part, make monthly payments, with respect to
    coverage of an individual under this part, to the MA
    plan in an amount equal to the product of--
    ``(i) 0.5 percent of the national monthly per
    capita cost for expenditures for individuals
    enrolled under the original medicare fee-for-
    service program for the year; and
    ``(ii) the total number of programs described
    in clauses (i) through (ix) of subparagraph (C)
    that the Secretary determines the plan is
    conducting for the year under such subparagraph.
    ``(B) Limitation.--In no case may the total amount
    of payment with respect to a year under subparagraph (A)
    be greater than 2 percent of the national monthly per
    capita cost for expenditures for individuals enrolled
    under the original medicare fee-for-service program for
    the year, as determined prior to the application of risk
    adjustment under paragraph (4).
    ``(C) Programs described.--The following programs
    are described in this paragraph:
    ``(i) Care management programs that--
    ``(I) target individuals with 1 or
    more chronic conditions;

    [[Page 448]]

    ``(II) identify gaps in care; and
    ``(III) facilitate improved care by
    using additional resources like nurses,
    nurse practitioners, and physician
    assistants.
    ``(ii) Programs that focus on patient
    education and self-management of health
    conditions, including interventions that--
    ``(I) help manage chronic
    conditions;
    ``(II) reduce declines in health
    status; and
    ``(III) foster patient and provider
    collaboration.
    ``(iii) Transitional care interventions that
    focus on care provided around a hospital inpatient
    episode, including programs that target post-
    discharge patient care in order to reduce
    unnecessary health complications and readmissions.
    ``(iv) Patient safety programs, including
    provisions for hospital-based patient safety
    programs in contracts that the Medicare Advantage
    organization offering the MA plan has with
    hospitals.
    ``(v) Financial policies that promote
    systematic coordination of care by primary care
    physicians across the full spectrum of specialties
    and sites of care, such as medical homes,
    capitation arrangements, or pay-for-performance
    programs.
    ``(vi) Programs that address, identify, and
    ameliorate health care disparities among principal
    at-risk subpopulations.
    ``(vii) Medication therapy management programs
    that are more extensive than is required under
    section 1860D-4(c) (as determined by the
    Secretary).
    ``(viii) Health information technology
    programs, including clinical decision support and
    other tools to facilitate data collection and
    ensure patient-centered, appropriate care.
    ``(ix) Such other care management and
    coordination programs as the Secretary determines
    appropriate.
    ``(D) Conduct of program in urban and rural areas.--
    An MA plan may conduct a program described in
    subparagraph (C) in a manner appropriate for an urban or
    rural area, as applicable.
    ``(E) Reporting of data.--Each Medicare Advantage
    organization shall provide to the Secretary the
    information needed to determine whether they are
    eligible for a care coordination and management
    performance bonus at a time and in a manner specified by
    the Secretary.
    ``(F) Periodic auditing. <> --The
    Secretary shall provide for the annual auditing of
    programs described in subparagraph (C) for which an MA
    plan receives a care coordination and management
    performance bonus under this paragraph. The Comptroller
    General shall monitor auditing activities conducted
    under this subparagraph.
    ``(2) Quality performance bonuses.--
    ``(A) Quality bonus. <> --For years beginning with 2014, the
    Secretary shall, in addition to any other payment
    provided under this part, make monthly payments, with
    respect to coverage of an individual under this part, to
    an MA plan that achieves at least a 3 star rating (or

    [[Page 449]]

    comparable rating) on a rating system described in
    subparagraph (C) in an amount equal to--
    ``(i) in the case of a plan that achieves a 3
    star rating (or comparable rating) on such system
    2 percent of the national monthly per capita cost
    for expenditures for individuals enrolled under
    the original medicare fee-for-service program for
    the year; and
    ``(ii) in the case of a plan that achieves a 4
    or 5 star rating (or comparable rating on such
    system, 4 percent of such national monthly per
    capita cost for the year.
    ``(B) Improved quality bonus. <> --For years beginning with 2014, in
    the case of an MA plan that does not receive a quality
    bonus under subparagraph (A) and is an improved quality
    MA plan with respect to the year (as identified by the
    Secretary), the Secretary shall, in addition to any
    other payment provided under this part, make monthly
    payments, with respect to coverage of an individual
    under this part, to the MA plan in an amount equal to 1
    percent of such national monthly per capita cost for the
    year.
    ``(C) Use of rating system.--For purposes of
    subparagraph (A), a rating system described in this
    paragraph is--
    ``(i) a rating system that uses up to 5 stars
    to rate clinical quality and enrollee satisfaction
    and performance at the Medicare Advantage contract
    or MA plan level; or
    ``(ii) such other system established by the
    Secretary that provides for the determination of a
    comparable quality performance rating to the
    rating system described in clause (i).
    ``(D) Data used in determining score.--
    ``(i) In general.--The rating of an MA plan
    under the rating system described in subparagraph
    (C) with respect to a year shall be based on based
    on the most recent data available.
    ``(ii) Plans that fail to report data.--An MA
    plan which does not report data that enables the
    Secretary to rate the plan for purposes of
    subparagraph (A) or identify the plan for purposes
    of subparagraph (B) shall be counted, for purposes
    of such rating or identification, as having the
    lowest plan performance rating and the lowest
    percentage improvement, respectively.
    ``(3) Quality bonus for new and low enrollment ma plans.--
    ``(A) New ma plans. <> --For years beginning with 2014, in
    the case of an MA plan that first submits a bid under
    section 1854(a)(1)(A) for 2012 or a subsequent year,
    only receives enrollments made during the coverage
    election periods described in section 1851(e), and is
    not able to receive a bonus under subparagraph (A) or
    (B) of paragraph (2) for the year, the Secretary shall,
    in addition to any other payment provided under this
    part, make monthly payments, with respect to coverage of
    an individual under this part, to the MA plan in an
    amount equal to 2 percent of national monthly per capita
    cost for expenditures for

    [[Page 450]]

    individuals enrolled under the original medicare fee-
    for-service program for the year. In its fourth year of
    operation, the MA plan shall be paid in the same manner
    as other MA plans with comparable enrollment.
    ``(B) Low enrollment plans. <> --For years beginning with 2014,
    in the case of an MA plan that has low enrollment (as
    defined by the Secretary) and would not otherwise be
    able to receive a bonus under subparagraph (A) or (B) of
    paragraph (2) or subparagraph (A) of this paragraph for
    the year (referred to in this subparagraph as a `low
    enrollment plan'), the Secretary shall use a regional or
    local mean of the rating of all MA plans in the region
    or local area, as determined appropriate by the
    Secretary, on measures used to determine whether MA
    plans are eligible for a quality or an improved quality
    bonus, as applicable, to determine whether the low
    enrollment plan is eligible for a bonus under such a
    subparagraph.
    ``(4) Risk adjustment.--The Secretary shall risk adjust a
    performance bonus under this subsection in the same manner as
    the Secretary risk adjusts beneficiary rebates described in
    section 1854(b)(1)(C).
    ``(5) Notification.--The Secretary, in the annual
    announcement required under subsection (b)(1)(B) for 2014 and
    each succeeding year, shall notify the Medicare Advantage
    organization of any performance bonus (including a care
    coordination and management performance bonus under paragraph
    (1), a quality performance bonus under paragraph (2), and a
    quality bonus for new and low enrollment plans under paragraph
    (3)) that the organization will receive under this subsection
    with respect to the year. <> The Secretary
    shall provide for the publication of the information described
    in the previous sentence on the Internet website of the Centers
    for Medicare & Medicaid Services.''
    (B) Conforming amendment.--Section 1853(a)(1)(B) of
    the Social Security Act (42 U.S.C. 1395w-23(a)(1)(B)) is
    amended--
    (i) in clause (i), by inserting ``and any
    performance bonus under subsection (n)'' before
    the period at the end; and
    (ii) in clause (ii), by striking ``(G)'' and
    inserting ``(G), plus the amount (if any) of any
    performance bonus under subsection (n)''.
    (2) Application of performance bonuses to ma regional
    plans.--Section 1858 of the Social Security Act (42 U.S.C.
    1395w-27a) is amended--
    (A) in subsection (f)(1), by striking ``subsection
    (e)'' and inserting ``subsections (e) and (i)''; and
    (B) by adding at the end the following new
    subsection:

    ``(i) Application of Performance Bonuses to MA Regional
    Plans. <> --For years beginning with 2014, the
    Secretary shall apply the performance bonuses under section 1853(n)
    (relating to bonuses for care coordination and management, quality
    performance, and new and low enrollment MA plans) to MA regional plans
    in a similar manner as such performance bonuses apply to MA plans under
    such subsection.''.

    (g) Grandfathering Supplemental Benefits for Current Enrollees After
    Implementation of Competitive Bidding.--

    [[Page 451]]

    Section 1853 of the Social Security Act (42 U.S.C. 1395w-23), as amended
    by subsection (f), is amended by adding at the end the following new
    subsection:
    ``(o) Grandfathering Supplemental Benefits for Current Enrolles
    After Implementation of Competitive Bidding.--
    ``(1) Identification of areas.--The Secretary shall identify
    MA local areas in which, with respect to 2009, average bids
    submitted by an MA organization under section 1854(a) for MA
    local plans in the area are not greater than 75 percent of the
    adjusted average per capita cost for the year involved,
    determined under section 1876(a)(4), for the area for
    individuals who are not enrolled in an MA plan under this part
    for the year, but adjusted to exclude costs attributable to
    payments under section 1848(o), 1886(n), and 1886(h).
    ``(2) Election to provide rebates to grandfathered
    enrollees.--
    ``(A) In general. <> --For
    years beginning with 2012, each Medicare Advantage
    organization offering an MA local plan in an area
    identified by the Secretary under paragraph (1) may
    elect to provide rebates to grandfathered enrollees
    under section 1854(b)(1)(C). In the case where an MA
    organization makes such an election, the monthly per
    capita dollar amount of such rebates shall not exceed
    the applicable amount for the year (as defined in
    subparagraph (B)).
    ``(B) Applicable amount. <> --For
    purposes of this subsection, the term `applicable
    amount' means--
    ``(i) for 2012, the monthly per capita dollar
    amount of such rebates provided to enrollees under
    the MA local plan with respect to 2011; and
    ``(ii) for a subsequent year, 95 percent of
    the amount determined under this subparagraph for
    the preceding year.
    ``(3) Special rules for plans in identified
    areas. <> --Notwithstanding any other
    provision of this part, the following shall apply with respect
    to each Medicare Advantage organization offering an MA local
    plan in an area identified by the Secretary under paragraph (1)
    that makes an election described in paragraph (2):
    ``(A) Payments.--The amount of the monthly payment
    under this section to the Medicare Advantage
    organization, with respect to coverage of a
    grandfathered enrollee under this part in the area for a
    month, shall be equal to--
    ``(i) for 2012 and 2013, the sum of--
    ``(I) the bid amount under section
    1854(a) for the MA local plan; and
    ``(II) the applicable amount (as
    defined in paragraph (2)(B)) for the MA
    local plan for the year.
    ``(ii) for 2014 and subsequent years, the sum
    of--
    ``(I) the MA competitive benchmark
    amount under subsection (j)(1)(A)(i) for
    the area for the month, adjusted, only
    to the extent the Secretary determines
    necessary, to account for induced
    utilization as a result of rebates
    provided to grandfathered enrollees
    (except that such adjustment shall not
    exceed 0.5 percent of such MA
    competitive benchmark amount); and

    [[Page 452]]

    ``(II) the applicable amount (as so
    defined) for the MA local plan for the
    year.
    ``(B) Requirement to submit bids under competitive
    bidding.--The Medicare Advantage organization shall
    submit a single bid amount under section 1854(a) for the
    MA local plan. The Medicare Advantage organization shall
    remove from such bid amount any effects of induced
    demand for care that may result from the higher rebates
    available to grandfathered enrollees under this
    subsection.
    ``(C) Nonapplication of bonus payments and any other
    rebates.--The Medicare Advantage organization offering
    the MA local plan shall not be eligible for any bonus
    payment under subsection (n) or any rebate under this
    part (other than as provided under this subsection) with
    respect to grandfathered enrollees.
    ``(D) Nonapplication of uniform bid and premium
    amounts to grandfathered enrollees.--Section 1854(c)
    shall not apply with respect to the MA local plan.
    ``(E) Nonapplication of limitation on application of
    plan rebates toward payment of part b premium.--
    Notwithstanding clause (iii) of section 1854(b)(1)(C),
    in the case of a grandfathered enrollee, a rebate under
    such section may be used for the purpose described in
    clause (ii)(III) of such section.
    ``(F) Risk adjustment.--The Secretary shall risk
    adjust rebates to grandfathered enrollees under this
    subsection in the same manner as the Secretary risk
    adjusts beneficiary rebates described in section
    1854(b)(1)(C).
    ``(4) Definition of grandfathered enrollee.--In this
    subsection, the term `grandfathered enrollee' means an
    individual who is enrolled (effective as of the date of
    enactment of this subsection) in an MA local plan in an area
    that is identified by the Secretary under paragraph (1).''.

    (h) Transitional Extra Benefits.--Section 1853 of the Social
    Security Act (42 U.S.C. 1395w-23), as amended by subsections (f) and
    (g), is amended by adding at the end the following new subsection:
    ``(p) Transitional Extra Benefits.--
    ``(1) In general. <> --For years
    beginning with 2012, the Secretary shall provide transitional
    rebates under section 1854(b)(1)(C) for the provision of extra
    benefits (as specified by the Secretary) to enrollees described
    in paragraph (2).
    ``(2) Enrollees described.--An enrollee described in this
    paragraph is an individual who--
    ``(A) enrolls in an MA local plan in an applicable
    area; and
    ``(B) experiences a significant reduction in extra
    benefits described in clause (ii) of section
    1854(b)(1)(C) as a result of competitive bidding under
    this part (as determined by the Secretary).
    ``(3) Applicable areas. <> --In this
    subsection, the term `applicable area' means the following:
    ``(A) The 2 largest metropolitan statistical areas,
    if the Secretary determines that the total amount of
    such extra benefits for each enrollee for the month in
    those areas is greater than $100.
    ``(B) A county where--

    [[Page 453]]

    ``(i) the MA area-specific non-drug monthly
    benchmark amount for a month in 2011 is equal to
    the legacy urban floor amount (as described in
    subsection (c)(1)(B)(iii)), as determined by the
    Secretary for the area for 2011;
    ``(ii) the percentage of Medicare Advantage
    eligible beneficiaries in the county who are
    enrolled in an MA plan for 2009 is greater than 30
    percent (as determined by the Secretary); and
    ``(iii) average bids submitted by an MA
    organization under section 1854(a) for MA local
    plans in the county for 2011 are not greater than
    the adjusted average per capita cost for the year
    involved, determined under section 1876(a)(4), for
    the county for individuals who are not enrolled in
    an MA plan under this part for the year, but
    adjusted to exclude costs attributable to payments
    under section 1848(o), 1886(n), and 1886(h).
    ``(C) If the Secretary determines appropriate, a
    county contiguous to an area or county described in
    subparagraph (A) or (B), respectively.
    ``(4) Review of plan bids.--In the case of a bid submitted
    by an MA organization under section 1854(a) for an MA local plan
    in an applicable area, the Secretary shall review such bid in
    order to ensure that extra benefits (as specified by the
    Secretary) are provided to enrollees described in paragraph (2).
    ``(5) Funding. <> --The Secretary
    shall provide for the transfer from the Federal Hospital
    Insurance Trust Fund under section 1817 and the Federal
    Supplementary Medical Insurance Trust Fund established under
    section 1841, in such proportion as the Secretary determines
    appropriate, of an amount not to exceed $5,000,000,000 for the
    period of fiscal years 2012 through 2019 for the purpose of
    providing transitional rebates under section 1854(b)(1)(C) for
    the provision of extra benefits under this subsection.''.

    (i) Nonapplication of Competitive Bidding and Related Provisions and
    Clarification of MA Payment Area for PACE Programs.--
    (1) Nonapplication of competitive bidding and related
    provisions for pace programs.--Section 1894 of the Social
    Security Act (42 U.S.C. 1395eee) is amended--
    (A) by redesignating subsections (h) and (i) as
    subsections (i) and (j), respectively;
    (B) by inserting after subsection (g) the following
    new subsection:

    ``(h) Nonapplication of Competitive Bidding and Related Provisions
    Under Part C.--With respect to a PACE program under this section, the
    following provisions (and regulations relating to such provisions) shall
    not apply:
    ``(1) Section 1853(j)(1)(A)(i), relating to MA area-specific
    non-drug monthly benchmark amount being based on competitive
    bids.
    ``(2) Section 1853(d)(5), relating to the establishment of
    MA local plan service areas.
    ``(3) Section 1853(n), relating to the payment of
    performance bonuses.

    [[Page 454]]

    ``(4) Section 1853(o), relating to grandfathering
    supplemental benefits for current enrollees after implementation
    of competitive bidding.
    ``(5) Section 1853(p), relating to transitional extra
    benefits.''.
    (2) Special rule for ma payment area for pace programs.--
    Section 1853(d) of the Social Security Act (42 U.S.C. 1395w-
    23(d)), as amended by subsection (e), is amended by adding at
    the end the following new paragraph:
    ``(6) Special rule for ma payment area for pace
    programs. <> --For years beginning with
    2012, in the case of a PACE program under section 1894, the MA
    payment area shall be the MA local area (as defined in paragraph
    (2)).''.

    SEC. 3202. BENEFIT PROTECTION AND SIMPLIFICATION.

    (a) Limitation on Variation of Cost Sharing for Certain Benefits.--
    (1) In general.--Section 1852(a)(1)(B) of the Social
    Security Act (42 U.S.C. 1395w-22(a)(1)(B)) is amended--
    (A) in clause (i), by inserting ``, subject to
    clause (iii),'' after ``and B or''; and
    (B) by adding at the end the following new clauses:
    ``(iii) Limitation on variation of cost
    sharing for certain benefits.--Subject to clause
    (v), cost-sharing for services described in clause
    (iv) shall not exceed the cost-sharing required
    for those services under parts A and B.
    ``(iv) Services described.--The following
    services are described in this clause:
    ``(I) Chemotherapy administration
    services.
    ``(II) Renal dialysis services (as
    defined in section 1881(b)(14)(B)).
    ``(III) Skilled nursing care.
    ``(IV) Such other services that the
    Secretary determines appropriate
    (including services that the Secretary
    determines require a high level of
    predictability and transparency for
    beneficiaries).
    ``(v) Exception.--In the case of services
    described in clause (iv) for which there is no
    cost-sharing required under parts A and B, cost-
    sharing may be required for those services in
    accordance with clause (i).''.
    (2) <> Effective date.--The
    amendments made by this subsection shall apply to plan years
    beginning on or after January 1, 2011.

    (b) Application of Rebates, Performance Bonuses, and Premiums.--
    (1) Application of rebates.--Section 1854(b)(1)(C) of the
    Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)) is amended--
    (A) in clause (ii), by striking ``rebate.--A
    rebate'' and inserting ``rebate for plan years before
    2012.--For plan years before 2012, a rebate'';
    (B) by redesignating clauses (iii) and (iv) as
    clauses (iv) and (v); and
    (C) by inserting after clause (ii) the following new
    clause:
    ``(iii) Form of rebate for plan year 2012 and
    subsequent plan years. <> --For plan years beginning on or after
    January 1, 2012, a rebate required under

    [[Page 455]]

    this subparagraph may not be used for the purpose
    described in clause (ii)(III) and shall be
    provided through the application of the amount of
    the rebate in the following priority order:
    ``(I) First, to use the most
    significant share to meaningfully reduce
    cost-sharing otherwise applicable for
    benefits under the original medicare
    fee-for-service program under parts A
    and B and for qualified prescription
    drug coverage under part D, including
    the reduction of any deductibles,
    copayments, and maximum limitations on
    out-of-pocket expenses otherwise
    applicable. <> Any
    reduction of maximum limitations on out-
    of-pocket expenses under the preceding
    sentence shall apply to all benefits
    under the original medicare fee-for-
    service program option. The Secretary
    may provide guidance on meaningfully
    reducing cost-sharing under this
    subclause, except that such guidance may
    not require a particular amount of cost-
    sharing or reduction in cost-sharing.
    ``(II) Second, to use the next most
    significant share to meaningfully
    provide coverage of preventive and
    wellness health care benefits (as
    defined by the Secretary) which are not
    benefits under the original medicare
    fee-for-service program, such as smoking
    cessation, a free flu shot, and an
    annual physical examination.
    ``(III) Third, to use the remaining
    share to meaningfully provide coverage
    of other health care benefits which are
    not benefits under the original medicare
    fee-for-service program, such as eye
    examinations and dental coverage, and
    are not benefits described in subclause
    (II).''.
    (2) Application of performance bonuses.--Section 1853(n) of
    the Social Security Act, as added by section 3201(f), is amended
    by adding at the end the following new paragraph:
    ``(6) <> Application of performance
    bonuses.--For plan years beginning on or after January 1, 2014,
    any performance bonus paid to an MA plan under this subsection
    shall be used for the purposes, and in the priority order,
    described in subclauses (I) through (III) of section
    1854(b)(1)(C)(iii).''.
    (3) Application of ma monthly supplementary beneficiary
    premium.--Section 1854(b)(2)(C) of the Social Security Act (42
    U.S.C. 1395w-24(b)(2)(C)) is amended--
    (A) by striking ``Premium.--The term'' and inserting
    ``premium.--
    ``(i) In general.--The term''; and
    (B) by adding at the end the following new clause:
    ``(ii) Application of ma monthly supplementary
    beneficiary premium. <> --
    For plan years beginning on or after January 1,
    2012, any MA monthly supplementary beneficiary
    premium charged to an individual enrolled in an MA
    plan shall be used for the purposes, and in the
    priority order, described in subclauses (I)
    through (III) of paragraph (1)(C)(iii).''.

    [[Page 456]]

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

    Section 1853(a)(1)(C) of the Social Security Act (42 U.S.C. 1395w-
    23(a)(1)(C)) is amended by adding at the end the following new clause:
    ``(iii) Application of coding intensity
    adjustment for 2011 and subsequent years.--
    ``(I) Requirement to apply in 2011
    through 2013.--In order to ensure
    payment accuracy, the Secretary shall
    conduct an analysis of the differences
    described in clause (ii)(I). The
    Secretary shall ensure that the results
    of such analysis are incorporated into
    the risk scores for 2011, 2012, and
    2013.
    ``(II) Authority to apply in 2014
    and subsequent years.--The Secretary
    may, as appropriate, incorporate the
    results of such analysis into the risk
    scores for 2014 and subsequent years.''.

    SEC. 3204. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

    (a) Annual 45-day Period for Disenrollment From MA Plans To Elect To
    Receive Benefits Under the Original Medicare Fee-for-service Program.--
    (1) In general.--Section 1851(e)(2)(C) of the Social
    Security Act <> (42 U.S.C. 1395w-
    1(e)(2)(C)) is amended to read as follows:
    ``(C) Annual 45-day period for disenrollment from ma
    plans to elect to receive benefits under the original
    medicare fee-for-service program. <> --Subject to subparagraph (D), at any time
    during the first 45 days of a year (beginning with
    2011), an individual who is enrolled in a Medicare
    Advantage plan may change the election under subsection
    (a)(1), but only with respect to coverage under the
    original medicare fee-for-service program under parts A
    and B, and may elect qualified prescription drug
    coverage in accordance with section 1860D-1.''.
    (2) <> Effective date.--The
    amendment made by paragraph (1) shall apply with respect to 2011
    and succeeding years.

    (b) Timing of the Annual, Coordinated Election Period Under Parts C
    and D.--Section 1851(e)(3)(B) of the Social Security Act <> (42 U.S.C. 1395w-1(e)(3)(B)) is amended--
    (1) in clause (iii), by striking ``and'' at the end;
    (2) in clause (iv)--
    (A) by striking ``and succeeding years'' and
    inserting ``, 2008, 2009, and 2010''; and
    (B) by striking the period at the end and inserting
    ``; and''; and
    (3) by adding at the end the following new clause:
    ``(v) with respect to 2012 and succeeding
    years, the period beginning on October 15 and
    ending on December 7 of the year before such
    year.''.

    [[Page 457]]

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

    (a) Extension of SNP Authority.--Section 1859(f)(1) of the Social
    Security Act (42 U.S.C. 1395w-28(f)(1)), as amended by section 164(a) of
    the Medicare Improvements for Patients and Providers Act of 2008 (Public
    Law 110-275), is amended by striking ``2011'' and inserting ``2014''.
    (b) Authority To Apply Frailty Adjustment Under PACE Payment
    Rules.--Section 1853(a)(1)(B) of the Social Security Act (42 U.S.C.
    1395w-23(a)(1)(B)) is amended by adding at the end the following new
    clause:
    ``(iv) Authority to apply frailty adjustment
    under pace payment rules for certain specialized
    ma plans for special needs individuals.--
    ``(I) In general.--Notwithstanding
    the preceding provisions of this
    paragraph, for plan year 2011 and
    subsequent plan years, in the case of a
    plan described in subclause (II), the
    Secretary may apply the payment rules
    under section 1894(d) (other than
    paragraph (3) of such section) rather
    than the payment rules that would
    otherwise apply under this part, but
    only to the extent necessary to reflect
    the costs of treating high
    concentrations of frail individuals.
    ``(II) Plan described.--A plan
    described in this subclause is a
    specialized MA plan for special needs
    individuals described in section
    1859(b)(6)(B)(ii) that is fully
    integrated with capitated contracts with
    States for Medicaid benefits, including
    long-term care, and that have similar
    average levels of frailty (as determined
    by the Secretary) as the PACE
    program.''.

    (c) Transition and Exception Regarding Restriction on Enrollment.--
    Section 1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)) is
    amended by adding at the end the following new paragraph:
    ``(6) Transition and exception regarding restriction on
    enrollment.--
    ``(A) In general. <> --Subject to
    subparagraph (C), the Secretary shall establish
    procedures for the transition of applicable individuals
    to--
    ``(i) a Medicare Advantage plan that is not a
    specialized MA plan for special needs individuals
    (as defined in subsection (b)(6)); or
    ``(ii) the original medicare fee-for-service
    program under parts A and B.
    ``(B) Applicable
    individuals. <> --For purposes of
    clause (i), the term `applicable individual' means an
    individual who--
    ``(i) is enrolled under a specialized MA plan
    for special needs individuals (as defined in
    subsection (b)(6)); and
    ``(ii) is not within the 1 or more of the
    classes of special needs individuals to which
    enrollment under the plan is restricted to.
    ``(C) Exception.--The Secretary shall provide for an
    exception to the transition described in subparagraph
    (A)

    [[Page 458]]

    for a limited period of time for individuals enrolled
    under a specialized MA plan for special needs
    individuals described in subsection (b)(6)(B)(ii) who
    are no longer eligible for medical assistance under
    title XIX.
    ``(D) Timeline for initial
    transition. <> --The Secretary shall
    ensure that applicable individuals enrolled in a
    specialized MA plan for special needs individuals (as
    defined in subsection (b)(6)) prior to January 1, 2010,
    are transitioned to a plan or the program described in
    subparagraph (A) by not later than January 1, 2013.''.

    (d) Temporary Extension of Authority To Operate but No Service Area
    Expansion for Dual Special Needs Plans That Do Not Meet Certain
    Requirements.--Section 164(c)(2) of the Medicare Improvements for
    Patients and Providers Act of 2008 (Public Law 110-275) <>  is amended by striking ``December 31, 2010'' and
    inserting ``December 31, 2012''.

    (e) Authority To Require Special Needs Plans Be NCQA Approved.--
    Section 1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)), as
    amended by subsections (a) and (c), is amended--
    (1) in paragraph (2), by adding at the end the following new
    subparagraph:
    ``(C) If applicable, the plan meets the requirement
    described in paragraph (7).'';
    (2) in paragraph (3), by adding at the end the following new
    subparagraph:
    ``(E) If applicable, the plan meets the requirement
    described in paragraph (7).'';
    (3) in paragraph (4), by adding at the end the following new
    subparagraph:
    ``(C) If applicable, the plan meets the requirement
    described in paragraph (7).''; and
    (4) by adding at the end the following new paragraph:
    ``(7) Authority to require special needs plans be ncqa
    approved. <> --For 2012 and subsequent years,
    the Secretary shall require that a Medicare Advantage
    organization offering a specialized MA plan for special needs
    individuals be approved by the National Committee for Quality
    Assurance (based on standards established by the Secretary).''.

    (f) Risk Adjustment.--Section 1853(a)(1)(C) of the Social Security
    Act <> (42 U.S.C. 1395i-23(a)(1)(C)) is amended
    by adding at the end the following new clause:
    ``(iii) Improvements to risk adjustment for
    special needs individuals with chronic health
    conditions.--
    ``(I) In general.--For 2011 and
    subsequent years, for purposes of the
    adjustment under clause (i) with respect
    to individuals described in subclause
    (II), the Secretary shall use a risk
    score that reflects the known underlying
    risk profile and chronic health status
    of similar individuals. Such risk score
    shall be used instead of the default
    risk score for new enrollees in Medicare
    Advantage plans that are not specialized
    MA plans for special needs individuals
    (as defined in section 1859(b)(6)).
    ``(II) Individuals described.--An
    individual described in this subclause
    is a special needs individual described
    in subsection (b)(6)(B)(iii) who

    [[Page 459]]

    enrolls in a specialized MA plan for
    special needs individuals on or after
    January 1, 2011.
    ``(III) Evaluation.--For 2011 and
    periodically thereafter, the Secretary
    shall evaluate and revise the risk
    adjustment system under this
    subparagraph in order to, as accurately
    as possible, account for higher medical
    and care coordination costs associated
    with frailty, individuals with multiple,
    comorbid chronic conditions, and
    individuals with a diagnosis of mental
    illness, and also to account for costs
    that may be associated with higher
    concentrations of beneficiaries with
    those conditions.
    ``(IV) Publication of evaluation and
    revisions.--The Secretary shall publish,
    as part of an announcement under
    subsection (b), a description of any
    evaluation conducted under subclause
    (III) during the preceding year and any
    revisions made under such subclause as a
    result of such evaluation.''.

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

    SEC. 3206. EXTENSION OF REASONABLE COST CONTRACTS.

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

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

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

    SEC. 3208. MAKING SENIOR HOUSING FACILITY DEMONSTRATION PERMANENT.

    (a) In General.--Section 1859 of the Social Security Act (42 U.S.C.
    1395w-28) is amended by adding at the end the following new subsection:
    ``(g) Special Rules for Senior Housing Facility Plans.--
    ``(1) In general.--In the case of a Medicare Advantage
    senior housing facility plan described in paragraph (2),
    notwithstanding any other provision of this part to the contrary
    and in accordance with regulations of the Secretary, the service
    area of such plan may be limited to a senior housing facility in
    a geographic area.

    [[Page 460]]

    ``(2) Medicare advantage senior housing facility plan
    described.--For purposes of this subsection, a Medicare
    Advantage senior housing facility plan is a Medicare Advantage
    plan that--
    ``(A) restricts enrollment of individuals under this
    part to individuals who reside in a continuing care
    retirement community (as defined in section
    1852(l)(4)(B));
    ``(B) provides primary care services onsite and has
    a ratio of accessible physicians to beneficiaries that
    the Secretary determines is adequate;
    ``(C) provides transportation services for
    beneficiaries to specialty providers outside of the
    facility; and
    ``(D) has participated (as of December 31, 2009) in
    a demonstration project established by the Secretary
    under which such a plan was offered for not less than 1
    year.''.

    (b) Effective Date. <> --The amendment
    made by this section shall take effect on January 1, 2010, and shall
    apply to plan years beginning on or after such date.

    SEC. 3209. AUTHORITY TO DENY PLAN BIDS.

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

    (b) Application Under Part D.--Section 1860D-11(d) of such Act (42
    U.S.C. 1395w-111(d)) is amended by adding at the end the following new
    paragraph:
    ``(3) Rejection of bids. <> --
    Paragraph (5)(C) of section 1854(a) shall apply with respect to
    bids submitted by a PDP sponsor under subsection (b) in the same
    manner as such paragraph applies to bids submitted by an MA
    organization under such section 1854(a).''.

    (c) <> Effective Date.--The amendments
    made by this section shall apply to bids submitted for contract years
    beginning on or after January 1, 2011.

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

    (a) In General.--Section 1882 of the Social Security Act (42 U.S.C.
    1395ss) is amended by adding at the end the following new subsection:
    ``(y) Development of New Standards for Certain Medicare Supplemental
    Policies.--
    ``(1) In general.--The Secretary shall request the National
    Association of Insurance Commissioners to review and revise the
    standards for benefit packages described in paragraph (2) under
    subsection (p)(1), to otherwise update standards to include
    requirements for nominal cost sharing to encourage

    [[Page 461]]

    the use of appropriate physicians' services under part B. Such
    revisions shall be based on evidence published in peer-reviewed
    journals or current examples used by integrated delivery systems
    and made consistent with the rules applicable under subsection
    (p)(1)(E) with the reference to the `1991 NAIC Model Regulation'
    deemed a reference to the NAIC Model Regulation as published in
    the Federal Register on December 4, 1998, and as subsequently
    updated by the National Association of Insurance Commissioners
    to reflect previous changes in law and the reference to `date of
    enactment of this subsection' deemed a reference to the date of
    enactment of the Patient Protection and Affordable Care
    Act. <> To the extent practicable, such
    revision shall provide for the implementation of revised
    standards for benefit packages as of January 1, 2015.
    ``(2) Benefit packages described.--The benefit packages
    described in this paragraph are benefit packages classified as
    `C' and `F'.''.

    (b) Conforming Amendment.--Section 1882(o)(1) of the Social Security
    Act (42 U.S.C. 1395ss(o)(1)) is amended by striking ``, and (w)'' and
    inserting ``(w), and (y)''.

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

    SEC. 3301. MEDICARE COVERAGE GAP DISCOUNT PROGRAM.

    (a) Condition for Coverage of Drugs Under Part D.--Part D of Title
    XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.), is
    amended by adding at the end the following new section:

    ``condition for coverage of drugs under this part

    ``Sec. 1860D-43. <>  (a) In
    General.--In order for coverage to be available under this part for
    covered part D drugs (as defined in section 1860D-2(e)) of a
    manufacturer, the manufacturer must--
    ``(1) participate in the Medicare coverage gap discount
    program under section 1860D-14A;
    ``(2) have entered into and have in effect an agreement
    described in subsection (b) of such section with the Secretary;
    and
    ``(3) have entered into and have in effect, under terms and
    conditions specified by the Secretary, a contract with a third
    party that the Secretary has entered into a contract with under
    subsection (d)(3) of such section.

    ``(b) Effective Date.--Subsection (a) shall apply to covered part D
    drugs dispensed under this part on or after July 1, 2010.
    ``(c) Authorizing Coverage for Drugs Not Covered Under Agreements.--
    Subsection (a) shall not apply to the dispensing of a covered part D
    drug if--
    ``(1) <> the Secretary has made a
    determination that the availability of the drug is essential to
    the health of beneficiaries under this part; or

    [[Page 462]]

    ``(2) <> the Secretary
    determines that in the period beginning on July 1, 2010, and
    ending on December 31, 2010, there were extenuating
    circumstances.

    ``(d) Definition of Manufacturer.--In this section, the term
    `manufacturer' has the meaning given such term in section 1860D-
    14A(g)(5).''.
    (b) Medicare Coverage Gap Discount Program.--Part D of title XVIII
    of the Social Security Act (42 U.S.C. 1395w-101) is amended by inserting
    after section 1860D-14 the following new section:

    ``medicare coverage gap discount program

    ``Sec. 1860D-14A.  <> (a)
    Establishment.--The Secretary shall establish a Medicare coverage gap
    discount program (in this section referred to as the `program') by not
    later than July 1, 2010. <> Under the program, the
    Secretary shall enter into agreements described in subsection (b) with
    manufacturers and provide for the performance of the duties described in
    subsection (c)(1). The Secretary shall establish a model agreement for
    use under the program by not later than April 1, 2010, in consultation
    with manufacturers, and allow for comment on such model agreement.

    ``(b) Terms of Agreement.--
    ``(1) In general.--
    ``(A) Agreement.--An agreement under this section
    shall require the manufacturer to provide applicable
    beneficiaries access to discounted prices for applicable
    drugs of the manufacturer.
    ``(B) Provision of discounted prices at the point-
    of-sale.--Except as provided in subsection
    (c)(1)(A)(iii), such discounted prices shall be provided
    to the applicable beneficiary at the pharmacy or by the
    mail order service at the point-of-sale of an applicable
    drug.
    ``(C) <>  Timing of agreement.--
    ``(i) Special rule for 2010 and 2011.--In
    order for an agreement with a manufacturer to be
    in effect under this section with respect to the
    period beginning on July 1, 2010, and ending on
    December 31, 2011, the manufacturer shall enter
    into such agreement not later than May 1, 2010.
    ``(ii) 2012 and subsequent years.--In order
    for an agreement with a manufacturer to be in
    effect under this section with respect to plan
    year 2012 or a subsequent plan year, the
    manufacturer shall enter into such agreement (or
    such agreement shall be renewed under paragraph
    (4)(A)) not later than January 30 of the preceding
    year.
    ``(2) Provision of appropriate
    data. <> --Each manufacturer with an
    agreement in effect under this section shall collect and have
    available appropriate data, as determined by the Secretary, to
    ensure that it can demonstrate to the Secretary compliance with
    the requirements under the program.
    ``(3) Compliance with requirements for administration of
    program.--Each manufacturer with an agreement in effect under
    this section shall comply with requirements imposed by the
    Secretary or a third party with a contract under subsection
    (d)(3), as applicable, for purposes of administering the

    [[Page 463]]

    program, including any determination under clause (i) of
    subsection (c)(1)(A) or procedures established under such
    subsection (c)(1)(A).
    ``(4) Length of agreement.--
    ``(A) In general. <> --An
    agreement under this section shall be effective for an
    initial period of not less than 18 months and shall be
    automatically renewed for a period of not less than 1
    year unless terminated under subparagraph (B).
    ``(B) Termination.--
    ``(i) By the secretary.--The Secretary may
    provide for termination of an agreement under this
    section for a knowing and willful violation of the
    requirements of the agreement or other good cause
    shown. <> Such termination shall
    not be effective earlier than 30 days after the
    date of notice to the manufacturer of such
    termination. The Secretary shall provide, upon
    request, a manufacturer with a hearing concerning
    such a termination, and such hearing shall take
    place prior to the effective date of the
    termination with sufficient time for such
    effective date to be repealed if the Secretary
    determines appropriate.
    ``(ii) By a manufacturer.--A manufacturer may
    terminate an agreement under this section for any
    reason. Any such termination shall be effective,
    with respect to a plan year--
    ``(I) if the termination occurs
    before January 30 of a plan year, as of
    the day after the end of the plan year;
    and
    ``(II) if the termination occurs on
    or after January 30 of a plan year, as
    of the day after the end of the
    succeeding plan year.
    ``(iii) Effectiveness of termination.--Any
    termination under this subparagraph shall not
    affect discounts for applicable drugs of the
    manufacturer that are due under the agreement
    before the effective date of its termination.
    ``(iv) Notice to third
    party. <> --The Secretary shall
    provide notice of such termination to a third
    party with a contract under subsection (d)(3)
    within not less than 30 days before the effective
    date of such termination.

    ``(c) Duties Described and Special Rule for Supplemental Benefits.--
    ``(1) Duties described.--The duties described in this
    subsection are the following:
    ``(A) Administration of
    program. <> --Administering the
    program, including--
    ``(i) <> the
    determination of the amount of the discounted
    price of an applicable drug of a manufacturer;
    ``(ii) except as provided in clause (iii), the
    establishment of procedures under which discounted
    prices are provided to applicable beneficiaries at
    pharmacies or by mail order service at the point-
    of-sale of an applicable drug;
    ``(iii) in the case where, during the period
    beginning on July 1, 2010, and ending on December
    31, 2011,

    [[Page 464]]

    it is not practicable to provide such discounted
    prices at the point-of-sale (as described in
    clause (ii)), the establishment of procedures to
    provide such discounted prices as soon as
    practicable after the point-of-sale;
    ``(iv) the establishment of procedures to
    ensure that, not later than the applicable number
    of calendar days after the dispensing of an
    applicable drug by a pharmacy or mail order
    service, the pharmacy or mail order service is
    reimbursed for an amount equal to the difference
    between--
    ``(I) the negotiated price of the
    applicable drug; and
    ``(II) the discounted price of the
    applicable drug;
    ``(v) the establishment of procedures to
    ensure that the discounted price for an applicable
    drug under this section is applied before any
    coverage or financial assistance under other
    health benefit plans or programs that provide
    coverage or financial assistance for the purchase
    or provision of prescription drug coverage on
    behalf of applicable beneficiaries as the
    Secretary may specify;
    ``(vi) the establishment of procedures to
    implement the special rule for supplemental
    benefits under paragraph (2); and
    ``(vii) providing a reasonable dispute
    resolution mechanism to resolve disagreements
    between manufacturers, applicable beneficiaries,
    and the third party with a contract under
    subsection (d)(3).
    ``(B) Monitoring compliance.--
    ``(i) In general.--The Secretary shall monitor
    compliance by a manufacturer with the terms of an
    agreement under this section.
    ``(ii) Notification.--If a third party with a
    contract under subsection (d)(3) determines that
    the manufacturer is not in compliance with such
    agreement, the third party shall notify the
    Secretary of such noncompliance for appropriate
    enforcement under subsection (e).
    ``(C) Collection of data from prescription drug
    plans and ma-pd plans.--The Secretary may collect
    appropriate data from prescription drug plans and MA-PD
    plans in a timeframe that allows for discounted prices
    to be provided for applicable drugs under this section.
    ``(2) Special rule for supplemental benefits.--For plan year
    2010 and each subsequent plan year, in the case where an
    applicable beneficiary has supplemental benefits with respect to
    applicable drugs under the prescription drug plan or MA-PD plan
    that the applicable beneficiary is enrolled in, the applicable
    beneficiary shall not be provided a discounted price for an
    applicable drug under this section until after such supplemental
    benefits have been applied with respect to the applicable drug.

    ``(d) Administration.--
    ``(1) In general.--Subject to paragraph (2), the Secretary
    shall provide for the implementation of this section, including
    the performance of the duties described in subsection (c)(1).

    [[Page 465]]

    ``(2) Limitation.--
    ``(A) In general.--Subject to subparagraph (B), in
    providing for such implementation, the Secretary shall
    not receive or distribute any funds of a manufacturer
    under the program.
    ``(B) Exception. <> --The limitation under
    subparagraph (A) shall not apply to the Secretary with
    respect to drugs dispensed during the period beginning
    on July 1, 2010, and ending on December 31, 2010, but
    only if the Secretary determines that the exception to
    such limitation under this subparagraph is necessary in
    order for the Secretary to begin implementation of this
    section and provide applicable beneficiaries timely
    access to discounted prices during such period.
    ``(3) Contract with third parties.--The Secretary shall
    enter into a contract with 1 or more third parties to administer
    the requirements established by the Secretary in order to carry
    out this section. At a minimum, the contract with a third party
    under the preceding sentence shall require that the third
    party--
    ``(A) receive and transmit information between the
    Secretary, manufacturers, and other individuals or
    entities the Secretary determines appropriate;
    ``(B) receive, distribute, or facilitate the
    distribution of funds of manufacturers to appropriate
    individuals or entities in order to meet the obligations
    of manufacturers under agreements under this section;
    ``(C) provide adequate and timely information to
    manufacturers, consistent with the agreement with the
    manufacturer under this section, as necessary for the
    manufacturer to fulfill its obligations under this
    section; and
    ``(D) permit manufacturers to conduct periodic
    audits, directly or through contracts, of the data and
    information used by the third party to determine
    discounts for applicable drugs of the manufacturer under
    the program.
    ``(4) Performance requirements.--The Secretary shall
    establish performance requirements for a third party with a
    contract under paragraph (3) and safeguards to protect the
    independence and integrity of the activities carried out by the
    third party under the program under this section.
    ``(5) Implementation.--The Secretary may implement the
    program under this section by program instruction or otherwise.
    ``(6) Administration.--Chapter 35 of title 44, United States
    Code, shall not apply to the program under this section.

    ``(e) Enforcement.--
    ``(1) Audits.--Each manufacturer with an agreement in effect
    under this section shall be subject to periodic audit by the
    Secretary.
    ``(2) Civil money penalty.--
    ``(A) In general. <> --The
    Secretary shall impose a civil money penalty on a
    manufacturer that fails to provide applicable
    beneficiaries discounts for applicable drugs of the
    manufacturer in accordance with such agreement for each
    such failure in an amount the Secretary determines is
    commensurate with the sum of--

    [[Page 466]]

    ``(i) the amount that the manufacturer would
    have paid with respect to such discounts under the
    agreement, which will then be used to pay the
    discounts which the manufacturer had failed to
    provide; and
    ``(ii) 25 percent of such amount.
    ``(B) Application.--The provisions of section 1128A
    (other than subsections (a) and (b)) shall apply to a
    civil money penalty under this paragraph in the same
    manner as such provisions apply to a penalty or
    proceeding under section 1128A(a).

    ``(f) Clarification Regarding Availability of Other Covered Part D
    Drugs.--Nothing in this section shall prevent an applicable beneficiary
    from purchasing a covered part D drug that is not an applicable drug
    (including a generic drug or a drug that is not on the formulary of the
    prescription drug plan or MA-PD plan that the applicable beneficiary is
    enrolled in).
    ``(g) Definitions.--In this section:
    ``(1) Applicable beneficiary.--The term `applicable
    beneficiary' means an individual who, on the date of dispensing
    an applicable drug--
    ``(A) is enrolled in a prescription drug plan or an
    MA-PD plan;
    ``(B) is not enrolled in a qualified retiree
    prescription drug plan;
    ``(C) is not entitled to an income-related subsidy
    under section 1860D-14(a);
    ``(D) is not subject to a reduction in premium
    subsidy under section 1839(i); and
    ``(E) who--
    ``(i) has reached or exceeded the initial
    coverage limit under section 1860D-2(b)(3) during
    the year; and
    ``(ii) has not incurred costs for covered part
    D drugs in the year equal to the annual out-of-
    pocket threshold specified in section 1860D-
    2(b)(4)(B).
    ``(2) Applicable drug.--The term `applicable drug' means,
    with respect to an applicable beneficiary, a covered part D
    drug--
    ``(A) approved under a new drug application under
    section 505(b) of the Federal Food, Drug, and Cosmetic
    Act or, in the case of a biologic product, licensed
    under section 351 of the Public Health Service Act
    (other than a product licensed under subsection (k) of
    such section 351); and
    ``(B)(i) if the PDP sponsor of the prescription drug
    plan or the MA organization offering the MA-PD plan uses
    a formulary, which is on the formulary of the
    prescription drug plan or MA-PD plan that the applicable
    beneficiary is enrolled in;
    ``(ii) if the PDP sponsor of the prescription drug
    plan or the MA organization offering the MA-PD plan does
    not use a formulary, for which benefits are available
    under the prescription drug plan or MA-PD plan that the
    applicable beneficiary is enrolled in; or
    ``(iii) is provided through an exception or appeal.
    ``(3) Applicable number of calendar days.--The term
    `applicable number of calendar days' means--

    [[Page 467]]

    ``(A) with respect to claims for reimbursement
    submitted electronically, 14 days; and
    ``(B) with respect to claims for reimbursement
    submitted otherwise, 30 days.
    ``(4) Discounted price.--
    ``(A) In general.--The term `discounted price' means
    50 percent of the negotiated price of the applicable
    drug of a manufacturer.
    ``(B) Clarification.--Nothing in this section shall
    be construed as affecting the responsibility of an
    applicable beneficiary for payment of a dispensing fee
    for an applicable drug.
    ``(C) Special case for certain claims.--In the case
    where the entire amount of the negotiated price of an
    individual claim for an applicable drug with respect to
    an applicable beneficiary does not fall at or above the
    initial coverage limit under section 1860D-2(b)(3) and
    below the annual out-of-pocket threshold specified in
    section 1860D-2(b)(4)(B) for the year, the manufacturer
    of the applicable drug shall provide the discounted
    price under this section on only the portion of the
    negotiated price of the applicable drug that falls at or
    above such initial coverage limit and below such annual
    out-of-pocket threshold.
    ``(5) Manufacturer.--The term `manufacturer' means any
    entity which is engaged in the production, preparation,
    propagation, compounding, conversion, or processing of
    prescription drug products, either directly or indirectly by
    extraction from substances of natural origin, or independently
    by means of chemical synthesis, or by a combination of
    extraction and chemical synthesis. Such term does not include a
    wholesale distributor of drugs or a retail pharmacy licensed
    under State law.
    ``(6) Negotiated price.--The term `negotiated price' has the
    meaning given such term in section 423.100 of title 42, Code of
    Federal Regulations (as in effect on the date of enactment of
    this section), except that such negotiated price shall not
    include any dispensing fee for the applicable drug.
    ``(7) Qualified retiree prescription drug plan.--The term
    `qualified retiree prescription drug plan' has the meaning given
    such term in section 1860D-22(a)(2).''.

    (c) Inclusion in Incurred Costs.--
    (1) In general.--Section 1860D-2(b)(4) of the Social
    Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
    (A) in subparagraph (C), in the matter preceding
    clause (i), by striking ``In applying'' and inserting
    ``Except as provided in subparagraph (E), in applying'';
    and
    (B) by adding at the end the following new
    subparagraph:
    ``(E) Inclusion of costs of applicable drugs under
    medicare coverage gap discount program.--In applying
    subparagraph (A), incurred costs shall include the
    negotiated price (as defined in paragraph (6) of section
    1860D-14A(g)) of an applicable drug (as defined in
    paragraph (2) of such section) of a manufacturer that is
    furnished to an applicable beneficiary (as defined in
    paragraph (1) of such section) under the Medicare
    coverage gap discount

    [[Page 468]]

    program under section 1860D-14A, regardless of whether
    part of such costs were paid by a manufacturer under
    such program.''.
    (2) Effective date. <> --The
    amendments made by this subsection shall apply to costs incurred
    on or after July 1, 2010.

    (d) Conforming Amendment Permitting Prescription Drug Discounts.--
    (1) In general.--Section 1128B(b)(3) of the Social Security
    Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
    (A) by striking ``and'' at the end of subparagraph
    (G);
    (B) in the subparagraph (H) added by section 237(d)
    of the Medicare Prescription Drug, Improvement, and
    Modernization Act of 2003 (Public Law 108-173; 117 Stat.
    2213)--
    (i) by moving such subparagraph 2 ems to the
    left; and
    (ii) by striking the period at the end and
    inserting a semicolon;
    (C) in the subparagraph (H) added by section 431(a)
    of such Act (117 Stat. 2287)--
    (i) by redesignating such subparagraph as
    subparagraph (I);
    (ii) by moving such subparagraph 2 ems to the
    left; and
    (iii) by striking the period at the end and
    inserting ``; and''; and
    (D) by adding at the end the following new
    subparagraph:
    ``(J) a discount in the price of an applicable drug
    (as defined in paragraph (2) of section 1860D-14A(g)) of
    a manufacturer that is furnished to an applicable
    beneficiary (as defined in paragraph (1) of such
    section) under the Medicare coverage gap discount
    program under section 1860D-14A.''.
    (2) Conforming amendment to definition of best price under
    medicaid.--Section 1927(c)(1)(C)(i)(VI) of the Social Security
    Act (42 U.S.C. 1396r-8(c)(1)(C)(i)(VI)) is amended by inserting
    ``, or any discounts provided by manufacturers under the
    Medicare coverage gap discount program under section 1860D-14A''
    before the period at the end.
    (3) <> Effective date.--The
    amendments made by this subsection shall apply to drugs
    dispensed on or after July 1, 2010.

    SEC. 3302. IMPROVEMENT IN DETERMINATION OF MEDICARE PART D LOW-INCOME
    BENCHMARK PREMIUM.

    (a) In General.--Section 1860D-14(b)(2)(B)(iii) of the Social
    Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by inserting
    ``, determined without regard to any reduction in such premium as a
    result of any beneficiary rebate under section 1854(b)(1)(C) or bonus
    payment under section 1853(n)'' before the period at the end.
    (b) <> Effective Date.--The amendment
    made by subsection (a) shall apply to premiums for months beginning on
    or after January 1, 2011.

    [[Page 469]]

    SEC. 3303. VOLUNTARY DE MINIMIS POLICY FOR SUBSIDY ELIGIBLE INDIVIDUALS
    UNDER PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-14(a) of the Social Security Act (42
    U.S.C. 1395w-114(a)) is amended by adding at the end the following new
    paragraph:
    ``(5) Waiver of de minimis
    premiums. <> --The Secretary shall, under
    procedures established by the Secretary, permit a prescription
    drug plan or an MA-PD plan to waive the monthly beneficiary
    premium for a subsidy eligible individual if the amount of such
    premium is de minimis. If such premium is waived under the plan,
    the Secretary shall not reassign subsidy eligible individuals
    enrolled in the plan to other plans based on the fact that the
    monthly beneficiary premium under the plan was greater than the
    low-income benchmark premium amount.''.

    (b) Authorizing the Secretary To Auto-enroll Subsidy Eligible
    Individuals in Plans That Waive De Minimis Premiums.--Section 1860D-
    1(b)(1) of the Social Security Act (42 U.S.C. 1395w-101(b)(1)) is
    amended--
    (1) in subparagraph (C), by inserting ``except as provided
    in subparagraph (D),'' after ``shall include,''
    (2) by adding at the end the following new subparagraph:
    ``(D) Special rule for plans that waive de minimis
    premiums.--The process established under subparagraph
    (A) may include, in the case of a part D eligible
    individual who is a subsidy eligible individual (as
    defined in section 1860D-14(a)(3)) who has failed to
    enroll in a prescription drug plan or an MA-PD plan, for
    the enrollment in a prescription drug plan or MA-PD plan
    that has waived the monthly beneficiary premium for such
    subsidy eligible individual under section 1860D-
    14(a)(5). If there is more than one such plan available,
    the Secretary shall enroll such an individual under the
    preceding sentence on a random basis among all such
    plans in the PDP region. Nothing in the previous
    sentence shall prevent such an individual from declining
    or changing such enrollment.''.

    (c) <> Effective Date.--The amendments
    made by this subsection shall apply to premiums for months, and
    enrollments for plan years, beginning on or after January 1, 2011.

    SEC. 3304. SPECIAL RULE FOR WIDOWS AND WIDOWERS REGARDING ELIGIBILITY
    FOR LOW-INCOME ASSISTANCE.

    (a) In General.--Section 1860D-14(a)(3)(B) of the Social Security
    Act (42 U.S.C. 1395w-114(a)(3)(B)) is amended by adding at the end the
    following new clause:
    ``(vi) Special rule for widows and widowers.--
    Notwithstanding the preceding provisions of this
    subparagraph, in the case of an individual whose
    spouse dies during the effective period for a
    determination or redetermination that has been
    made under this subparagraph, such effective
    period shall be extended through the date that is
    1 year after the date on which the determination
    or redetermination would (but for the application
    of this clause) otherwise cease to be
    effective.''.

    [[Page 470]]

    (b) <> Effective Date.--The amendment
    made by subsection (a) shall take effect on January 1, 2011.

    SEC. 3305. IMPROVED INFORMATION FOR SUBSIDY ELIGIBLE INDIVIDUALS
    REASSIGNED TO PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    Section 1860D-14 of the Social Security Act (42 U.S.C. 1395w-114) is
    amended--
    (1) by redesignating subsection (d) as subsection (e); and
    (2) by inserting after subsection (c) the following new
    subsection:

    ``(d) Facilitation of Reassignments. <> --
    Beginning not later than January 1, 2011, the Secretary shall, in the
    case of a subsidy eligible individual who is enrolled in one
    prescription drug plan and is subsequently reassigned by the Secretary
    to a new prescription drug plan, provide the individual, within 30 days
    of such reassignment, with--
    ``(1) information on formulary differences between the
    individual's former plan and the plan to which the individual is
    reassigned with respect to the individual's drug regimens; and
    ``(2) a description of the individual's right to request a
    coverage determination, exception, or reconsideration under
    section 1860D-4(g), bring an appeal under section 1860D-4(h), or
    resolve a grievance under section 1860D-4(f).''.

    SEC. 3306. FUNDING OUTREACH AND ASSISTANCE FOR LOW-INCOME PROGRAMS.

    (a) Additional Funding for State Health Insurance Programs.--
    Subsection (a)(1)(B) of section 119 of the Medicare Improvements for
    Patients and Providers Act of 2008 (42 U.S.C. 1395b-3 note) is amended
    by striking ``(42 U.S.C. 1395w-23(f))'' and all that follows through the
    period at the end and inserting ``(42 U.S.C. 1395w-23(f)), to the
    Centers for Medicare & Medicaid Services Program Management Account--
    ``(i) for fiscal year 2009, of $7,500,000; and
    ``(ii) for the period of fiscal years 2010
    through 2012, of $15,000,000.
    Amounts appropriated under this subparagraph shall
    remain available until expended.''.

    (b) Additional Funding for Area Agencies on Aging.--Subsection
    (b)(1)(B) of such section 119 is amended by striking ``(42 U.S.C. 1395w-
    23(f))'' and all that follows through the period at the end and
    inserting ``(42 U.S.C. 1395w-23(f)), to the Administration on Aging--
    ``(i) for fiscal year 2009, of $7,500,000; and
    ``(ii) for the period of fiscal years 2010
    through 2012, of $15,000,000.
    Amounts appropriated under this subparagraph shall
    remain available until expended.''.

    (c) Additional Funding for Aging and Disability Resource Centers.--
    Subsection (c)(1)(B) of such section 119 is amended by striking ``(42
    U.S.C. 1395w-23(f))'' and all that follows through the period at the end
    and inserting ``(42 U.S.C. 1395w-23(f)), to the Administration on
    Aging--
    ``(i) for fiscal year 2009, of $5,000,000; and
    ``(ii) for the period of fiscal years 2010
    through 2012, of $10,000,000.

    [[Page 471]]

    Amounts appropriated under this subparagraph shall
    remain available until expended.''.

    (d) Additional Funding for Contract With the National Center for
    Benefits and Outreach Enrollment.--Subsection (d)(2) of such section 119
    is amended by striking ``(42 U.S.C. 1395w-23(f))'' and all that follows
    through the period at the end and inserting ``(42 U.S.C. 1395w-23(f)),
    to the Administration on Aging--
    ``(i) for fiscal year 2009, of $5,000,000; and
    ``(ii) for the period of fiscal years 2010
    through 2012, of $5,000,000.
    Amounts appropriated under this subparagraph shall
    remain available until expended.''.

    (e) Secretarial Authority To Enlist Support in Conducting Certain
    Outreach Activities.--Such section 119 is amended by adding at the end
    the following new subsection:
    ``(g) Secretarial Authority To Enlist Support in Conducting Certain
    Outreach Activities.--The Secretary may request that an entity awarded a
    grant under this section support the conduct of outreach activities
    aimed at preventing disease and promoting wellness. Notwithstanding any
    other provision of this section, an entity may use a grant awarded under
    this subsection to support the conduct of activities described in the
    preceding sentence.''.

    SEC. 3307. IMPROVING FORMULARY REQUIREMENTS FOR PRESCRIPTION DRUG PLANS
    AND MA-PD PLANS WITH RESPECT TO CERTAIN CATEGORIES OR
    CLASSES OF DRUGS.

    (a) Improving Formulary Requirements.--Section 1860D-
    4(b)(3)(G) <> of the Social Security Act is
    amended to read as follows:
    ``(G) Required inclusion of drugs in certain
    categories and classes.--
    ``(i) Formulary requirements.--
    ``(I) In general.--Subject to
    subclause (II), a PDP sponsor offering a
    prescription drug plan shall be required
    to include all covered part D drugs in
    the categories and classes identified by
    the Secretary under clause (ii)(I).
    ``(II) Exceptions.--The Secretary
    may establish exceptions that permit a
    PDP sponsor offering a prescription drug
    plan to exclude from its formulary a
    particular covered part D drug in a
    category or class that is otherwise
    required to be included in the formulary
    under subclause (I) (or to otherwise
    limit access to such a drug, including
    through prior authorization or
    utilization management).
    ``(ii) Identification of drugs in certain
    categories and classes.--
    ``(I) In general.--Subject to clause
    (iv), the Secretary shall identify, as
    appropriate, categories and classes of
    drugs for which the Secretary determines
    are of clinical concern.
    ``(II) Criteria.--The Secretary
    shall use criteria established by the
    Secretary in making any determination
    under subclause (I).

    [[Page 472]]

    ``(iii) <>  Implementation.--The Secretary
    shall establish the criteria under clause (ii)(II)
    and any exceptions under clause (i)(II) through
    the promulgation of a regulation which includes a
    public notice and comment period.
    ``(iv) Requirement for certain categories and
    classes until criteria established.--Until such
    time as the Secretary establishes the criteria
    under clause (ii)(II) the following categories and
    classes of drugs shall be identified under clause
    (ii)(I):
    ``(I) Anticonvulsants.
    ``(II) Antidepressants.
    ``(III) Antineoplastics.
    ``(IV) Antipsychotics.
    ``(V) Antiretrovirals.
    ``(VI) Immunosuppressants for the
    treatment of transplant rejection.''.

    (b) <> Effective Date.--The amendments
    made by this section shall apply to plan year 2011 and subsequent plan
    years.

    SEC. 3308. REDUCING PART D PREMIUM SUBSIDY FOR HIGH-INCOME
    BENEFICIARIES.

    (a) Income-Related Increase in Part D Premium.--
    (1) In general.--Section 1860D-13(a) of the Social Security
    Act (42 U.S.C. 1395w-113(a)) is amended by adding at the end the
    following new paragraph:
    ``(7) Increase in base beneficiary premium based on
    income.--
    ``(A) In general.--In the case of an individual
    whose modified adjusted gross income exceeds the
    threshold amount applicable under paragraph (2) of
    section 1839(i) (including application of paragraph (5)
    of such section) for the calendar year, the monthly
    amount of the beneficiary premium applicable under this
    section for a month after December 2010 shall be
    increased by the monthly adjustment amount specified in
    subparagraph (B).
    ``(B) Monthly adjustment amount.--The monthly
    adjustment amount specified in this subparagraph for an
    individual for a month in a year is equal to the product
    of--
    ``(i) the quotient obtained by dividing--
    ``(I) the applicable percentage
    determined under paragraph (3)(C) of
    section 1839(i) (including application
    of paragraph (5) of such section) for
    the individual for the calendar year
    reduced by 25.5 percent; by
    ``(II) 25.5 percent; and
    ``(ii) the base beneficiary premium (as
    computed under paragraph (2)).
    ``(C) Modified adjusted gross income.--For purposes
    of this paragraph, the term `modified adjusted gross
    income' has the meaning given such term in subparagraph
    (A) of section 1839(i)(4), determined for the taxable
    year applicable under subparagraphs (B) and (C) of such
    section.
    ``(D) Determination by commissioner of social
    security.--The Commissioner of Social Security shall
    make any determination necessary to carry out the
    income-

    [[Page 473]]

    related increase in the base beneficiary premium under
    this paragraph.
    ``(E) <> Procedures to assure
    correct income-related increase in base beneficiary
    premium.--
    ``(i) Disclosure of base beneficiary
    premium.--Not later than September 15 of each year
    beginning with 2010, the Secretary shall disclose
    to the Commissioner of Social Security the amount
    of the base beneficiary premium (as computed under
    paragraph (2)) for the purpose of carrying out the
    income-related increase in the base beneficiary
    premium under this paragraph with respect to the
    following year.
    ``(ii) Additional disclosure.--Not later than
    October 15 of each year beginning with 2010, the
    Secretary shall disclose to the Commissioner of
    Social Security the following information for the
    purpose of carrying out the income-related
    increase in the base beneficiary premium under
    this paragraph with respect to the following year:
    ``(I) The modified adjusted gross
    income threshold applicable under
    paragraph (2) of section 1839(i)
    (including application of paragraph (5)
    of such section).
    ``(II) The applicable percentage
    determined under paragraph (3)(C) of
    section 1839(i) (including application
    of paragraph (5) of such section).
    ``(III) The monthly adjustment
    amount specified in subparagraph (B).
    ``(IV) Any other information the
    Commissioner of Social Security
    determines necessary to carry out the
    income-related increase in the base
    beneficiary premium under this
    paragraph.
    ``(F) Rule of construction.--The formula used to
    determine the monthly adjustment amount specified under
    subparagraph (B) shall only be used for the purpose of
    determining such monthly adjustment amount under such
    subparagraph.''.
    (2) Collection of monthly adjustment amount.--Section 1860D-
    13(c) of the Social Security Act (42 U.S.C. 1395w-113(c)) is
    amended--
    (A) in paragraph (1), by striking ``(2) and (3)''
    and inserting ``(2), (3), and (4)''; and
    (B) by adding at the end the following new
    paragraph:
    ``(4) Collection of monthly adjustment amount.--
    ``(A) In general.--Notwithstanding any provision of
    this subsection or section 1854(d)(2), subject to
    subparagraph (B), the amount of the income-related
    increase in the base beneficiary premium for an
    individual for a month (as determined under subsection
    (a)(7)) shall be paid through withholding from benefit
    payments in the manner provided under section 1840.
    ``(B) Agreements.--In the case where the monthly
    benefit payments of an individual that are withheld
    under subparagraph (A) are insufficient to pay the
    amount described in such subparagraph, the Commissioner
    of Social Security shall enter into agreements with the
    Secretary, the Director of the Office of Personnel
    Management,

    [[Page 474]]

    and the Railroad Retirement Board as necessary in order
    to allow other agencies to collect the amount described
    in subparagraph (A) that was not withheld under such
    subparagraph.''.

    (b) Conforming Amendments.--
    (1) Medicare.--Section 1860D-13(a)(1) of the Social Security
    Act (42 U.S.C. 1395w-113(a)(1)) is amended--
    (A) by redesignating subparagraph (F) as
    subparagraph (G);
    (B) in subparagraph (G), as redesignated by
    subparagraph (A), by striking ``(D) and (E)'' and
    inserting ``(D), (E), and (F)''; and
    (C) by inserting after subparagraph (E) the
    following new subparagraph:
    ``(F) Increase based on income.--The monthly
    beneficiary premium shall be increased pursuant to
    paragraph (7).''.
    (2) <> Internal revenue code.--Section
    6103(l)(20) of the Internal Revenue Code of 1986 (relating to
    disclosure of return information to carry out Medicare part B
    premium subsidy adjustment) is amended--
    (A) in the heading, by inserting ``and part d base
    beneficiary premium increase'' after ``part b premium
    subsidy adjustment'';
    (B) in subparagraph (A)--
    (i) in the matter preceding clause (i), by
    inserting ``or increase under section 1860D-
    13(a)(7)'' after ``1839(i)''; and
    (ii) in clause (vii), by inserting after
    ``subsection (i) of such section'' the following:
    ``or increase under section 1860D-13(a)(7) of such
    Act''; and
    (C) in subparagraph (B)--
    (i) by striking ``Return information'' and
    inserting the following:
    ``(i) In general.--Return information'';
    (ii) by inserting ``or increase under such
    section 1860D-13(a)(7)'' before the period at the
    end;
    (iii) as amended by clause (i), by inserting
    ``or for the purpose of resolving taxpayer appeals
    with respect to any such premium adjustment or
    increase'' before the period at the end; and
    (iv) by adding at the end the following new
    clause:
    ``(ii) Disclosure to other agencies.--
    Officers, employees, and contractors of the Social
    Security Administration may disclose--
    ``(I) the taxpayer identity
    information and the amount of the
    premium subsidy adjustment or premium
    increase with respect to a taxpayer
    described in subparagraph (A) to
    officers, employees, and contractors of
    the Centers for Medicare and Medicaid
    Services, to the extent that such
    disclosure is necessary for the
    collection of the premium subsidy amount
    or the increased premium amount,
    ``(II) the taxpayer identity
    information and the amount of the
    premium subsidy adjustment or the
    increased premium amount with respect to

    [[Page 475]]

    a taxpayer described in subparagraph (A)
    to officers and employees of the Office
    of Personnel Management and the Railroad
    Retirement Board, to the extent that
    such disclosure is necessary for the
    collection of the premium subsidy amount
    or the increased premium amount,
    ``(III) return information with
    respect to a taxpayer described in
    subparagraph (A) to officers and
    employees of the Department of Health
    and Human Services to the extent
    necessary to resolve administrative
    appeals of such premium subsidy
    adjustment or increased premium, and
    ``(IV) return information with
    respect to a taxpayer described in
    subparagraph (A) to officers and
    employees of the Department of Justice
    for use in judicial proceedings to the
    extent necessary to carry out the
    purposes described in clause (i).''.

    SEC. 3309. ELIMINATION OF COST SHARING FOR CERTAIN DUAL ELIGIBLE
    INDIVIDUALS.

    Section 1860D-14(a)(1)(D)(i) of the Social Security Act (42 U.S.C.
    1395w-114(a)(1)(D)(i)) is amended by inserting ``or, effective on a date
    specified by the Secretary (but in no case earlier than January 1,
    2012), who would be such an institutionalized individual or couple, if
    the full-benefit dual eligible individual were not receiving services
    under a home and community-based waiver authorized for a State under
    section 1115 or subsection (c) or (d) of section 1915 or under a State
    plan amendment under subsection (i) of such section or services provided
    through enrollment in a medicaid managed care organization with a
    contract under section 1903(m) or under section 1932'' after
    ``1902(q)(1)(B))''.

    SEC. 3310. REDUCING WASTEFUL DISPENSING OF OUTPATIENT PRESCRIPTION DRUGS
    IN LONG-TERM CARE FACILITIES UNDER PRESCRIPTION DRUG PLANS
    AND MA-PD PLANS.

    (a) In General.--Section 1860D-4(c) of the Social Security Act (42
    U.S.C. 1395w-104(c)) is amended by adding at the end the following new
    paragraph:
    ``(3) Reducing wasteful dispensing of outpatient
    prescription drugs in long-term care facilities.--The Secretary
    shall require PDP sponsors of prescription drug plans to utilize
    specific, uniform dispensing techniques, as determined by the
    Secretary, in consultation with relevant stakeholders (including
    representatives of nursing facilities, residents of nursing
    facilities, pharmacists, the pharmacy industry (including retail
    and long-term care pharmacy), prescription drug plans, MA-PD
    plans, and any other stakeholders the Secretary determines
    appropriate), such as weekly, daily, or automated dose
    dispensing, when dispensing covered part D drugs to enrollees
    who reside in a long-term care facility in order to reduce waste
    associated with 30-day fills.''.

    (b) <>  Effective Date.--The amendment
    made by subsection (a) shall apply to plan years beginning on or after
    January 1, 2012.

    SEC. 3311. <> IMPROVED MEDICARE PRESCRIPTION
    DRUG PLAN AND MA-PD PLAN COMPLAINT SYSTEM.

    (a) In General.--The Secretary shall develop and maintain a
    complaint system, that is widely known and easy to use, to

    [[Page 476]]

    collect and maintain information on MA-PD plan and prescription drug
    plan complaints that are received (including by telephone, letter, e-
    mail, or any other means) by the Secretary (including by a regional
    office of the Department of Health and Human Services, the Medicare
    Beneficiary Ombudsman, a subcontractor, a carrier, a fiscal
    intermediary, and a Medicare administrative contractor under section
    1874A of the Social Security Act (42 U.S.C. 1395kk)) through the date on
    which the complaint is resolved. The system shall be able to report and
    initiate appropriate interventions and monitoring based on substantial
    complaints and to guide quality improvement.
    (b) Model Electronic Complaint Form.--The Secretary shall develop a
    model electronic complaint form to be used for reporting plan complaints
    under the system. Such form shall be prominently displayed on the front
    page of the Medicare.gov Internet website and on the Internet website of
    the Medicare Beneficiary Ombudsman.
    (c) Annual Reports by the Secretary.--The Secretary shall submit to
    Congress annual reports on the system. Such reports shall include an
    analysis of the number and types of complaints reported in the system,
    geographic variations in such complaints, the timeliness of agency or
    plan responses to such complaints, and the resolution of such
    complaints.
    (d) Definitions.--In this section:
    (1) MA-PD plan.--The term ``MA-PD plan'' has the meaning
    given such term in section 1860D-41(a)(9) of such Act (42 U.S.C.
    1395w-151(a)(9)).
    (2) Prescription drug plan.--The term ``prescription drug
    plan'' has the meaning given such term in section 1860D-
    41(a)(14) of such Act (42 U.S.C. 1395w-151(a)(14)).
    (3) Secretary.--The term ``Secretary'' means the Secretary
    of Health and Human Services.
    (4) System.--The term ``system'' means the plan complaint
    system developed and maintained under subsection (a).

    SEC. 3312. UNIFORM EXCEPTIONS AND APPEALS PROCESS FOR PRESCRIPTION DRUG
    PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-4(b)(3) of the Social Security Act
    (42 U.S.C. 1395w-104(b)(3)) is amended by adding at the end the
    following new subparagraph:
    ``(H) Use of single, uniform exceptions and appeals
    process.--Notwithstanding any other provision of this
    part, each PDP sponsor of a prescription drug plan
    shall--
    ``(i) use a single, uniform exceptions and
    appeals process (including, to the extent the
    Secretary determines feasible, a single, uniform
    model form for use under such process) with
    respect to the determination of prescription drug
    coverage for an enrollee under the plan; and
    ``(ii) provide instant access to such process
    by enrollees through a toll-free telephone number
    and an Internet website.''.

    (b) <> Effective Date.--The amendment
    made by subsection (a) shall apply to exceptions and appeals on or after
    January 1, 2012.

    [[Page 477]]

    SEC. 3313. <> OFFICE OF THE INSPECTOR
    GENERAL STUDIES AND REPORTS.

    (a) Study and Annual Report on Part D Formularies' Inclusion of
    Drugs Commonly Used by Dual Eligibles.--
    (1) Study.--The Inspector General of the Department of
    Health and Human Services shall conduct a study of the extent to
    which formularies used by prescription drug plans and MA-PD
    plans under part D include drugs commonly used by full-benefit
    dual eligible individuals (as defined in section 1935(c)(6) of
    the Social Security Act (42 U.S.C. 1396u-5(c)(6))).
    (2) Annual reports.--Not later than July 1 of each year
    (beginning with 2011), the Inspector General shall submit to
    Congress a report on the study conducted under paragraph (1),
    together with such recommendations as the Inspector General
    determines appropriate.

    (b) Study and Report on Prescription Drug Prices Under Medicare Part
    D and Medicaid.--
    (1) Study.--
    (A) In general.--The Inspector General of the
    Department of Health and Human Services shall conduct a
    study on prices for covered part D drugs under the
    Medicare prescription drug program under part D of title
    XVIII of the Social Security Act and for covered
    outpatient drugs under title XIX. Such study shall
    include the following:
    (i) A comparison, with respect to the 200 most
    frequently dispensed covered part D drugs under
    such program and covered outpatient drugs under
    such title (as determined by the Inspector General
    based on volume and expenditures), of--
    (I) the prices paid for covered part
    D drugs by PDP sponsors of prescription
    drug plans and Medicare Advantage
    organizations offering MA-PD plans; and
    (II) the prices paid for covered
    outpatient drugs by a State plan under
    title XIX.
    (ii) An assessment of--
    (I) the financial impact of any
    discrepancies in such prices on the
    Federal Government; and
    (II) the financial impact of any
    such discrepancies on enrollees under
    part D or individuals eligible for
    medical assistance under a State plan
    under title XIX.
    (B) Price.--For purposes of subparagraph (A), the
    price of a covered part D drug or a covered outpatient
    drug shall include any rebate or discount under such
    program or such title, respectively, including any
    negotiated price concession described in section 1860D-
    2(d)(1)(B) of the Social Security Act (42 U.S.C. 1395w-
    102(d)(1)(B)) or rebate under an agreement under section
    1927 of the Social Security Act (42 U.S.C. 1396r-8).
    (C) Authority to collect any necessary
    information.--Notwithstanding any other provision of
    law, the Inspector General of the Department of Health
    and Human Services shall be able to collect any
    information related to the prices of covered part D
    drugs under such program

    [[Page 478]]

    and covered outpatient drugs under such title XIX
    necessary to carry out the comparison under subparagraph
    (A).
    (2) Report.--
    (A) In general.--Not later than October 1, 2011,
    subject to subparagraph (B), the Inspector General shall
    submit to Congress a report containing the results of
    the study conducted under paragraph (1), together with
    recommendations for such legislation and administrative
    action as the Inspector General determines appropriate.
    (B) Limitation on information contained in report.--
    The report submitted under subparagraph (A) shall not
    include any information that the Inspector General
    determines is proprietary or is likely to negatively
    impact the ability of a PDP sponsor or a State plan
    under title XIX to negotiate prices for covered part D
    drugs or covered outpatient drugs, respectively.
    (3) Definitions.--In this section:
    (A) Covered part d drug.--The term ``covered part D
    drug'' has the meaning given such term in section 1860D-
    2(e) of the Social Security Act (42 U.S.C. 1395w-
    102(e)).
    (B) Covered outpatient drug.--The term ``covered
    outpatient drug'' has the meaning given such term in
    section 1927(k) of such Act (42 U.S.C. 1396r(k)).
    (C) MA-PD plan.--The term ``MA-PD plan'' has the
    meaning given such term in section 1860D-41(a)(9) of
    such Act (42 U.S.C. 1395w-151(a)(9)).
    (D) Medicare advantage organization.--The term
    ``Medicare Advantage organization'' has the meaning
    given such term in section 1859(a)(1) of such Act (42
    U.S.C. 1395w-28)(a)(1)).
    (E) PDP sponsor.--The term ``PDP sponsor'' has the
    meaning given such term in section 1860D-41(a)(13) of
    such Act (42 U.S.C. 1395w-151(a)(13)).
    (F) Prescription drug plan.--The term ``prescription
    drug plan'' has the meaning given such term in section
    1860D-41(a)(14) of such Act (42 U.S.C. 1395w-
    151(a)(14)).

    SEC. 3314. INCLUDING COSTS INCURRED BY AIDS DRUG ASSISTANCE PROGRAMS AND
    INDIAN HEALTH SERVICE IN PROVIDING PRESCRIPTION DRUGS TOWARD
    THE ANNUAL OUT-OF-POCKET THRESHOLD UNDER PART D.

    (a) In General.--Section 1860D-2(b)(4)(C) of the Social Security Act
    (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
    (1) in clause (i), by striking ``and'' at the end;
    (2) in clause (ii)--
    (A) by striking ``such costs shall be treated as
    incurred only if'' and inserting ``subject to clause
    (iii), such costs shall be treated as incurred only
    if'';
    (B) by striking ``, under section 1860D-14, or under
    a State Pharmaceutical Assistance Program''; and
    (C) by striking the period at the end and inserting
    ``; and''; and
    (3) by inserting after clause (ii) the following new clause:
    ``(iii) such costs shall be treated as
    incurred and shall not be considered to be
    reimbursed under clause (ii) if such costs are
    borne or paid--

    [[Page 479]]

    ``(I) under section 1860D-14;
    ``(II) under a State Pharmaceutical
    Assistance Program;
    ``(III) by the Indian Health
    Service, an Indian tribe or tribal
    organization, or an urban Indian
    organization (as defined in section 4 of
    the Indian Health Care Improvement Act);
    or
    ``(IV) under an AIDS Drug Assistance
    Program under part B of title XXVI of
    the Public Health Service Act.''.

    (b) <> Effective Date.--The amendments
    made by subsection (a) shall apply to costs incurred on or after January
    1, 2011.

    SEC. 3315. IMMEDIATE REDUCTION IN COVERAGE GAP IN 2010.

    Section 1860D-2(b) of the Social Security Act (42 U.S.C. 1395w-
    102(b)) is amended--
    (1) in paragraph (3)(A), by striking ``paragraph (4)'' and
    inserting ``paragraphs (4) and (7)''; and
    (2) by adding at the end the following new paragraph:
    ``(7) Increase in initial coverage limit in 2010.--
    ``(A) <>  In general.--For
    the plan year beginning on January 1, 2010, the initial
    coverage limit described in paragraph (3)(B) otherwise
    applicable shall be increased by $500.
    ``(B) Application.--In applying subparagraph (A)--
    ``(i) except as otherwise provided in this
    subparagraph, there shall be no change in the
    premiums, bids, or any other parameters under this
    part or part C;
    ``(ii) costs that would be treated as incurred
    costs for purposes of applying paragraph (4) but
    for the application of subparagraph (A) shall
    continue to be treated as incurred costs;
    ``(iii) <> the Secretary
    shall establish procedures, which may include a
    reconciliation process, to fully reimburse PDP
    sponsors with respect to prescription drug plans
    and MA organizations with respect to MA-PD plans
    for the reduction in beneficiary cost sharing
    associated with the application of subparagraph
    (A);
    ``(iv) the Secretary shall develop an estimate
    of the additional increased costs attributable to
    the application of this paragraph for increased
    drug utilization and financing and administrative
    costs and shall use such estimate to adjust
    payments to PDP sponsors with respect to
    prescription drug plans under this part and MA
    organizations with respect to MA-PD plans under
    part C; and
    ``(v) <>  the Secretary
    shall establish procedures for retroactive
    reimbursement of part D eligible individuals who
    are covered under such a plan for costs which are
    incurred before the date of initial implementation
    of subparagraph (A) and which would be reimbursed
    under such a plan if such implementation occurred
    as of January 1, 2010.
    ``(C) <> No
    effect on subsequent years.--The increase under
    subparagraph (A) shall only apply with respect to the
    plan year beginning on January 1, 2010, and the initial
    coverage limit for plan years beginning on or after
    January

    [[Page 480]]

    1, 2011, shall be determined as if subparagraph (A) had
    never applied.''.

    Subtitle E--Ensuring Medicare Sustainability

    SEC. 3401. REVISION OF CERTAIN MARKET BASKET UPDATES AND INCORPORATION
    OF PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET UPDATES THAT
    DO NOT ALREADY INCORPORATE SUCH IMPROVEMENTS.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social
    Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section
    3001(a)(3), is further amended--
    (1) in clause (i)(XX), by striking ``clause (viii)'' and
    inserting ``clauses (viii), (ix), (xi), and (xii)'';
    (2) in the first sentence of clause (viii), by inserting
    ``of such applicable percentage increase (determined without
    regard to clause (ix), (xi), or (xii))'' after ``one-quarter'';
    (3) in the first sentence of clause (ix)(I), by inserting
    ``(determined without regard to clause (viii), (xi), or (xii))''
    after ``clause (i)'' the second time it appears; and
    (4) by adding at the end the following new clauses:

    ``(xi)(I) For 2012 and each subsequent fiscal year, after
    determining the applicable percentage increase described in clause (i)
    and after application of clauses (viii) and (ix), such percentage
    increase shall be reduced by the productivity adjustment described in
    subclause (II).
    ``(II) The productivity adjustment described in this subclause, with
    respect to a percentage, factor, or update for a fiscal year, year, cost
    reporting period, or other annual period, is a productivity adjustment
    equal to the 10-year moving average of changes in annual economy-wide
    private nonfarm business multi-factor productivity (as projected by the
    Secretary for the 10-year period ending with the applicable fiscal year,
    year, cost reporting period, or other annual period).
    ``(III) The application of subclause (I) may result in the
    applicable percentage increase described in clause (i) being less than
    0.0 for a fiscal year, and may result in payment rates under this
    section for a fiscal year being less than such payment rates for the
    preceding fiscal year.
    ``(xii) After determining the applicable percentage increase
    described in clause (i), and after application of clauses (viii), (ix),
    and (xi), the Secretary shall reduce such applicable percentage
    increase--
    ``(I) for each of fiscal years 2010 and 2011, by 0.25
    percentage point; and
    ``(II) subject to clause (xiii), for each of fiscal years
    2012 through 2019, by 0.2 percentage point.

    The application of this clause may result in the applicable percentage
    increase described in clause (i) being less than 0.0 for a fiscal year,
    and may result in payment rates under this section for a fiscal year
    being less than such payment rates for the preceding fiscal year.
    ``(xiii) <> Clause (xii) shall be applied with
    respect to any of fiscal years 2014 through 2019 by substituting `0.0
    percentage points' for `0.2 percentage point', if for such fiscal year--

    [[Page 481]]

    ``(I) the excess (if any) of--
    ``(aa) the total percentage of the non-elderly
    insured population for the preceding fiscal year (based
    on the most recent estimates available from the Director
    of the Congressional Budget Office before a vote in
    either House on the Patient Protection and Affordable
    Care Act that, if determined in the affirmative, would
    clear such Act for enrollment); over
    ``(bb) the total percentage of the non-elderly
    insured population for such preceding fiscal year (as
    estimated by the Secretary); exceeds
    ``(II) 5 percentage points.''.

    (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of the Social
    Security Act (42 U.S.C. 1395yy(e)(5)(B)) is amended--
    (1) by striking ``percentage.--The term'' and inserting
    ``percentage.--
    ``(i) In general.--Subject to clause (ii), the
    term''; and
    (2) by adding at the end the following new clause:
    ``(ii) Adjustment.--For fiscal year 2012 and
    each subsequent fiscal year, after determining the
    percentage described in clause (i), the Secretary
    shall reduce such percentage by the productivity
    adjustment described in section
    1886(b)(3)(B)(xi)(II). The application of the
    preceding sentence may result in such percentage
    being less than 0.0 for a fiscal year, and may
    result in payment rates under this subsection for
    a fiscal year being less than such payment rates
    for the preceding fiscal year.''.

    (c) Long-term Care Hospitals.--Section 1886(m) of the Social
    Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the
    following new paragraphs:
    ``(3) Implementation for rate year 2010 and subsequent
    years.--
    ``(A) In general.--In implementing the system
    described in paragraph (1) for rate year 2010 and each
    subsequent rate year, any annual update to a standard
    Federal rate for discharges for the hospital during the
    rate year, shall be reduced--
    ``(i) for rate year 2012 and each subsequent
    rate year, by the productivity adjustment
    described in section 1886(b)(3)(B)(xi)(II); and
    ``(ii) for each of rate years 2010 through
    2019, by the other adjustment described in
    paragraph (4).
    ``(B) Special rule.--The application of this
    paragraph may result in such annual update being less
    than 0.0 for a rate year, and may result in payment
    rates under the system described in paragraph (1) for a
    rate year being less than such payment rates for the
    preceding rate year.
    ``(4) Other adjustment.--
    ``(A) In general.--For purposes of paragraph
    (3)(A)(ii), the other adjustment described in this
    paragraph is--
    ``(i) for each of rate years 2010 and 2011,
    0.25 percentage point; and
    ``(ii) subject to subparagraph (B), for each
    of rate years 2012 through 2019, 0.2 percentage
    point.

    [[Page 482]]

    ``(B) Reduction of other adjustment.--Subparagraph
    (A)(ii) shall be applied with respect to any of rate
    years 2014 through 2019 by substituting `0.0 percentage
    points' for `0.2 percentage point', if for such rate
    year--
    ``(i) the excess (if any) of--
    ``(I) the total percentage of the
    non-elderly insured population for the
    preceding rate year (based on the most
    recent estimates available from the
    Director of the Congressional Budget
    Office before a vote in either House on
    the Patient Protection and Affordable
    Care Act that, if determined in the
    affirmative, would clear such Act for
    enrollment); over
    ``(II) the total percentage of the
    non-elderly insured population for such
    preceding rate year (as estimated by the
    Secretary); exceeds
    ``(ii) 5 percentage points.''.

    (d) Inpatient Rehabilitation Facilities.--Section 1886(j)(3) of the
    Social Security Act (42 U.S.C. 1395ww(j)(3)) is amended--
    (1) in subparagraph (C)--
    (A) by striking ``factor.--For purposes'' and
    inserting ``factor.--
    ``(i) In general.--For purposes'';
    (B) by inserting ``subject to clause (ii)'' before
    the period at the end of the first sentence of clause
    (i), as added by paragraph (1); and
    (C) by adding at the end the following new clause:
    ``(ii) Productivity and other adjustment.--
    After establishing the increase factor described
    in clause (i) for a fiscal year, the Secretary
    shall reduce such increase factor--
    ``(I) for fiscal year 2012 and each
    subsequent fiscal year, by the
    productivity adjustment described in
    section 1886(b)(3)(B)(xi)(II); and
    ``(II) for each of fiscal years 2010
    through 2019, by the other adjustment
    described in subparagraph (D).
    The application of this clause may result in the
    increase factor under this subparagraph being less
    than 0.0 for a fiscal year, and may result in
    payment rates under this subsection for a fiscal
    year being less than such payment rates for the
    preceding fiscal year.''; and
    (2) by adding at the end the following new subparagraph:
    ``(D) Other adjustment.--
    ``(i) In general.--For purposes of
    subparagraph (C)(ii)(II), the other adjustment
    described in this subparagraph is--
    ``(I) for each of fiscal years 2010
    and 2011, 0.25 percentage point; and
    ``(II) subject to clause (ii), for
    each of fiscal years 2012 through 2019,
    0.2 percentage point.
    ``(ii) <>  Reduction of
    other adjustment.--Clause (i)(II) shall be applied
    with respect to any of fiscal years 2014 through
    2019 by substituting `0.0 percentage points' for
    `0.2 percentage point', if for such fiscal year--

    [[Page 483]]

    ``(I) the excess (if any) of--
    ``(aa) the total percentage
    of the non-elderly insured
    population for the preceding
    fiscal year (based on the most
    recent estimates available from
    the Director of the
    Congressional Budget Office
    before a vote in either House on
    the Patient Protection and
    Affordable Care Act that, if
    determined in the affirmative,
    would clear such Act for
    enrollment); over
    ``(bb) the total percentage
    of the non-elderly insured
    population for such preceding
    fiscal year (as estimated by the
    Secretary); exceeds
    ``(II) 5 percentage points.''.

    (e) Home Health Agencies.--Section 1895(b)(3)(B) of the Social
    Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amended--
    (1) in clause (ii)(V), by striking ``clause (v)'' and
    inserting ``clauses (v) and (vi)''; and
    (2) by adding at the end the following new clause:
    ``(vi) Adjustments.--After determining the
    home health market basket percentage increase
    under clause (iii), and after application of
    clause (v), the Secretary shall reduce such
    percentage--
    ``(I) for 2015 and each subsequent
    year, by the productivity adjustment
    described in section
    1886(b)(3)(B)(xi)(II); and
    ``(II) for each of 2011 and 2012, by
    1 percentage point.
    The application of this clause may result in the
    home health market basket percentage increase
    under clause (iii) being less than 0.0 for a year,
    and may result in payment rates under the system
    under this subsection for a year being less than
    such payment rates for the preceding year.''.

    (f) Psychiatric Hospitals.--Section 1886 of the Social Security
    Act, <>  as amended by sections 3001, 3008, 3025,
    and 3133, is amended by adding at the end the following new subsection:

    ``(s) Prospective Payment for Psychiatric Hospitals.--
    ``(1) Reference to establishment and implementation of
    system.--For provisions related to the establishment and
    implementation of a prospective payment system for payments
    under this title for inpatient hospital services furnished by
    psychiatric hospitals (as described in clause (i) of subsection
    (d)(1)(B)) and psychiatric units (as described in the matter
    following clause (v) of such subsection), see section 124 of the
    Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
    1999.
    ``(2) Implementation for rate year beginning in 2010 and
    subsequent rate years.--
    ``(A) In general.--In implementing the system
    described in paragraph (1) for the rate year beginning
    in 2010 and any subsequent rate year, any update to a
    base rate for days during the rate year for a
    psychiatric hospital or unit, respectively, shall be
    reduced--

    [[Page 484]]

    ``(i) for the rate year beginning in 2012 and
    each subsequent rate year, by the productivity
    adjustment described in section
    1886(b)(3)(B)(xi)(II); and
    ``(ii) for each of the rate years beginning in
    2010 through 2019, by the other adjustment
    described in paragraph (3).
    ``(B) Special rule.--The application of this
    paragraph may result in such update being less than 0.0
    for a rate year, and may result in payment rates under
    the system described in paragraph (1) for a rate year
    being less than such payment rates for the preceding
    rate year.
    ``(3) Other adjustment.--
    ``(A) In general.--For purposes of paragraph
    (2)(A)(ii), the other adjustment described in this
    paragraph is--
    ``(i) for each of the rate years beginning in
    2010 and 2011, 0.25 percentage point; and
    ``(ii) subject to subparagraph (B), for each
    of the rate years beginning in 2012 through 2019,
    0.2 percentage point.
    ``(B) Reduction of other adjustment.--Subparagraph
    (A)(ii) shall be applied with respect to any of rate
    years 2014 through 2019 by substituting `0.0 percentage
    points' for `0.2 percentage point', if for such rate
    year--
    ``(i) the excess (if any) of--
    ``(I) the total percentage of the
    non-elderly insured population for the
    preceding rate year (based on the most
    recent estimates available from the
    Director of the Congressional Budget
    Office before a vote in either House on
    the Patient Protection and Affordable
    Care Act that, if determined in the
    affirmative, would clear such Act for
    enrollment); over
    ``(II) the total percentage of the
    non-elderly insured population for such
    preceding rate year (as estimated by the
    Secretary); exceeds
    ``(ii) 5 percentage points.''.

    (g) Hospice Care.--Section 1814(i)(1)(C) of the Social Security Act
    (42 U.S.C. 1395f(i)(1)(C)), as amended by section 3132, is amended by
    adding at the end the following new clauses:
    ``(iv) After determining the market basket percentage increase under
    clause (ii)(VII) or (iii), as applicable, with respect to fiscal year
    2013 and each subsequent fiscal year, the Secretary shall reduce such
    percentage--
    ``(I) for 2013 and each subsequent fiscal year, by the
    productivity adjustment described in section
    1886(b)(3)(B)(xi)(II); and
    ``(II) subject to clause (v), for each of fiscal years 2013
    through 2019, by 0.5 percentage point.

    The application of this clause may result in the market basket
    percentage increase under clause (ii)(VII) or (iii), as applicable,
    being less than 0.0 for a fiscal year, and may result in payment rates
    under this subsection for a fiscal year being less than such payment
    rates for the preceding fiscal year.
    ``(v) <> Clause (iv)(II) shall be applied with
    respect to any of fiscal years 2014 through 2019 by substituting `0.0
    percentage points' for `0.5 percentage point', if for such fiscal year--
    ``(I) the excess (if any) of--

    [[Page 485]]

    ``(aa) the total percentage of the non-elderly
    insured population for the preceding fiscal year (based
    on the most recent estimates available from the Director
    of the Congressional Budget Office before a vote in
    either House on the Patient Protection and Affordable
    Care Act that, if determined in the affirmative, would
    clear such Act for enrollment); over
    ``(bb) the total percentage of the non-elderly
    insured population for such preceding fiscal year (as
    estimated by the Secretary); exceeds
    ``(II) 5 percentage points.''.

    (h) Dialysis.--Section 1881(b)(14)(F) of the Social Security Act (42
    U.S.C. 1395rr(b)(14)(F)) is amended--
    (1) in clause (i)--
    (A) by inserting ``(I)'' after ``(F)(i)''
    (B) in subclause (I), as inserted by subparagraph
    (A)--
    (i) by striking ``clause (ii)'' and inserting
    ``subclause (II) and clause (ii)''; and
    (ii) by striking ``minus 1.0 percentage
    point''; and
    (C) by adding at the end the following new
    subclause:

    ``(II) For 2012 and each subsequent year, after determining the
    increase factor described in subclause (I), the Secretary shall reduce
    such increase factor by the productivity adjustment described in section
    1886(b)(3)(B)(xi)(II). The application of the preceding sentence may
    result in such increase factor being less than 0.0 for a year, and may
    result in payment rates under the payment system under this paragraph
    for a year being less than such payment rates for the preceding year.'';
    and
    (2) in clause (ii)(II)--
    (A) by striking ``The'' and inserting ``Subject to
    clause (i)(II), the''; and
    (B) by striking ``clause (i) minus 1.0 percentage
    point'' and inserting ``clause (i)(I)''.

    (i) Outpatient Hospitals.--Section 1833(t)(3) of the Social Security
    Act (42 U.S.C. 1395l(t)(3)) is amended--
    (1) in subparagraph (C)(iv), by inserting ``and subparagraph
    (F) of this paragraph'' after ``(17)''; and
    (2) by adding at the end the following new subparagraphs:
    ``(F) Productivity and other adjustment.--After
    determining the OPD fee schedule increase factor under
    subparagraph (C)(iv), the Secretary shall reduce such
    increase factor--
    ``(i) for 2012 and subsequent years, by the
    productivity adjustment described in section
    1886(b)(3)(B)(xi)(II); and
    ``(ii) for each of 2010 through 2019, by the
    adjustment described in subparagraph (G).
    The application of this subparagraph may result in the
    increase factor under subparagraph (C)(iv) being less
    than 0.0 for a year, and may result in payment rates
    under the payment system under this subsection for a
    year being less than such payment rates for the
    preceding year.
    ``(G) Other adjustment.--
    ``(i) Adjustment.--For purposes of
    subparagraph (F)(ii), the adjustment described in
    this subparagraph is--

    [[Page 486]]

    ``(I) for each of 2010 and 2011,
    0.25 percentage point; and
    ``(II) subject to clause (ii), for
    each of 2012 through 2019, 0.2
    percentage point.
    ``(ii) Reduction of other adjustment.--Clause
    (i)(II) shall be applied with respect to any of
    2014 through 2019 by substituting `0.0 percentage
    points' for `0.2 percentage point', if for such
    year--
    ``(I) the excess (if any) of--
    ``(aa) the total percentage
    of the non-elderly insured
    population for the preceding
    year (based on the most recent
    estimates available from the
    Director of the Congressional
    Budget Office before a vote in
    either House on the Patient
    Protection and Affordable Care
    Act that, if determined in the
    affirmative, would clear such
    Act for enrollment); over
    ``(bb) the total percentage
    of the non-elderly insured
    population for such preceding
    year (as estimated by the
    Secretary); exceeds
    ``(II) 5 percentage points.''.

    (j) Ambulance Services.--Section 1834(l)(3) of the Social Security
    Act (42 U.S.C. 1395m(l)(3)) is amended--
    (1) in subparagraph (A), by striking ``and'' at the end;
    (2) in subparagraph (B)--
    (A) by inserting ``, subject to subparagraph (C) and
    the succeeding sentence of this paragraph,'' after
    ``increased''; and
    (B) by striking the period at the end and inserting
    ``; and'';
    (3) by adding at the end the following new subparagraph:
    ``(C) for 2011 and each subsequent year, after
    determining the percentage increase under subparagraph
    (B) for the year, reduce such percentage increase by the
    productivity adjustment described in section
    1886(b)(3)(B)(xi)(II).''; and
    (4) by adding at the end the following flush sentence:
    ``The application of subparagraph (C) may result in the
    percentage increase under subparagraph (B) being less than 0.0
    for a year, and may result in payment rates under the fee
    schedule under this subsection for a year being less than such
    payment rates for the preceding year.''.

    (k) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of
    the Social Security Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
    (1) by redesignating clause (v) as clause (vi); and
    (2) by inserting after clause (iv) the following new clause:
    ``(v) In implementing the system described in
    clause (i) for 2011 and each subsequent year, any
    annual update under such system for the year,
    after application of clause (iv), shall be reduced
    by the productivity adjustment described in
    section 1886(b)(3)(B)(xi)(II). The application of
    the preceding sentence may result in such update
    being less than 0.0 for a year, and may result in
    payment rates under the system described in clause
    (i) for a year being less than such payment rates
    for the preceding year.''.

    [[Page 487]]

    (l) Laboratory Services.--Section 1833(h)(2)(A) of the Social
    Security Act (42 U.S.C. 1395l(h)(2)(A)) is amended--
    (1) in clause (i)--
    (A) by inserting ``, subject to clause (iv),'' after
    ``year) by''; and
    (B) by striking ``through 2013'' and inserting ``and
    2010''; and
    (2) by adding at the end the following new clause:
    ``(iv) After determining the adjustment to the
    fee schedules under clause (i), the Secretary
    shall reduce such adjustment--
    ``(I) for 2011 and each subsequent
    year, by the productivity adjustment
    described in section
    1886(b)(3)(B)(xi)(II); and
    ``(II) for each of 2011 through
    2015, by 1.75 percentage points.
    Subclause (I) shall not apply in a year where the
    adjustment to the fee schedules determined under
    clause (i) is 0.0 or a percentage decrease for a
    year. The application of the productivity
    adjustment under subclause (I) shall not result in
    an adjustment to the fee schedules under clause
    (i) being less than 0.0 for a year. The
    application of subclause (II) may result in an
    adjustment to the fee schedules under clause (i)
    being less than 0.0 for a year, and may result in
    payment rates for a year being less than such
    payment rates for the preceding year.''.

    (m) Certain Durable Medical Equipment.--Section 1834(a)(14) of the
    Social Security Act (42 U.S.C. 1395m(a)(14)) is amended--
    (1) in subparagraph (K)--
    (A) by striking ``2011, 2012, and 2013,''; and
    (B) by inserting ``and'' after the semicolon at the
    end;
    (2) by striking subparagraphs (L) and (M) and inserting the
    following new subparagraph:
    ``(L) for 2011 and each subsequent year--
    ``(i) the percentage increase in the consumer
    price index for all urban consumers (United States
    city average) for the 12-month period ending with
    June of the previous year, reduced by--
    ``(ii) the productivity adjustment described
    in section 1886(b)(3)(B)(xi)(II).''; and
    (3) by adding at the end the following flush sentence:
    ``The application of subparagraph (L)(ii) may result in the
    covered item update under this paragraph being less than 0.0 for
    a year, and may result in payment rates under this subsection
    for a year being less than such payment rates for the preceding
    year.''.

    (n) Prosthetic Devices, Orthotics, and Prosthetics.--Section
    1834(h)(4) of the Social Security Act (42 U.S.C. 1395m(h)(4)) is
    amended--
    (1) in subparagraph (A)--
    (A) in clause (ix), by striking ``and'' at the end;
    (B) in clause (x)--
    (i) by striking ``a subsequent year'' and
    inserting ``for each of 2007 through 2010''; and

    [[Page 488]]

    (ii) by inserting ``and'' after the semicolon
    at the end;
    (C) by adding at the end the following new clause:
    ``(xi) for 2011 and each subsequent year--
    ``(I) the percentage increase in the
    consumer price index for all urban
    consumers (United States city average)
    for the 12-month period ending with June
    of the previous year, reduced by--
    ``(II) the productivity adjustment
    described in section
    1886(b)(3)(B)(xi)(II).''; and
    (D) by adding at the end the following flush
    sentence:
    ``The application of subparagraph (A)(xi)(II) may result in the
    applicable percentage increase under subparagraph (A) being less
    than 0.0 for a year, and may result in payment rates under this
    subsection for a year being less than such payment rates for the
    preceding year.''.

    (o) Other Items.--Section 1842(s)(1) of the Social Security Act (42
    U.S.C. 1395u(s)(1)) is amended--
    (1) in the first sentence, by striking ``Subject to'' and
    inserting ``(A) Subject to'';
    (2) by striking the second sentence and inserting the
    following new subparagraph:
    ``(B) Any fee schedule established under this
    paragraph for such item or service shall be updated--
    ``(i) for years before 2011--
    ``(I) subject to subclause (II), by
    the percentage increase in the consumer
    price index for all urban consumers
    (United States city average) for the 12-
    month period ending with June of the
    preceding year; and
    ``(II) for items and services
    described in paragraph (2)(D) for 2009,
    section 1834(a)(14)(J) shall apply under
    this paragraph instead of the percentage
    increase otherwise applicable; and
    ``(ii) for 2011 and subsequent years--
    ``(I) the percentage increase in the
    consumer price index for all urban
    consumers (United States city average)
    for the 12-month period ending with June
    of the previous year, reduced by--
    ``(II) the productivity adjustment
    described in section
    1886(b)(3)(B)(xi)(II).''; and
    (3) by adding at the end the following flush sentence:
    ``The application of subparagraph (B)(ii)(II) may result in the
    update under this paragraph being less than 0.0 for a year, and
    may result in payment rates under any fee schedule established
    under this paragraph for a year being less than such payment
    rates for the preceding year.''.

    (p) <> No Application Prior to April 1,
    2010.--Notwithstanding the preceding provisions of this section, the
    amendments made by subsections (a), (c), and (d) shall not apply to
    discharges occurring before April 1, 2010.

    SEC. 3402. TEMPORARY ADJUSTMENT TO THE CALCULATION OF PART B PREMIUMS.

    Section 1839(i) of the Social Security Act (42 U.S.C. 1395r(i)) is
    amended--

    [[Page 489]]

    (1) in paragraph (2), in the matter preceding subparagraph
    (A), by inserting ``subject to paragraph (6),'' after
    ``subsection,'';
    (2) in paragraph (3)(A)(i), by striking ``The applicable''
    and inserting ``Subject to paragraph (6), the applicable'';
    (3) by redesignating paragraph (6) as paragraph (7); and
    (4) by inserting after paragraph (5) the following new
    paragraph:
    ``(6) <> Temporary adjustment to income
    thresholds.--Notwithstanding any other provision of this
    subsection, during the period beginning on January 1, 2011, and
    ending on December 31, 2019--
    ``(A) the threshold amount otherwise applicable
    under paragraph (2) shall be equal to such amount for
    2010; and
    ``(B) the dollar amounts otherwise applicable under
    paragraph (3)(C)(i) shall be equal to such dollar
    amounts for 2010.''.

    SEC. 3403. INDEPENDENT MEDICARE ADVISORY BOARD.

    (a) Board.--
    (1) In general.--Title XVIII of the Social Security Act (42
    U.S.C. 1395 et seq.), as amended by section 3022, is amended by
    adding at the end the following new section:

    ``independent medicare advisory board

    ``Sec. 1899A.  <> (a) Establishment.--There
    is established an independent board to be known as the `Independent
    Medicare Advisory Board'.

    ``(b) Purpose.--It is the purpose of this section to, in accordance
    with the following provisions of this section, reduce the per capita
    rate of growth in Medicare spending--
    ``(1) by requiring the Chief Actuary of the Centers for
    Medicare & Medicaid Services to determine in each year to which
    this section applies (in this section referred to as `a
    determination year') the projected per capita growth rate under
    Medicare for the second year following the determination year
    (in this section referred to as `an implementation year');
    ``(2) if the projection for the implementation year exceeds
    the target growth rate for that year, by requiring the Board to
    develop and submit during the first year following the
    determination year (in this section referred to as `a proposal
    year') a proposal containing recommendations to reduce the
    Medicare per capita growth rate to the extent required by this
    section; and
    ``(3) by requiring the Secretary to implement such proposals
    unless Congress enacts legislation pursuant to this section.

    ``(c) Board Proposals.--
    ``(1) Development.--
    ``(A) In general.--The Board shall develop detailed
    and specific proposals related to the Medicare program
    in accordance with the succeeding provisions of this
    section.
    ``(B) Advisory reports.--Beginning January 15, 2014,
    the Board may develop and submit to Congress advisory
    reports on matters related to the Medicare program,
    regardless of whether or not the Board submitted a
    proposal for such year. Such a report may, for years
    prior to 2020,

    [[Page 490]]

    include recommendations regarding improvements to
    payment systems for providers of services and suppliers
    who are not otherwise subject to the scope of the
    Board's recommendations in a proposal under this
    section. Any advisory report submitted under this
    subparagraph shall not be subject to the rules for
    congressional consideration under subsection (d).
    ``(2) Proposals.--
    ``(A) Requirements.--Each proposal submitted under
    this section in a proposal year shall meet each of the
    following requirements:
    ``(i) If the Chief Actuary of the Centers for
    Medicare & Medicaid Services has made a
    determination under paragraph (7)(A) in the
    determination year, the proposal shall include
    recommendations so that the proposal as a whole
    (after taking into account recommendations under
    clause (v)) will result in a net reduction in
    total Medicare program spending in the
    implementation year that is at least equal to the
    applicable savings target established under
    paragraph (7)(B) for such implementation year. In
    determining whether a proposal meets the
    requirement of the preceding sentence, reductions
    in Medicare program spending during the 3-month
    period immediately preceding the implementation
    year shall be counted to the extent that such
    reductions are a result of the implementation of
    recommendations contained in the proposal for a
    change in the payment rate for an item or service
    that was effective during such period pursuant to
    subsection (e)(2)(A).
    ``(ii) The proposal shall not include any
    recommendation to ration health care, raise
    revenues or Medicare beneficiary premiums under
    section 1818, 1818A, or 1839, increase Medicare
    beneficiary cost-sharing (including deductibles,
    coinsurance, and copayments), or otherwise
    restrict benefits or modify eligibility criteria.
    ``(iii) In the case of proposals submitted
    prior to December 31, 2018, the proposal shall not
    include any recommendation that would reduce
    payment rates for items and services furnished,
    prior to December 31, 2019, by providers of
    services (as defined in section 1861(u)) and
    suppliers (as defined in section 1861(d))
    scheduled, pursuant to the amendments made by
    section 3401 of the Patient Protection and
    Affordable Care Act, to receive a reduction to the
    inflationary payment updates of such providers of
    services and suppliers in excess of a reduction
    due to productivity in a year in which such
    recommendations would take effect.
    ``(iv) As appropriate, the proposal shall
    include recommendations to reduce Medicare
    payments under parts C and D, such as reductions
    in direct subsidy payments to Medicare Advantage
    and prescription drug plans specified under
    paragraph (1) and (2) of section 1860D-15(a) that
    are related to administrative expenses (including
    profits) for basic coverage, denying high bids or
    removing high bids for prescription drug

    [[Page 491]]

    coverage from the calculation of the national
    average monthly bid amount under section 1860D-
    13(a)(4), and reductions in payments to Medicare
    Advantage plans under clauses (i) and (ii) of
    section 1853(a)(1)(B) that are related to
    administrative expenses (including profits) and
    performance bonuses for Medicare Advantage plans
    under section 1853(n). Any such recommendation
    shall not affect the base beneficiary premium
    percentage specified under 1860D-13(a).
    ``(v) The proposal shall include
    recommendations with respect to administrative
    funding for the Secretary to carry out the
    recommendations contained in the proposal.
    ``(vi) The proposal shall only include
    recommendations related to the Medicare program.
    ``(B) Additional considerations.--In developing and
    submitting each proposal under this section in a
    proposal year, the Board shall, to the extent feasible--
    ``(i) give priority to recommendations that
    extend Medicare solvency;
    ``(ii) include recommendations that--
    ``(I) improve the health care
    delivery system and health outcomes,
    including by promoting integrated care,
    care coordination, prevention and
    wellness, and quality and efficiency
    improvement; and
    ``(II) protect and improve Medicare
    beneficiaries' access to necessary and
    evidence-based items and services,
    including in rural and frontier areas;
    ``(iii) include recommendations that target
    reductions in Medicare program spending to sources
    of excess cost growth;
    ``(iv) consider the effects on Medicare
    beneficiaries of changes in payments to providers
    of services (as defined in section 1861(u)) and
    suppliers (as defined in section 1861(d));
    ``(v) consider the effects of the
    recommendations on providers of services and
    suppliers with actual or projected negative cost
    margins or payment updates; and
    ``(vi) consider the unique needs of Medicare
    beneficiaries who are dually eligible for Medicare
    and the Medicaid program under title XIX.
    ``(C) No increase in total medicare program
    spending.--Each proposal submitted under this section
    shall be designed in such a manner that implementation
    of the recommendations contained in the proposal would
    not be expected to result, over the 10-year period
    starting with the implementation year, in any increase
    in the total amount of net Medicare program spending
    relative to the total amount of net Medicare program
    spending that would have occurred absent such
    implementation.
    ``(D) Consultation with
    medpac. <> --The Board shall submit a
    draft copy of each proposal to be submitted under this
    section to the Medicare Payment Advisory Commission
    established under section 1805 for its
    review. <> The Board

    [[Page 492]]

    shall submit such draft copy by not later than September
    1 of the determination year.
    ``(E) Review and comment by the
    secretary. <> --The Board
    shall submit a draft copy of each proposal to be
    submitted to Congress under this section to the
    Secretary for the Secretary's review and comment. The
    Board shall submit such draft copy by not later than
    September 1 of the determination
    year. <>  Not later than March 1 of the
    submission year, the Secretary shall submit a report to
    Congress on the results of such review, unless the
    Secretary submits a proposal under paragraph (5)(A) in
    that year.
    ``(F) Consultations.--In carrying out its duties
    under this section, the Board shall engage in regular
    consultations with the Medicaid and CHIP Payment and
    Access Commission under section 1900.
    ``(3) Transmission of board proposal to president.--
    ``(A) In general.--
    ``(i) In general. <> --Except
    as provided in clause (ii) and subsection
    (f)(3)(B), the Board shall transmit a proposal
    under this section to the President on January 15
    of each year (beginning with 2014).
    ``(ii) Exception.--The Board shall not submit
    a proposal under clause (i) in a proposal year if
    the year is--
    ``(I) a year for which the Chief
    Actuary of the Centers for Medicare &
    Medicaid Services makes a determination
    in the determination year under
    paragraph (6)(A) that the growth rate
    described in clause (i) of such
    paragraph does not exceed the growth
    rate described in clause (ii) of such
    paragraph;
    ``(II) a year in which the Chief
    Actuary of the Centers for Medicare &
    Medicaid Services makes a determination
    in the determination year that the
    projected percentage increase (if any)
    for the medical care expenditure
    category of the Consumer Price Index for
    All Urban Consumers (United States city
    average) for the implementation year is
    less than the projected percentage
    increase (if any) in the Consumer Price
    Index for All Urban Consumers (all
    items; United States city average) for
    such implementation year; or
    ``(III) for proposal year 2019 and
    subsequent proposal years, a year in
    which the Chief Actuary of the Centers
    for Medicare & Medicaid Services makes a
    determination in the determination year
    that the growth rate described in
    paragraph (8) exceeds the growth rate
    described in paragraph (6)(A)(i).
    ``(iii) Start-up period.--The Board may not
    submit a proposal under clause (i) prior to
    January 15, 2014.
    ``(B) Required information.--Each proposal submitted
    by the Board under subparagraph (A)(i) shall include--
    ``(i) the recommendations described in
    paragraph (2)(A)(i);

    [[Page 493]]

    ``(ii) an explanation of each recommendation
    contained in the proposal and the reasons for
    including such recommendation;
    ``(iii) an actuarial opinion by the Chief
    Actuary of the Centers for Medicare & Medicaid
    Services certifying that the proposal meets the
    requirements of subparagraphs (A)(i) and (C) of
    paragraph (2);
    ``(iv) a legislative proposal that implements
    the recommendations; and
    ``(v) other information determined appropriate
    by the Board.
    ``(4) Presidential submission to congress.--Upon receiving a
    proposal from the Board under paragraph (3)(A)(i) or the
    Secretary under paragraph (5), the President shall immediately
    submit such proposal to Congress.
    ``(5) Contingent secretarial development of proposal.--If,
    with respect to a proposal year, the Board is required, to but
    fails, to submit a proposal to the President by the deadline
    applicable under paragraph (3)(A)(i), the Secretary shall
    develop a detailed and specific proposal that satisfies the
    requirements of subparagraphs (A) and (C) (and, to the extent
    feasible, subparagraph (B)) of paragraph (2) and contains the
    information required paragraph
    (3)(B)). <>  By not later than
    January 25 of the year, the Secretary shall transmit--
    ``(A) such proposal to the President; and
    ``(B) a copy of such proposal to the Medicare
    Payment Advisory Commission for its review.
    ``(6) Per capita growth rate projections by chief actuary.--
    ``(A) In
    general. <> --Subject
    to subsection (f)(3)(A), not later than April 30, 2013,
    and annually thereafter, the Chief Actuary of the
    Centers for Medicare & Medicaid Services shall determine
    in each such year whether--
    ``(i) the projected Medicare per capita growth
    rate for the implementation year (as determined
    under subparagraph (B)); exceeds
    ``(ii) the projected Medicare per capita
    target growth rate for the implementation year (as
    determined under subparagraph (C)).
    ``(B) Medicare per capita growth rate.--
    ``(i) In general.--For purposes of this
    section, the Medicare per capita growth rate for
    an implementation year shall be calculated as the
    projected 5-year average (ending with such year)
    of the growth in Medicare program spending per
    unduplicated enrollee.
    ``(ii) Requirement.--The projection under
    clause (i) shall--
    ``(I) to the extent that there is
    projected to be a negative update to the
    single conversion factor applicable to
    payments for physicians' services under
    section 1848(d) furnished in the
    proposal year or the implementation
    year, assume that such update for such
    services is 0 percent rather than the
    negative percent that would otherwise
    apply; and

    [[Page 494]]

    ``(II) take into account any
    delivery system reforms or other payment
    changes that have been enacted or
    published in final rules but not yet
    implemented as of the making of such
    calculation.
    ``(C) Medicare per capita target growth rate.--For
    purposes of this section, the Medicare per capita target
    growth rate for an implementation year shall be
    calculated as the projected 5-year average (ending with
    such year) percentage increase in--
    ``(i) with respect to a determination year
    that is prior to 2018, the average of the
    projected percentage increase (if any) in--
    ``(I) the Consumer Price Index for
    All Urban Consumers (all items; United
    States city average); and
    ``(II) the medical care expenditure
    category of the Consumer Price Index for
    All Urban Consumers (United States city
    average); and
    ``(ii) with respect to a determination year
    that is after 2017, the nominal gross domestic
    product per capita plus 1.0 percentage point.
    ``(7) Savings requirement.--
    ``(A) In general.--If, with respect to a
    determination year, the Chief Actuary of the Centers for
    Medicare & Medicaid Services makes a determination under
    paragraph (6)(A) that the growth rate described in
    clause (i) of such paragraph exceeds the growth rate
    described in clause (ii) of such paragraph, the Chief
    Actuary shall establish an applicable savings target for
    the implementation year.
    ``(B) Applicable savings target.--For purposes of
    this section, the applicable savings target for an
    implementation year shall be an amount equal to the
    product of--
    ``(i) the total amount of projected Medicare
    program spending for the proposal year; and
    ``(ii) the applicable percent for the
    implementation year.
    ``(C) Applicable percent.--For purposes of
    subparagraph (B), the applicable percent for an
    implementation year is the lesser of--
    ``(i) in the case of--
    ``(I) implementation year 2015, 0.5
    percent;
    ``(II) implementation year 2016, 1.0
    percent;
    ``(III) implementation year 2017,
    1.25 percent; and
    ``(IV) implementation year 2018 or
    any subsequent implementation year, 1.5
    percent; and
    ``(ii) the projected excess for the
    implementation year (expressed as a percent)
    determined under subparagraph (A).
    ``(8) Per capita rate of growth in national health
    expenditures. <> --In each determination
    year (beginning in 2018), the Chief Actuary of the Centers for
    Medicare & Medicaid Services shall project the per capita rate
    of growth in national health expenditures for the implementation
    year. Such rate of growth for an implementation year shall be
    calculated as the projected 5-year average (ending with such
    year) percentage increase in national health care expenditures.

    [[Page 495]]

    ``(d) Congressional Consideration.--
    ``(1) <> Introduction.--
    ``(A) In general.--On the day on which a proposal is
    submitted by the President to the House of
    Representatives and the Senate under subsection (c)(4),
    the legislative proposal (described in subsection
    (c)(3)(B)(iv)) contained in the proposal shall be
    introduced (by request) in the Senate by the majority
    leader of the Senate or by Members of the Senate
    designated by the majority leader of the Senate and
    shall be introduced (by request) in the House by the
    majority leader of the House or by Members of the House
    designated by the majority leader of the House.
    ``(B) Not in session.--If either House is not in
    session on the day on which such legislative proposal is
    submitted, the legislative proposal shall be introduced
    in that House, as provided in subparagraph (A), on the
    first day thereafter on which that House is in session.
    ``(C) <>  Any member.--If the
    legislative proposal is not introduced in either House
    within 5 days on which that House is in session after
    the day on which the legislative proposal is submitted,
    then any Member of that House may introduce the
    legislative proposal.
    ``(D) Referral.--The legislation introduced under
    this paragraph shall be referred by the Presiding
    Officers of the respective Houses to the Committee on
    Finance in the Senate and to the Committee on Energy and
    Commerce and the Committee on Ways and Means in the
    House of Representatives.
    ``(2) Committee consideration of proposal.--
    ``(A) Reporting bill.--Not later than April 1 of any
    proposal year in which a proposal is submitted by the
    President to Congress under this section, the Committee
    on Ways and Means and the Committee on Energy and
    Commerce of the House of Representatives and the
    Committee on Finance of the Senate may report the bill
    referred to the Committee under paragraph (1)(D) with
    committee amendments related to the Medicare program.
    ``(B) Calculations.--In determining whether a
    committee amendment meets the requirement of
    subparagraph (A), the reductions in Medicare program
    spending during the 3-month period immediately preceding
    the implementation year shall be counted to the extent
    that such reductions are a result of the implementation
    provisions in the committee amendment for a change in
    the payment rate for an item or service that was
    effective during such period pursuant to such amendment.
    ``(C) Committee jurisdiction.--Notwithstanding rule
    XV of the Standing Rules of the Senate, a committee
    amendment described in subparagraph (A) may include
    matter not within the jurisdiction of the Committee on
    Finance if that matter is relevant to a proposal
    contained in the bill submitted under subsection (c)(3).
    ``(D) Discharge.--If, with respect to the House
    involved, the committee has not reported the bill by the
    date required by subparagraph (A), the committee shall
    be discharged from further consideration of the
    proposal.

    [[Page 496]]

    ``(3) Limitation on changes to the board recommendations.--
    ``(A) In general.--It shall not be in order in the
    Senate or the House of Representatives to consider any
    bill, resolution, or amendment, pursuant to this
    subsection or conference report thereon, that fails to
    satisfy the requirements of subparagraphs (A)(i) and (C)
    of subsection (c)(2).
    ``(B) Limitation on changes to the board
    recommendations in other legislation.--It shall not be
    in order in the Senate or the House of Representatives
    to consider any bill, resolution, amendment, or
    conference report (other than pursuant to this section)
    that would repeal or otherwise change the
    recommendations of the Board if that change would fail
    to satisfy the requirements of subparagraphs (A)(i) and
    (C) of subsection (c)(2).
    ``(C) Limitation on changes to this subsection.--It
    shall not be in order in the Senate or the House of
    Representatives to consider any bill, resolution,
    amendment, or conference report that would repeal or
    otherwise change this subsection.
    ``(D) Waiver.--This paragraph may be waived or
    suspended in the Senate only by the affirmative vote of
    three-fifths of the Members, duly chosen and sworn.
    ``(E) Appeals.--An affirmative vote of three-fifths
    of the Members of the Senate, duly chosen and sworn,
    shall be required in the Senate to sustain an appeal of
    the ruling of the Chair on a point of order raised under
    this paragraph.
    ``(4) Expedited procedure.--
    ``(A) Consideration.--A motion to proceed to the
    consideration of the bill in the Senate is not
    debatable.
    ``(B) Amendment.--
    ``(i) Time limitation.--Debate in the Senate
    on any amendment to a bill under this section
    shall be limited to 1 hour, to be equally divided
    between, and controlled by, the mover and the
    manager of the bill, and debate on any amendment
    to an amendment, debatable motion, or appeal shall
    be limited to 30 minutes, to be equally divided
    between, and controlled by, the mover and the
    manager of the bill, except that in the event the
    manager of the bill is in favor of any such
    amendment, motion, or appeal, the time in
    opposition thereto shall be controlled by the
    minority leader or such leader's designee.
    ``(ii) Germane.--No amendment that is not
    germane to the provisions of such bill shall be
    received.
    ``(iii) Additional time.--The leaders, or
    either of them, may, from the time under their
    control on the passage of the bill, allot
    additional time to any Senator during the
    consideration of any amendment, debatable motion,
    or appeal.
    ``(iv) Amendment not in order.--It shall not
    be in order to consider an amendment that would
    cause the bill to result in a net reduction in
    total Medicare program spending in the
    implementation year that is less than the
    applicable savings target established

    [[Page 497]]

    under subsection (c)(7)(B) for such implementation
    year.
    ``(v) Waiver and appeals.--This paragraph may
    be waived or suspended in the Senate only by the
    affirmative vote of three-fifths of the Members,
    duly chosen and sworn. An affirmative vote of
    three-fifths of the Members of the Senate, duly
    chosen and sworn, shall be required in the Senate
    to sustain an appeal of the ruling of the Chair on
    a point of order raised under this section.
    ``(C) Consideration by the other house.--
    ``(i) In general.--The expedited procedures
    provided in this subsection for the consideration
    of a bill introduced pursuant to paragraph (1)
    shall not apply to such a bill that is received by
    one House from the other House if such a bill was
    not introduced in the receiving House.
    ``(ii) Before
    passage. <> --If a bill that
    is introduced pursuant to paragraph (1) is
    received by one House from the other House, after
    introduction but before disposition of such a bill
    in the receiving House, then the following shall
    apply:
    ``(I) The receiving House shall
    consider the bill introduced in that
    House through all stages of
    consideration up to, but not including,
    passage.
    ``(II) The question on passage shall
    be put on the bill of the other House as
    amended by the language of the receiving
    House.
    ``(iii) After passage.--If a bill introduced
    pursuant to paragraph (1) is received by one House
    from the other House, after such a bill is passed
    by the receiving House, then the vote on passage
    of the bill that originates in the receiving House
    shall be considered to be the vote on passage of
    the bill received from the other House as amended
    by the language of the receiving House.
    ``(iv) Disposition.--Upon disposition of a
    bill introduced pursuant to paragraph (1) that is
    received by one House from the other House, it
    shall no longer be in order to consider the bill
    that originates in the receiving House.
    ``(v) Limitation. <> --
    Clauses (ii), (iii), and (iv) shall apply only to
    a bill received by one House from the other House
    if the bill--
    ``(I) is related only to the program
    under this title; and
    ``(II) satisfies the requirements of
    subparagraphs (A)(i) and (C) of
    subsection (c)(2).
    ``(D) Senate limits on debate.--
    ``(i) In general.--In the Senate,
    consideration of the bill and on all debatable
    motions and appeals in connection therewith shall
    not exceed a total of 30 hours, which shall be
    divided equally between the majority and minority
    leaders or their designees.
    ``(ii) Motion to further limit debate.--A
    motion to further limit debate on the bill is in
    order and is not debatable.

    [[Page 498]]

    ``(iii) Motion or appeal.--Any debatable
    motion or appeal is debatable for not to exceed 1
    hour, to be divided equally between those favoring
    and those opposing the motion or appeal.
    ``(iv) Final disposition.--After 30 hours of
    consideration, the Senate shall proceed, without
    any further debate on any question, to vote on the
    final disposition thereof to the exclusion of all
    amendments not then pending before the Senate at
    that time and to the exclusion of all motions,
    except a motion to table, or to reconsider and one
    quorum call on demand to establish the presence of
    a quorum (and motions required to establish a
    quorum) immediately before the final vote begins.
    ``(E) Consideration in conference.--
    ``(i) In general.--Consideration in the Senate
    and the House of Representatives on the conference
    report or any messages between Houses shall be
    limited to 10 hours, equally divided and
    controlled by the majority and minority leaders of
    the Senate or their designees and the Speaker of
    the House of Representatives and the minority
    leader of the House of Representatives or their
    designees.
    ``(ii) Time limitation.--Debate in the Senate
    on any amendment under this subparagraph shall be
    limited to 1 hour, to be equally divided between,
    and controlled by, the mover and the manager of
    the bill, and debate on any amendment to an
    amendment, debatable motion, or appeal shall be
    limited to 30 minutes, to be equally divided
    between, and controlled by, the mover and the
    manager of the bill, except that in the event the
    manager of the bill is in favor of any such
    amendment, motion, or appeal, the time in
    opposition thereto shall be controlled by the
    minority leader or such leader's designee.
    ``(iii) Final disposition.--After 10 hours of
    consideration, the Senate shall proceed, without
    any further debate on any question, to vote on the
    final disposition thereof to the exclusion of all
    motions not then pending before the Senate at that
    time or necessary to resolve the differences
    between the Houses and to the exclusion of all
    other motions, except a motion to table, or to
    reconsider and one quorum call on demand to
    establish the presence of a quorum (and motions
    required to establish a quorum) immediately before
    the final vote begins.
    ``(iv) Limitation. <> --
    Clauses (i) through (iii) shall only apply to a
    conference report, message or the amendments
    thereto if the conference report, message, or an
    amendment thereto--
    ``(I) is related only to the program
    under this title; and
    ``(II) satisfies the requirements of
    subparagraphs (A)(i) and (C) of
    subsection (c)(2).
    ``(F) Veto.--If the President vetoes the bill debate
    on a veto message in the Senate under this subsection
    shall

    [[Page 499]]

    be 1 hour equally divided between the majority and
    minority leaders or their designees.
    ``(5) Rules of the senate and house of representatives.--
    This subsection and subsection (f)(2) are enacted by Congress--
    ``(A) as an exercise of the rulemaking power of the
    Senate and the House of Representatives, respectively,
    and is deemed to be part of the rules of each House,
    respectively, but applicable only with respect to the
    procedure to be followed in that House in the case of
    bill under this section, and it supersedes other rules
    only to the extent that it is inconsistent with such
    rules; and
    ``(B) with full recognition of the constitutional
    right of either House to change the rules (so far as
    they relate to the procedure of that House) at any time,
    in the same manner, and to the same extent as in the
    case of any other rule of that House.

    ``(e) Implementation of Proposal.--
    ``(1) In general.--Notwithstanding any other provision of
    law, the Secretary shall, except as provided in paragraph (3),
    implement the recommendations contained in a proposal submitted
    by the President to Congress pursuant to this section on August
    15 of the year in which the proposal is so submitted.
    ``(2) Application.--
    ``(A) In general.--A recommendation described in
    paragraph (1) shall apply as follows:
    ``(i) In the case of a recommendation that is
    a change in the payment rate for an item or
    service under Medicare in which payment rates
    change on a fiscal year basis (or a cost reporting
    period basis that relates to a fiscal year), on a
    calendar year basis (or a cost reporting period
    basis that relates to a calendar year), or on a
    rate year basis (or a cost reporting period basis
    that relates to a rate year), such recommendation
    shall apply to items and services furnished on the
    first day of the first fiscal year, calendar year,
    or rate year (as the case may be) that begins
    after such August 15.
    ``(ii) In the case of a recommendation
    relating to payments to plans under parts C and D,
    such recommendation shall apply to plan years
    beginning on the first day of the first calendar
    year that begins after such August 15.
    ``(iii) In the case of any other
    recommendation, such recommendation shall be
    addressed in the regular regulatory process
    timeframe and shall apply as soon as practicable.
    ``(B) Interim final rulemaking.--The Secretary may
    use interim final rulemaking to implement any
    recommendation described in paragraph (1).
    ``(3) Exception.--The Secretary shall not be required to
    implement the recommendations contained in a proposal submitted
    in a proposal year by the President to Congress pursuant to this
    section if--
    ``(A) prior to August 15 of the proposal year,
    Federal legislation is enacted that includes the
    following provision: `This Act supercedes the
    recommendations of the Board

    [[Page 500]]

    contained in the proposal submitted, in the year which
    includes the date of enactment of this Act, to Congress
    under section 1899A of the Social Security Act.'; and
    ``(B) <> in the case of
    implementation year 2020 and subsequent implementation
    years, a joint resolution described in subsection (f)(1)
    is enacted not later than August 15, 2017.
    ``(4) No affect on authority to implement certain
    provisions.--Nothing in paragraph (3) shall be construed to
    affect the authority of the Secretary to implement any
    recommendation contained in a proposal or advisory report under
    this section to the extent that the Secretary otherwise has the
    authority to implement such recommendation administratively.
    ``(5) Limitation on review.--There shall be no
    administrative or judicial review under section 1869, section
    1878, or otherwise of the implementation by the Secretary under
    this subsection of the recommendations contained in a proposal.

    ``(f) Joint Resolution Required To Discontinue the Board.--
    ``(1) In general. <> --For purposes of
    subsection (e)(3)(B), a joint resolution described in this
    paragraph means only a joint resolution--
    ``(A) that is introduced in 2017 by not later than
    February 1 of such year;
    ``(B) which does not have a preamble;
    ``(C) the title of which is as follows: `Joint
    resolution approving the discontinuation of the process
    for consideration and automatic implementation of the
    annual proposal of the Independent Medicare Advisory
    Board under section 1899A of the Social Security Act';
    and
    ``(D) the matter after the resolving clause of which
    is as follows: `That Congress approves the
    discontinuation of the process for consideration and
    automatic implementation of the annual proposal of the
    Independent Medicare Advisory Board under section 1899A
    of the Social Security Act.'.
    ``(2) Procedure.--
    ``(A) Referral.--A joint resolution described in
    paragraph (1) shall be referred to the Committee on Ways
    and Means and the Committee on Energy and Commerce of
    the House of Representatives and the Committee on
    Finance of the Senate.
    ``(B) Discharge. <> --In
    the Senate, if the committee to which is referred a
    joint resolution described in paragraph (1) has not
    reported such joint resolution (or an identical joint
    resolution) at the end of 20 days after the joint
    resolution described in paragraph (1) is introduced,
    such committee may be discharged from further
    consideration of such joint resolution upon a petition
    supported in writing by 30 Members of the Senate, and
    such joint resolution shall be placed on the calendar.
    ``(C) Consideration.--
    ``(i) In general.--In the Senate, when the
    committee to which a joint resolution is referred
    has reported, or when a committee is discharged
    (under subparagraph (C)) from further
    consideration of a joint

    [[Page 501]]

    resolution described in paragraph (1), it is at
    any time thereafter in order (even though a
    previous motion to the same effect has been
    disagreed to) for a motion to proceed to the
    consideration of the joint resolution to be made,
    and all points of order against the joint
    resolution (and against consideration of the joint
    resolution) are waived, except for points of order
    under the Congressional Budget act of 1974 or
    under budget resolutions pursuant to that Act. The
    motion is not debatable. A motion to reconsider
    the vote by which the motion is agreed to or
    disagreed to shall not be in order. If a motion to
    proceed to the consideration of the joint
    resolution is agreed to, the joint resolution
    shall remain the unfinished business of the Senate
    until disposed of.
    ``(ii) Debate limitation.--In the Senate,
    consideration of the joint resolution, and on all
    debatable motions and appeals in connection
    therewith, shall be limited to not more than 10
    hours, which shall be divided equally between the
    majority leader and the minority leader, or their
    designees. A motion further to limit debate is in
    order and not debatable. An amendment to, or a
    motion to postpone, or a motion to proceed to the
    consideration of other business, or a motion to
    recommit the joint resolution is not in order.
    ``(iii) Passage.--In the Senate, immediately
    following the conclusion of the debate on a joint
    resolution described in paragraph (1), and a
    single quorum call at the conclusion of the debate
    if requested in accordance with the rules of the
    Senate, the vote on passage of the joint
    resolution shall occur.
    ``(iv) Appeals.--Appeals from the decisions of
    the Chair relating to the application of the rules
    of the Senate to the procedure relating to a joint
    resolution described in paragraph (1) shall be
    decided without debate.
    ``(D) Other house acts
    first. <> --If, before the passage
    by 1 House of a joint resolution of that House described
    in paragraph (1), that House receives from the other
    House a joint resolution described in paragraph (1),
    then the following procedures shall apply:
    ``(i) The joint resolution of the other House
    shall not be referred to a committee.
    ``(ii) With respect to a joint resolution
    described in paragraph (1) of the House receiving
    the joint resolution--
    ``(I) the procedure in that House
    shall be the same as if no joint
    resolution had been received from the
    other House; but
    ``(II) the vote on final passage
    shall be on the joint resolution of the
    other House.
    ``(E) Excluded days.--For purposes of determining
    the period specified in subparagraph (B), there shall be
    excluded any days either House of Congress is adjourned
    for more than 3 days during a session of Congress.

    [[Page 502]]

    ``(F) Majority required for adoption.--A joint
    resolution considered under this subsection shall
    require an affirmative vote of three-fifths of the
    Members, duly chosen and sworn, for adoption.
    ``(3) <>  Termination.--If a joint
    resolution described in paragraph (1) is enacted not later than
    August 15, 2017--
    ``(A) the Chief Actuary of the Medicare & Medicaid
    Services shall not--
    ``(i) make any determinations under subsection
    (c)(6) after May 1, 2017; or
    ``(ii) provide any opinion pursuant to
    subsection (c)(3)(B)(iii) after January 16, 2018;
    ``(B) the Board shall not submit any proposals or
    advisory reports to Congress under this section after
    January 16, 2018; and
    ``(C) the Board and the consumer advisory council
    under subsection (k) shall terminate on August 16, 2018.

    ``(g) Board Membership; Terms of Office; Chairperson; Removal.--
    ``(1) Membership.--
    ``(A) <> In
    general.--The Board shall be composed of--
    ``(i) 15 members appointed by the President,
    by and with the advice and consent of the Senate;
    and
    ``(ii) the Secretary, the Administrator of the
    Center for Medicare & Medicaid Services, and the
    Administrator of the Health Resources and Services
    Administration, all of whom shall serve ex officio
    as nonvoting members of the Board.
    ``(B) Qualifications.--
    ``(i) In general.--The appointed membership of
    the Board shall include individuals with national
    recognition for their expertise in health finance
    and economics, actuarial science, health facility
    management, health plans and integrated delivery
    systems, reimbursement of health facilities,
    allopathic and osteopathic physicians, and other
    providers of health services, and other related
    fields, who provide a mix of different
    professionals, broad geographic representation,
    and a balance between urban and rural
    representatives.
    ``(ii) Inclusion.--The appointed membership of
    the Board shall include (but not be limited to)
    physicians and other health professionals, experts
    in the area of pharmaco-economics or prescription
    drug benefit programs, employers, third-party
    payers, individuals skilled in the conduct and
    interpretation of biomedical, health services, and
    health economics research and expertise in
    outcomes and effectiveness research and technology
    assessment. Such membership shall also include
    representatives of consumers and the elderly.
    ``(iii) Majority nonproviders.--Individuals
    who are directly involved in the provision or
    management of the delivery of items and services
    covered under this title shall not constitute a
    majority of the appointed membership of the Board.
    ``(C) Ethical disclosure. <> --The President shall establish a system
    for public disclosure by appointed members

    [[Page 503]]

    of the Board of financial and other potential conflicts
    of interest relating to such members. Appointed members
    of the Board shall be treated as officers in the
    executive branch for purposes of applying title I of the
    Ethics in Government Act of 1978 (Public Law 95-521).
    ``(D) Conflicts of interest.--No individual may
    serve as an appointed member if that individual engages
    in any other business, vocation, or employment.
    ``(E) Consultation with
    congress. <> --In selecting
    individuals for nominations for appointments to the
    Board, the President shall consult with--
    ``(i) the majority leader of the Senate
    concerning the appointment of 3 members;
    ``(ii) the Speaker of the House of
    Representatives concerning the appointment of 3
    members;
    ``(iii) the minority leader of the Senate
    concerning the appointment of 3 members; and
    ``(iv) the minority leader of the House of
    Representatives concerning the appointment of 3
    members.
    ``(2) Term of office.--Each appointed member shall hold
    office for a term of 6 years except that--
    ``(A) a member may not serve more than 2 full
    consecutive terms (but may be reappointed to 2 full
    consecutive terms after being appointed to fill a
    vacancy on the Board);
    ``(B) a member appointed to fill a vacancy occurring
    prior to the expiration of the term for which that
    member's predecessor was appointed shall be appointed
    for the remainder of such term;
    ``(C) a member may continue to serve after the
    expiration of the member's term until a successor has
    taken office; and
    ``(D) of the members first appointed under this
    section, 5 shall be appointed for a term of 1 year, 5
    shall be appointed for a term of 3 years, and 5 shall be
    appointed for a term of 6 years, the term of each to be
    designated by the President at the time of nomination.
    ``(3) Chairperson.--
    ``(A) In
    general. <> --The
    Chairperson shall be appointed by the President, by and
    with the advice and consent of the Senate, from among
    the members of the Board.
    ``(B) Duties.--The Chairperson shall be the
    principal executive officer of the Board, and shall
    exercise all of the executive and administrative
    functions of the Board, including functions of the Board
    with respect to--
    ``(i) the appointment and supervision of
    personnel employed by the Board;
    ``(ii) the distribution of business among
    personnel appointed and supervised by the
    Chairperson and among administrative units of the
    Board; and
    ``(iii) the use and expenditure of funds.
    ``(C) Governance.--In carrying out any of the
    functions under subparagraph (B), the Chairperson shall
    be governed by the general policies established by the
    Board and by the decisions, findings, and determinations
    the Board shall by law be authorized to make.

    [[Page 504]]

    ``(D) Requests for appropriations.--Requests or
    estimates for regular, supplemental, or deficiency
    appropriations on behalf of the Board may not be
    submitted by the Chairperson without the prior approval
    of a majority vote of the Board.
    ``(4) Removal.--Any appointed member may be removed by the
    President for neglect of duty or malfeasance in office, but for
    no other cause.

    ``(h) Vacancies; Quorum; Seal; Vice Chairperson; Voting on
    Reports.--
    ``(1) Vacancies.--No vacancy on the Board shall impair the
    right of the remaining members to exercise all the powers of the
    Board.
    ``(2) Quorum.--A majority of the appointed members of the
    Board shall constitute a quorum for the transaction of business,
    but a lesser number of members may hold hearings.
    ``(3) Seal.--The Board shall have an official seal, of which
    judicial notice shall be taken.
    ``(4) Vice chairperson. <> --The Board
    shall annually elect a Vice Chairperson to act in the absence or
    disability of the Chairperson or in case of a vacancy in the
    office of the Chairperson.
    ``(5) Voting on proposals.--Any proposal of the Board must
    be approved by the majority of appointed members present.

    ``(i) Powers of the Board.--
    ``(1) Hearings.--The Board may hold such hearings, sit and
    act at such times and places, take such testimony, and receive
    such evidence as the Board considers advisable to carry out this
    section.
    ``(2) Authority to inform research priorities for data
    collection.--The Board may advise the Secretary on priorities
    for health services research, particularly as such priorities
    pertain to necessary changes and issues regarding payment
    reforms under Medicare.
    ``(3) Obtaining official data.--The Board may secure
    directly from any department or agency of the United States
    information necessary to enable it to carry out this section.
    Upon request of the Chairperson, the head of that department or
    agency shall furnish that information to the Board on an agreed
    upon schedule.
    ``(4) Postal services.--The Board may use the United States
    mails in the same manner and under the same conditions as other
    departments and agencies of the Federal Government.
    ``(5) Gifts.--The Board may accept, use, and dispose of
    gifts or donations of services or property.
    ``(6) Offices.--The Board shall maintain a principal office
    and such field offices as it determines necessary, and may meet
    and exercise any of its powers at any other place.

    ``(j) Personnel Matters.--
    ``(1) Compensation of members and chairperson.--Each
    appointed member, other than the Chairperson, shall be
    compensated at a rate equal to the annual rate of basic pay
    prescribed for level III of the Executive Schedule under section
    5315 of title 5, United States Code. The Chairperson shall be
    compensated at a rate equal to the daily equivalent of the
    annual rate of basic pay prescribed for level II of the

    [[Page 505]]

    Executive Schedule under section 5315 of title 5, United States
    Code.
    ``(2) Travel expenses.--The appointed members shall be
    allowed travel expenses, including per diem in lieu of
    subsistence, at rates authorized for employees of agencies under
    subchapter I of chapter 57 of title 5, United States Code, while
    away from their homes or regular places of business in the
    performance of services for the Board.
    ``(3) Staff.--
    ``(A) In general.--The Chairperson may, without
    regard to the civil service laws and regulations,
    appoint and terminate an executive director and such
    other additional personnel as may be necessary to enable
    the Board to perform its duties. The employment of an
    executive director shall be subject to confirmation by
    the Board.
    ``(B) Compensation.--The Chairperson may fix the
    compensation of the executive director and other
    personnel without regard to chapter 51 and subchapter
    III of chapter 53 of title 5, United States Code,
    relating to classification of positions and General
    Schedule pay rates, except that the rate of pay for the
    executive director and other personnel may not exceed
    the rate payable for level V of the Executive Schedule
    under section 5316 of such title.
    ``(4) Detail of government employees.--Any Federal
    Government employee may be detailed to the Board without
    reimbursement, and such detail shall be without interruption or
    loss of civil service status or privilege.
    ``(5) Procurement of temporary and intermittent services.--
    The Chairperson may procure temporary and intermittent services
    under section 3109(b) of title 5, United States Code, at rates
    for individuals which do not exceed the daily equivalent of the
    annual rate of basic pay prescribed for level V of the Executive
    Schedule under section 5316 of such title.

    ``(k) Consumer Advisory Council.--
    ``(1) In general. <> --There is
    established a consumer advisory council to advise the Board on
    the impact of payment policies under this title on consumers.
    ``(2) Membership.--
    ``(A) Number and appointment.--The consumer advisory
    council shall be composed of 10 consumer representatives
    appointed by the Comptroller General of the United
    States, 1 from among each of the 10 regions established
    by the Secretary as of the date of enactment of this
    section.
    ``(B) Qualifications.--The membership of the council
    shall represent the interests of consumers and
    particular communities.
    ``(3) Duties. <> --The consumer advisory
    council shall, subject to the call of the Board, meet not less
    frequently than 2 times each year in the District of Columbia.
    ``(4) Open meetings.--Meetings of the consumer advisory
    council shall be open to the public.
    ``(5) Election of officers.--Members of the consumer
    advisory council shall elect their own officers.
    ``(6) Application of faca.--The Federal Advisory Committee
    Act (5 U.S.C. App.) shall apply to the consumer advisory council
    except that section 14 of such Act shall not apply.

    [[Page 506]]

    ``(l) Definitions.--In this section:
    ``(1) Board; chairperson; member.--The terms `Board',
    `Chairperson', and `Member' mean the Independent Medicare
    Advisory Board established under subsection (a) and the
    Chairperson and any Member thereof, respectively.
    ``(2) Medicare.--The term `Medicare' means the program
    established under this title, including parts A, B, C, and D.
    ``(3) Medicare beneficiary.--The term `Medicare beneficiary'
    means an individual who is entitled to, or enrolled for,
    benefits under part A or enrolled for benefits under part B.
    ``(4) Medicare program spending.--The term `Medicare program
    spending' means program spending under parts A, B, and D net of
    premiums.

    ``(m) Funding.--
    ``(1) In general.--There are appropriated to the Board to
    carry out its duties and functions--
    ``(A) for fiscal year 2012, $15,000,000; and
    ``(B) for each subsequent fiscal year, the amount
    appropriated under this paragraph for the previous
    fiscal year increased by the annual percentage increase
    in the Consumer Price Index for All Urban Consumers (all
    items; United States city average) as of June of the
    previous fiscal year.
    ``(2) From trust funds.--Sixty percent of amounts
    appropriated under paragraph (1) shall be derived by transfer
    from the Federal Hospital Insurance Trust Fund under section
    1817 and 40 percent of amounts appropriated under such paragraph
    shall be derived by transfer from the Federal Supplementary
    Medical Insurance Trust Fund under section 1841.''.
    (2) Lobbying cooling-off period for members of the
    independent medicare advisory board.--Section 207(c) of title
    18, United States Code, is amended by inserting at the end the
    following:
    ``(3) Members of the independent medicare advisory board.--
    ``(A) In general. <> --
    Paragraph (1) shall apply to a member of the Independent
    Medicare Advisory Board under section 1899A.
    ``(B) Agencies and congress.--For purposes of
    paragraph (1), the agency in which the individual
    described in subparagraph (A) served shall be considered
    to be the Independent Medicare Advisory Board, the
    Department of Health and Human Services, and the
    relevant committees of jurisdiction of Congress,
    including the Committee on Ways and Means and the
    Committee on Energy and Commerce of the House of
    Representatives and the Committee on Finance of the
    Senate.''.

    (b) <> GAO Study and Report on
    Determination and Implementation of Payment and Coverage Policies Under
    the Medicare Program.--
    (1) Initial study and report.--
    (A) Study.--The Comptroller General of the United
    States (in this section referred to as the ``Comptroller
    General'') shall conduct a study on changes to payment
    policies, methodologies, and rates and coverage policies
    and methodologies under the Medicare program under title
    XVIII

    [[Page 507]]

    of the Social Security Act as a result of the
    recommendations contained in the proposals made by the
    Independent Medicare Advisory Board under section 1899A
    of such Act (as added by subsection (a)), including an
    analysis of the effect of such recommendations on--
    (i) Medicare beneficiary access to providers
    and items and services;
    (ii) the affordability of Medicare premiums
    and cost-sharing (including deductibles,
    coinsurance, and copayments);
    (iii) the potential impact of changes on other
    government or private-sector purchasers and payers
    of care; and
    (iv) quality of patient care, including
    patient experience, outcomes, and other measures
    of care.
    (B) Report.--Not later than July 1, 2015, the
    Comptroller General shall submit to Congress a report
    containing the results of the study conducted under
    subparagraph (A), together with recommendations for such
    legislation and administrative action as the Comptroller
    General determines appropriate.
    (2) Subsequent studies and reports.--The Comptroller General
    shall periodically conduct such additional studies and submit
    reports to Congress on changes to Medicare payments policies,
    methodologies, and rates and coverage policies and methodologies
    as the Comptroller General determines appropriate, in
    consultation with the Committee on Ways and Means and the
    Committee on Energy and Commerce of the House of Representatives
    and the Committee on Finance of the Senate.

    (c) Conforming Amendments.--Section 1805(b) of the Social Security
    Act (42 U.S.C. 1395b-6(b)) is amended--
    (1) by redesignating paragraphs (4) through (8) as
    paragraphs (5) through (9), respectively; and
    (2) by inserting after paragraph (3) the following:
    ``(4) Review and comment on the independent medicare
    advisory board or secretarial proposal. <> --If
    the Independent Medicare Advisory Board (as established under
    subsection (a) of section 1899A) or the Secretary submits a
    proposal to the Commission under such section in a year, the
    Commission shall review the proposal and, not later than March 1
    of that year, submit to the Committee on Ways and Means and the
    Committee on Energy and Commerce of the House of Representatives
    and the Committee on Finance of the Senate written comments on
    such proposal. Such comments may include such recommendations as
    the Commission deems appropriate.''.

    Subtitle F--Health Care Quality Improvements

    SEC. 3501. HEALTH CARE DELIVERY SYSTEM RESEARCH; QUALITY IMPROVEMENT
    TECHNICAL ASSISTANCE.

    Part D of title IX of the Public Health Service Act, as amended by
    section 3013, is further amended by adding at the end the following:

    [[Page 508]]

    ``Subpart II--Health Care Quality Improvement Programs

    ``SEC. 933. <> HEALTH CARE DELIVERY SYSTEM
    RESEARCH.

    ``(a) Purpose.--The purposes of this section are to--
    ``(1) enable the Director to identify, develop, evaluate,
    disseminate, and provide training in innovative methodologies
    and strategies for quality improvement practices in the delivery
    of health care services that represent best practices (referred
    to as `best practices') in health care quality, safety, and
    value; and
    ``(2) ensure that the Director is accountable for
    implementing a model to pursue such research in a collaborative
    manner with other related Federal agencies.

    ``(b) General Functions of the Center.--The Center for Quality
    Improvement and Patient Safety of the Agency for Healthcare Research and
    Quality (referred to in this section as the `Center'), or any other
    relevant agency or department designated by the Director, shall--
    ``(1) carry out its functions using research from a variety
    of disciplines, which may include epidemiology, health services,
    sociology, psychology, human factors engineering, biostatistics,
    health economics, clinical research, and health informatics;
    ``(2) conduct or support activities consistent with the
    purposes described in subsection (a), and for--
    ``(A) best practices for quality improvement
    practices in the delivery of health care services; and
    ``(B) that include changes in processes of care and
    the redesign of systems used by providers that will
    reliably result in intended health outcomes, improve
    patient safety, and reduce medical errors (such as skill
    development for health care providers in team-based
    health care delivery and rapid cycle process
    improvement) and facilitate adoption of improved
    workflow;
    ``(3) identify health care providers, including health care
    systems, single institutions, and individual providers, that--
    ``(A) deliver consistently high-quality, efficient
    health care services (as determined by the Secretary);
    and
    ``(B) employ best practices that are adaptable and
    scalable to diverse health care settings or effective in
    improving care across diverse settings;
    ``(4) assess research, evidence, and knowledge about what
    strategies and methodologies are most effective in improving
    health care delivery;
    ``(5) find ways to translate such information rapidly and
    effectively into practice, and document the sustainability of
    those improvements;
    ``(6) create strategies for quality improvement through the
    development of tools, methodologies, and interventions that can
    successfully reduce variations in the delivery of health care;
    ``(7) identify, measure, and improve organizational, human,
    or other causative factors, including those related to the
    culture and system design of a health care organization, that
    contribute to the success and sustainability of specific quality
    improvement and patient safety strategies;

    [[Page 509]]

    ``(8) provide for the development of best practices in the
    delivery of health care services that--
    ``(A) have a high likelihood of success, based on
    structured review of empirical evidence;
    ``(B) are specified with sufficient detail of the
    individual processes, steps, training, skills, and
    knowledge required for implementation and incorporation
    into workflow of health care practitioners in a variety
    of settings;
    ``(C) are designed to be readily adapted by health
    care providers in a variety of settings; and
    ``(D) where applicable, assist health care providers
    in working with other health care providers across the
    continuum of care and in engaging patients and their
    families in improving the care and patient health
    outcomes;
    ``(9) provide for the funding of the activities of
    organizations with recognized expertise and excellence in
    improving the delivery of health care services, including
    children's health care, by involving multiple disciplines,
    managers of health care entities, broad development and
    training, patients, caregivers and families, and frontline
    health care workers, including activities for the examination of
    strategies to share best quality improvement practices and to
    promote excellence in the delivery of health care services; and
    ``(10) build capacity at the State and community level to
    lead quality and safety efforts through education, training, and
    mentoring programs to carry out the activities under paragraphs
    (1) through (9).

    ``(c) Research Functions of Center.--
    ``(1) In general.--The Center shall support, such as through
    a contract or other mechanism, research on health care delivery
    system improvement and the development of tools to facilitate
    adoption of best practices that improve the quality, safety, and
    efficiency of health care delivery services. Such support may
    include establishing a Quality Improvement Network Research
    Program for the purpose of testing, scaling, and disseminating
    of interventions to improve quality and efficiency in health
    care. Recipients of funding under the Program may include
    national, State, multi-State, or multi-site quality improvement
    networks.
    ``(2) Research requirements.--The research conducted
    pursuant to paragraph (1) shall--
    ``(A) address the priorities identified by the
    Secretary in the national strategic plan established
    under section 399HH;
    ``(B) identify areas in which evidence is
    insufficient to identify strategies and methodologies,
    taking into consideration areas of insufficient evidence
    identified by the entity with a contract under section
    1890(a) of the Social Security Act in the report
    required under section 399JJ;
    ``(C) address concerns identified by health care
    institutions and providers and communicated through the
    Center pursuant to subsection (d);
    ``(D) reduce preventable morbidity, mortality, and
    associated costs of morbidity and mortality by building
    capacity for patient safety research;
    ``(E) support the discovery of processes for the
    reliable, safe, efficient, and responsive delivery of
    health care, taking

    [[Page 510]]

    into account discoveries from clinical research and
    comparative effectiveness research;
    ``(F) allow communication of research findings and
    translate evidence into practice recommendations that
    are adaptable to a variety of settings, and which, as
    soon as practicable after the establishment of the
    Center, shall include--
    ``(i) the implementation of a national
    application of Intensive Care Unit improvement
    projects relating to the adult (including
    geriatric), pediatric, and neonatal patient
    populations;
    ``(ii) practical methods for addressing health
    care associated infections, including Methicillin-
    Resistant Staphylococcus Aureus and Vancomycin-
    Resistant Entercoccus infections and other
    emerging infections; and
    ``(iii) practical methods for reducing
    preventable hospital admissions and readmissions;
    ``(G) expand demonstration projects for improving
    the quality of children's health care and the use of
    health information technology, such as through Pediatric
    Quality Improvement Collaboratives and Learning
    Networks, consistent with provisions of section 1139A of
    the Social Security Act for assessing and improving
    quality, where applicable;
    ``(H) identify and mitigate hazards by--
    ``(i) analyzing events reported to patient
    safety reporting systems and patient safety
    organizations; and
    ``(ii) using the results of such analyses to
    develop scientific methods of response to such
    events;
    ``(I) include the conduct of systematic reviews of
    existing practices that improve the quality, safety, and
    efficiency of health care delivery, as well as new
    research on improving such practices; and
    ``(J) include the examination of how to measure and
    evaluate the progress of quality and patient safety
    activities.

    ``(d) Dissemination of Research Findings.--
    ``(1) Public availability.--The Director shall make the
    research findings of the Center available to the public through
    multiple media and appropriate formats to reflect the varying
    needs of health care providers and consumers and diverse levels
    of health literacy.
    ``(2) Linkage to health information technology.--The
    Secretary shall ensure that research findings and results
    generated by the Center are shared with the Office of the
    National Coordinator of Health Information Technology and used
    to inform the activities of the health information technology
    extension program under section 3012, as well as any relevant
    standards, certification criteria, or implementation
    specifications.

    ``(e) Prioritization. <> --The Director shall identify
    and regularly update a list of processes or systems on which to focus
    research and dissemination activities of the Center, taking into
    account--
    ``(1) the cost to Federal health programs;
    ``(2) consumer assessment of health care experience;

    [[Page 511]]

    ``(3) provider assessment of such processes or systems and
    opportunities to minimize distress and injury to the health care
    workforce;
    ``(4) the potential impact of such processes or systems on
    health status and function of patients, including vulnerable
    populations including children;
    ``(5) the areas of insufficient evidence identified under
    subsection (c)(2)(B); and
    ``(6) the evolution of meaningful use of health information
    technology, as defined in section 3000.

    ``(f) Coordination.--The Center shall coordinate its activities with
    activities conducted by the Center for Medicare and Medicaid Innovation
    established under section 1115A of the Social Security Act.
    ``(g) Funding.--There is authorized to be appropriated to carry out
    this section $20,000,000 for fiscal years 2010 through 2014.

    ``SEC. 934. <>  QUALITY
    IMPROVEMENT TECHNICAL ASSISTANCE AND IMPLEMENTATION.

    ``(a) In General.--The Director, through the Center for Quality
    Improvement and Patient Safety of the Agency for Healthcare Research and
    Quality (referred to in this section as the `Center'), shall award--
    ``(1) technical assistance grants or contracts to eligible
    entities to provide technical support to institutions that
    deliver health care and health care providers (including rural
    and urban providers of services and suppliers with limited
    infrastructure and financial resources to implement and support
    quality improvement activities, providers of services and
    suppliers with poor performance scores, and providers of
    services and suppliers for which there are disparities in care
    among subgroups of patients) so that such institutions and
    providers understand, adapt, and implement the models and
    practices identified in the research conducted by the Center,
    including the Quality Improvement Networks Research Program; and
    ``(2) implementation grants or contracts to eligible
    entities to implement the models and practices described under
    paragraph (1).

    ``(b) Eligible Entities.--
    ``(1) Technical assistance award.--To be eligible to receive
    a technical assistance grant or contract under subsection
    (a)(1), an entity--
    ``(A) may be a health care provider, health care
    provider association, professional society, health care
    worker organization, Indian health organization, quality
    improvement organization, patient safety organization,
    local quality improvement collaborative, the Joint
    Commission, academic health center, university,
    physician-based research network, primary care extension
    program established under section 399W, a Federal Indian
    Health Service program or a health program operated by
    an Indian tribe (as defined in section 4 of the Indian
    Health Care Improvement Act), or any other entity
    identified by the Secretary; and
    ``(B) shall have demonstrated expertise in providing
    information and technical support and assistance to
    health care providers regarding quality improvement.

    [[Page 512]]

    ``(2) Implementation award.--To be eligible to receive an
    implementation grant or contract under subsection (a)(2), an
    entity--
    ``(A) may be a hospital or other health care
    provider or consortium or providers, as determined by
    the Secretary; and
    ``(B) shall have demonstrated expertise in providing
    information and technical support and assistance to
    health care providers regarding quality improvement.

    ``(c) Application.--
    ``(1) Technical assistance award.--To receive a technical
    assistance grant or contract under subsection (a)(1), an
    eligible entity shall submit an application to the Secretary at
    such time, in such manner, and containing--
    ``(A) a plan for a sustainable business model that
    may include a system of--
    ``(i) charging fees to institutions and
    providers that receive technical support from the
    entity; and
    ``(ii) reducing or eliminating such fees for
    such institutions and providers that serve low-
    income populations; and
    ``(B) such other information as the Director may
    require.
    ``(2) Implementation award.--To receive a grant or contract
    under subsection (a)(2), an eligible entity shall submit an
    application to the Secretary at such time, in such manner, and
    containing--
    ``(A) a plan for implementation of a model or
    practice identified in the research conducted by the
    Center including--
    ``(i) financial cost, staffing requirements,
    and timeline for implementation; and
    ``(ii) pre- and projected post-implementation
    quality measure performance data in targeted
    improvement areas identified by the Secretary; and
    ``(B) such other information as the Director may
    require.

    ``(d) Matching Funds.--The Director may not award a grant or
    contract under this section to an entity unless the entity agrees that
    it will make available (directly or through contributions from other
    public or private entities) non-Federal contributions toward the
    activities to be carried out under the grant or contract in an amount
    equal to $1 for each $5 of Federal funds provided under the grant or
    contract. Such non-Federal matching funds may be provided directly or
    through donations from public or private entities and may be in cash or
    in-kind, fairly evaluated, including plant, equipment, or services.
    ``(e) Evaluation.--
    ``(1) In general.--The Director shall evaluate the
    performance of each entity that receives a grant or contract
    under this section. The evaluation of an entity shall include a
    study of--
    ``(A) the success of such entity in achieving the
    implementation, by the health care institutions and
    providers assisted by such entity, of the models and
    practices identified in the research conducted by the
    Center under section 933;

    [[Page 513]]

    ``(B) the perception of the health care institutions
    and providers assisted by such entity regarding the
    value of the entity; and
    ``(C) where practicable, better patient health
    outcomes and lower cost resulting from the assistance
    provided by such entity.
    ``(2) Effect of evaluation. <> --Based
    on the outcome of the evaluation of the entity under paragraph
    (1), the Director shall determine whether to renew a grant or
    contract with such entity under this section.

    ``(f) Coordination.--The entities that receive a grant or contract
    under this section shall coordinate with health information technology
    regional extension centers under section 3012(c) and the primary care
    extension program established under section 399W regarding the
    dissemination of quality improvement, system delivery reform, and best
    practices information.''.

    SEC. 3502. <> ESTABLISHING
    COMMUNITY HEALTH TEAMS TO SUPPORT THE PATIENT-CENTERED
    MEDICAL HOME.

    (a) In General.--The Secretary of Health and Human Services
    (referred to in this section as the ``Secretary'') shall establish a
    program to provide grants to or enter into contracts with eligible
    entities to establish community-based interdisciplinary,
    interprofessional teams (referred to in this section as ``health
    teams'') to support primary care practices, including obstetrics and
    gynecology practices, within the hospital service areas served by the
    eligible entities. Grants or contracts shall be used to--
    (1) establish health teams to provide support services to
    primary care providers; and
    (2) provide capitated payments to primary care providers as
    determined by the Secretary.

    (b) Eligible Entities.--To be eligible to receive a grant or
    contract under subsection (a), an entity shall--
    (1)(A) be a State or State-designated entity; or
    (B) be an Indian tribe or tribal organization, as defined in
    section 4 of the Indian Health Care Improvement Act;
    (2) <> submit a plan for achieving
    long-term financial sustainability within 3 years;
    (3) <> submit a plan for incorporating
    prevention initiatives and patient education and care management
    resources into the delivery of health care that is integrated
    with community-based prevention and treatment resources, where
    available;
    (4) ensure that the health team established by the entity
    includes an interdisciplinary, interprofessional team of health
    care providers, as determined by the Secretary; such team may
    include medical specialists, nurses, pharmacists, nutritionists,
    dieticians, social workers, behavioral and mental health
    providers (including substance use disorder prevention and
    treatment providers), doctors of chiropractic, licensed
    complementary and alternative medicine practitioners, and
    physicians' assistants;
    (5) agree to provide services to eligible individuals with
    chronic conditions, as described in section 1945 of the Social
    Security Act (as added by section 2703), in accordance with the
    payment methodology established under subsection (c) of such
    section; and

    [[Page 514]]

    (6) submit to the Secretary an application at such time, in
    such manner, and containing such information as the Secretary
    may require.

    (c) Requirements for Health Teams.--A health team established
    pursuant to a grant or contract under subsection (a) shall--
    (1) establish contractual agreements with primary care
    providers to provide support services;
    (2) support patient-centered medical homes, defined as a
    mode of care that includes--
    (A) personal physicians;
    (B) whole person orientation;
    (C) coordinated and integrated care;
    (D) safe and high-quality care through evidence-
    informed medicine, appropriate use of health information
    technology, and continuous quality improvements;
    (E) expanded access to care; and
    (F) payment that recognizes added value from
    additional components of patient-centered care;
    (3) collaborate with local primary care providers and
    existing State and community based resources to coordinate
    disease prevention, chronic disease management, transitioning
    between health care providers and settings and case management
    for patients, including children, with priority given to those
    amenable to prevention and with chronic diseases or conditions
    identified by the Secretary;
    (4) <> in collaboration with local health care
    providers, develop and implement interdisciplinary,
    interprofessional care plans that integrate clinical and
    community preventive and health promotion services for patients,
    including children, with a priority given to those amenable to
    prevention and with chronic diseases or conditions identified by
    the Secretary;
    (5) incorporate health care providers, patients, caregivers,
    and authorized representatives in program design and oversight;
    (6) provide support necessary for local primary care
    providers to--
    (A) coordinate and provide access to high-quality
    health care services;
    (B) coordinate and provide access to preventive and
    health promotion services;
    (C) provide access to appropriate specialty care and
    inpatient services;
    (D) provide quality-driven, cost-effective,
    culturally appropriate, and patient- and family-centered
    health care;
    (E) provide access to pharmacist-delivered
    medication management services, including medication
    reconciliation;
    (F) provide coordination of the appropriate use of
    complementary and alternative (CAM) services to those
    who request such services;
    (G) promote effective strategies for treatment
    planning, monitoring health outcomes and resource use,
    sharing information, treatment decision support, and
    organizing care to avoid duplication of service and
    other medical management approaches intended to improve
    quality and value of health care services;
    (H) provide local access to the continuum of health
    care services in the most appropriate setting, including

    [[Page 515]]

    access to individuals that implement the care plans of
    patients and coordinate care, such as integrative health
    care practitioners;
    (I) collect and report data that permits evaluation
    of the success of the collaborative effort on patient
    outcomes, including collection of data on patient
    experience of care, and identification of areas for
    improvement; and
    (J) establish a coordinated system of early
    identification and referral for children at risk for
    developmental or behavioral problems such as through the
    use of infolines, health information technology, or
    other means as determined by the Secretary;
    (7) provide 24-hour care management and support during
    transitions in care settings including--
    (A) a transitional care program that provides onsite
    visits from the care coordinator, assists with the
    development of discharge plans and medication
    reconciliation upon admission to and discharge from the
    hospitals, nursing home, or other institution setting;
    (B) discharge planning and counseling support to
    providers, patients, caregivers, and authorized
    representatives;
    (C) assuring that post-discharge care plans include
    medication management, as appropriate;
    (D) referrals for mental and behavioral health
    services, which may include the use of infolines; and
    (E) transitional health care needs from adolescence
    to adulthood;
    (8) serve as a liaison to community prevention and treatment
    programs;
    (9) demonstrate a capacity to implement and maintain health
    information technology that meets the requirements of certified
    EHR technology (as defined in section 3000 of the Public Health
    Service Act (42 U.S.C. 300jj)) to facilitate coordination among
    members of the applicable care team and affiliated primary care
    practices; and
    (10) <>  where applicable, report to the
    Secretary information on quality measures used under section
    399JJ of the Public Health Service Act.

    (d) Requirement for Primary Care Providers.--A provider who
    contracts with a care team shall--
    (1) <> provide a care plan to the care team
    for each patient participant;
    (2) <> provide access to participant health
    records; and
    (3) meet regularly with the care team to ensure integration
    of care.

    (e) Reporting to Secretary.--An entity that receives a grant or
    contract under subsection (a) shall submit to the Secretary a report
    that describes and evaluates, as requested by the Secretary, the
    activities carried out by the entity under subsection (c).
    (f) Definition of Primary Care.--In this section, the term ``primary
    care'' means the provision of integrated, accessible health care
    services by clinicians who are accountable for addressing a large
    majority of personal health care needs, developing a sustained
    partnership with patients, and practicing in the context of family and
    community.

    [[Page 516]]

    SEC. 3503. MEDICATION MANAGEMENT SERVICES IN TREATMENT OF CHRONIC
    DISEASE.

    Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.),
    as amended by section 3501, is further amended by inserting after
    section 934 the following:

    ``SEC. 935. <> GRANTS OR CONTRACTS TO IMPLEMENT
    MEDICATION MANAGEMENT SERVICES IN TREATMENT OF CHRONIC
    DISEASES.

    ``(a) In General.--The Secretary, acting through the Patient Safety
    Research Center established in section 933 (referred to in this section
    as the `Center'), shall establish a program to provide grants or
    contracts to eligible entities to implement medication management
    (referred to in this section as `MTM') services provided by licensed
    pharmacists, as a collaborative, multidisciplinary, inter-professional
    approach to the treatment of chronic diseases for targeted individuals,
    to improve the quality of care and reduce overall cost in the treatment
    of such diseases. <> The Secretary shall commence the
    program under this section not later than May 1, 2010.

    ``(b) <> Eligible Entities.--To be eligible to receive
    a grant or contract under subsection (a), an entity shall--
    ``(1) provide a setting appropriate for MTM services, as
    recommended by the experts described in subsection (e);
    ``(2) submit to the Secretary a plan for achieving long-term
    financial sustainability;
    ``(3) where applicable, submit a plan for coordinating MTM
    services through local community health teams established in
    section 3502 of the Patient Protection and Affordable Care Act
    or in collaboration with primary care extension programs
    established in section 399W;
    ``(4) submit a plan for meeting the requirements under
    subsection (c); and
    ``(5) submit to the Secretary such other information as the
    Secretary may require.

    ``(c) MTM Services to Targeted Individuals.--The MTM services
    provided with the assistance of a grant or contract awarded under
    subsection (a) shall, as allowed by State law including applicable
    collaborative pharmacy practice agreements, include--
    ``(1) performing or obtaining necessary assessments of the
    health and functional status of each patient receiving such MTM
    services;
    ``(2) formulating a medication treatment plan according to
    therapeutic goals agreed upon by the prescriber and the patient
    or caregiver or authorized representative of the patient;
    ``(3) selecting, initiating, modifying, recommending changes
    to, or administering medication therapy;
    ``(4) monitoring, which may include access to, ordering, or
    performing laboratory assessments, and evaluating the response
    of the patient to therapy, including safety and effectiveness;
    ``(5) performing an initial comprehensive medication review
    to identify, resolve, and prevent medication-related problems,
    including adverse drug events, quarterly targeted medication
    reviews for ongoing monitoring, and additional followup
    interventions on a schedule developed collaboratively with the
    prescriber;

    [[Page 517]]

    ``(6) documenting the care delivered and communicating
    essential information about such care, including a summary of
    the medication review, and the recommendations of the pharmacist
    to other appropriate health care providers of the patient in a
    timely fashion;
    ``(7) providing education and training designed to enhance
    the understanding and appropriate use of the medications by the
    patient, caregiver, and other authorized representative;
    ``(8) providing information, support services, and resources
    and strategies designed to enhance patient adherence with
    therapeutic regimens;
    ``(9) coordinating and integrating MTM services within the
    broader health care management services provided to the patient;
    and
    ``(10) such other patient care services allowed under
    pharmacist scopes of practice in use in other Federal programs
    that have implemented MTM services.

    ``(d) Targeted Individuals.--MTM services provided by licensed
    pharmacists under a grant or contract awarded under subsection (a) shall
    be offered to targeted individuals who--
    ``(1) take 4 or more prescribed medications (including over-
    the-counter medications and dietary supplements);
    ``(2) take any `high risk' medications;
    ``(3) have 2 or more chronic diseases, as identified by the
    Secretary; or
    ``(4) have undergone a transition of care, or other factors,
    as determined by the Secretary, that are likely to create a high
    risk of medication-related problems.

    ``(e) Consultation With Experts.--In designing and implementing MTM
    services provided under grants or contracts awarded under subsection
    (a), the Secretary shall consult with Federal, State, private, public-
    private, and academic entities, pharmacy and pharmacist organizations,
    health care organizations, consumer advocates, chronic disease groups,
    and other stakeholders involved with the research, dissemination, and
    implementation of pharmacist-delivered MTM services, as the Secretary
    determines appropriate. <> The Secretary, in
    collaboration with this group, shall determine whether it is possible to
    incorporate rapid cycle process improvement concepts in use in other
    Federal programs that have implemented MTM services.

    ``(f) Reporting to the Secretary.--An entity that receives a grant
    or contract under subsection (a) shall submit to the Secretary a report
    that describes and evaluates, as requested by the Secretary, the
    activities carried out under subsection (c), including quality measures
    endorsed by the entity with a contract under section 1890 of the Social
    Security Act, as determined by the Secretary.
    ``(g) Evaluation and Report.--The Secretary shall submit to the
    relevant committees of Congress a report which shall--
    ``(1) assess the clinical effectiveness of pharmacist-
    provided services under the MTM services program, as compared to
    usual care, including an evaluation of whether enrollees
    maintained better health with fewer hospitalizations and
    emergency room visits than similar patients not enrolled in the
    program;
    ``(2) assess changes in overall health care resource use by
    targeted individuals;

    [[Page 518]]

    ``(3) assess patient and prescriber satisfaction with MTM
    services;
    ``(4) assess the impact of patient-cost sharing requirements
    on medication adherence and recommendations for modifications;
    ``(5) identify and evaluate other factors that may impact
    clinical and economic outcomes, including demographic
    characteristics, clinical characteristics, and health services
    use of the patient, as well as characteristics of the regimen,
    pharmacy benefit, and MTM services provided; and
    ``(6) evaluate the extent to which participating pharmacists
    who maintain a dispensing role have a conflict of interest in
    the provision of MTM services, and if such conflict is found,
    provide recommendations on how such a conflict might be
    appropriately addressed.

    ``(h) Grants or Contracts To Fund Development of Performance
    Measures.--The Secretary may, through the quality measure development
    program under section 931 of the Public Health Service Act, award grants
    or contracts to eligible entities for the purpose of funding the
    development of performance measures that assess the use and
    effectiveness of medication therapy management services.''.

    SEC. 3504. DESIGN AND IMPLEMENTATION OF REGIONALIZED SYSTEMS FOR
    EMERGENCY CARE.

    (a) In General.--Title XII of the Public Health Service Act (42
    U.S.C. 300d et seq.) is amended--
    (1) <>  in section 1203--
    (A) in the section heading, by inserting ``for
    trauma systems'' after ``grants''; and
    (B) in subsection (a), by striking ``Administrator
    of the Health Resources and Services Administration''
    and inserting ``Assistant Secretary for Preparedness and
    Response'';
    (2) by inserting after section 1203 the following:

    ``SEC. 1204. <> COMPETITIVE GRANTS FOR
    REGIONALIZED SYSTEMS FOR EMERGENCY CARE RESPONSE.

    ``(a) In General.--The Secretary, acting through the Assistant
    Secretary for Preparedness and Response, shall award not fewer than 4
    multiyear contracts or competitive grants to eligible entities to
    support pilot projects that design, implement, and evaluate innovative
    models of regionalized, comprehensive, and accountable emergency care
    and trauma systems.
    ``(b) <>  Eligible Entity; Region.--In this
    section:
    ``(1) Eligible entity.--The term `eligible entity' means--
    ``(A) a State or a partnership of 1 or more States
    and 1 or more local governments; or
    ``(B) an Indian tribe (as defined in section 4 of
    the Indian Health Care Improvement Act) or a partnership
    of 1 or more Indian tribes.
    ``(2) Region.--The term `region' means an area within a
    State, an area that lies within multiple States, or a similar
    area (such as a multicounty area), as determined by the
    Secretary.
    ``(3) Emergency services.--The term `emergency services'
    includes acute, prehospital, and trauma care.

    [[Page 519]]

    ``(c) Pilot Projects.--The Secretary shall award a contract or grant
    under subsection (a) to an eligible entity that proposes a pilot project
    to design, implement, and evaluate an emergency medical and trauma
    system that--
    ``(1) coordinates with public health and safety services,
    emergency medical services, medical facilities, trauma centers,
    and other entities in a region to develop an approach to
    emergency medical and trauma system access throughout the
    region, including 9-1-1 Public Safety Answering Points and
    emergency medical dispatch;
    ``(2) includes a mechanism, such as a regional medical
    direction or transport communications system, that operates
    throughout the region to ensure that the patient is taken to the
    medically appropriate facility (whether an initial facility or a
    higher-level facility) in a timely fashion;
    ``(3) allows for the tracking of prehospital and hospital
    resources, including inpatient bed capacity, emergency
    department capacity, trauma center capacity, on-call specialist
    coverage, ambulance diversion status, and the coordination of
    such tracking with regional communications and hospital
    destination decisions; and
    ``(4) includes a consistent region-wide prehospital,
    hospital, and interfacility data management system that--
    ``(A) submits data to the National EMS Information
    System, the National Trauma Data Bank, and others;
    ``(B) reports data to appropriate Federal and State
    databanks and registries; and
    ``(C) contains information sufficient to evaluate
    key elements of prehospital care, hospital destination
    decisions, including initial hospital and interfacility
    decisions, and relevant health outcomes of hospital
    care.

    ``(d) Application.--
    ``(1) In general.--An eligible entity that seeks a contract
    or grant described in subsection (a) shall submit to the
    Secretary an application at such time and in such manner as the
    Secretary may require.
    ``(2) Application information.--Each application shall
    include--
    ``(A) an assurance from the eligible entity that the
    proposed system--
    ``(i) has been coordinated with the applicable
    State Office of Emergency Medical Services (or
    equivalent State office);
    ``(ii) includes consistent indirect and direct
    medical oversight of prehospital, hospital, and
    interfacility transport throughout the region;
    ``(iii) coordinates prehospital treatment and
    triage, hospital destination, and interfacility
    transport throughout the region;
    ``(iv) includes a categorization or
    designation system for special medical facilities
    throughout the region that is integrated with
    transport and destination protocols;
    ``(v) includes a regional medical direction,
    patient tracking, and resource allocation system
    that supports day-to-day emergency care and surge
    capacity and is

    [[Page 520]]

    integrated with other components of the national
    and State emergency preparedness system; and
    ``(vi) addresses pediatric concerns related to
    integration, planning, preparedness, and
    coordination of emergency medical services for
    infants, children and adolescents; and
    ``(B) such other information as the Secretary may
    require.

    ``(e) Requirement of Matching Funds.--
    ``(1) In general.--The Secretary may not make a grant under
    this section unless the State (or consortia of States) involved
    agrees, with respect to the costs to be incurred by the State
    (or consortia) in carrying out the purpose for which such grant
    was made, to make available non-Federal contributions (in cash
    or in kind under paragraph (2)) toward such costs in an amount
    equal to not less than $1 for each $3 of Federal funds provided
    in the grant. Such contributions may be made directly or through
    donations from public or private entities.
    ``(2) Non-federal contributions.--Non-Federal contributions
    required in paragraph (1) may be in cash or in kind, fairly
    evaluated, including equipment or services (and excluding
    indirect or overhead costs). Amounts provided by the Federal
    Government, or services assisted or subsidized to any
    significant extent by the Federal Government, may not be
    included in determining the amount of such non-Federal
    contributions.

    ``(f) Priority.--The Secretary shall give priority for the award of
    the contracts or grants described in subsection (a) to any eligible
    entity that serves a population in a medically underserved area (as
    defined in section 330(b)(3)).
    ``(g) Report.--Not later than 90 days after the completion of a
    pilot project under subsection (a), the recipient of such contract or
    grant described in shall submit to the Secretary a report containing the
    results of an evaluation of the program, including an identification
    of--
    ``(1) the impact of the regional, accountable emergency care
    and trauma system on patient health outcomes for various
    critical care categories, such as trauma, stroke, cardiac
    emergencies, neurological emergencies, and pediatric
    emergencies;
    ``(2) the system characteristics that contribute to the
    effectiveness and efficiency of the program (or lack thereof);
    ``(3) methods of assuring the long-term financial
    sustainability of the emergency care and trauma system;
    ``(4) the State and local legislation necessary to implement
    and to maintain the system;
    ``(5) the barriers to developing regionalized, accountable
    emergency care and trauma systems, as well as the methods to
    overcome such barriers; and
    ``(6) recommendations on the utilization of available
    funding for future regionalization efforts.

    ``(h) Dissemination of Findings.--The <> Secretary shall, as appropriate, disseminate to the
    public and to the appropriate Committees of the Congress, the
    information contained in a report made under subsection (g).''; and
    (3) in <> section 1232--
    (A) in subsection (a), by striking ``appropriated''
    and all that follows through the period at the end and
    inserting

    [[Page 521]]

    ``appropriated $24,000,000 for each of fiscal years 2010
    through 2014.''; and
    (B) by inserting after subsection (c) the following:

    ``(d) Authority.--For <> the purpose of
    carrying out parts A through C, beginning on the date of enactment of
    the Patient Protection and Affordable Care Act, the Secretary shall
    transfer authority in administering grants and related authorities under
    such parts from the Administrator of the Health Resources and Services
    Administration to the Assistant Secretary for Preparedness and
    Response.''.

    (b) Support for Emergency Medicine Research.--Part H of title IV of
    the Public Health Service Act (42 U.S.C. 289 et seq.) is amended by
    inserting after the section 498C the following:

    ``SEC. 498D. <> SUPPORT FOR EMERGENCY MEDICINE
    RESEARCH.

    ``(a) Emergency Medical Research.--The Secretary shall support
    Federal programs administered by the National Institutes of Health, the
    Agency for Healthcare Research and Quality, the Health Resources and
    Services Administration, the Centers for Disease Control and Prevention,
    and other agencies involved in improving the emergency care system to
    expand and accelerate research in emergency medical care systems and
    emergency medicine, including--
    ``(1) the basic science of emergency medicine;
    ``(2) the model of service delivery and the components of
    such models that contribute to enhanced patient health outcomes;
    ``(3) the translation of basic scientific research into
    improved practice; and
    ``(4) the development of timely and efficient delivery of
    health services.

    ``(b) Pediatric Emergency Medical Research.--The Secretary shall
    support Federal programs administered by the National Institutes of
    Health, the Agency for Healthcare Research and Quality, the Health
    Resources and Services Administration, the Centers for Disease Control
    and Prevention, and other agencies to coordinate and expand research in
    pediatric emergency medical care systems and pediatric emergency
    medicine, including--
    ``(1) an examination of the gaps and opportunities in
    pediatric emergency care research and a strategy for the optimal
    organization and funding of such research;
    ``(2) the role of pediatric emergency services as an
    integrated component of the overall health system;
    ``(3) system-wide pediatric emergency care planning,
    preparedness, coordination, and funding;
    ``(4) pediatric training in professional education; and
    ``(5) research in pediatric emergency care, specifically on
    the efficacy, safety, and health outcomes of medications used
    for infants, children, and adolescents in emergency care
    settings in order to improve patient safety.

    ``(c) Impact Research.--The Secretary shall support research to
    determine the estimated economic impact of, and savings that result
    from, the implementation of coordinated emergency care systems.
    ``(d) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary for
    each of fiscal years 2010 through 2014.''.

    [[Page 522]]

    SEC. 3505. TRAUMA CARE CENTERS AND SERVICE AVAILABILITY.

    (a) Trauma Care Centers.--
    (1) Grants for trauma care centers.--Section 1241 of the
    Public Health Service Act (42 U.S.C. 300d-41) is amended by
    striking subsections (a) and (b) and inserting the following:

    ``(a) In General.--The Secretary shall establish 3 programs to award
    grants to qualified public, nonprofit Indian Health Service, Indian
    tribal, and urban Indian trauma centers--
    ``(1) to assist in defraying substantial uncompensated care
    costs;
    ``(2) to further the core missions of such trauma centers,
    including by addressing costs associated with patient
    stabilization and transfer, trauma education and outreach,
    coordination with local and regional trauma systems, essential
    personnel and other fixed costs, and expenses associated with
    employee and non-employee physician services; and
    ``(3) to provide emergency relief to ensure the continued
    and future availability of trauma services.

    ``(b) Minimum Qualifications of Trauma Centers.--
    ``(1) Participation in trauma care system operating under
    certain professional guidelines.--Except as provided in
    paragraph (2), the Secretary may not award a grant to a trauma
    center under subsection (a) unless the trauma center is a
    participant in a trauma system that substantially complies with
    section 1213.
    ``(2) Exemption.--Paragraph (1) shall not apply to trauma
    centers that are located in States with no existing trauma care
    system.
    ``(3) Qualification for substantial uncompensated care
    costs.--The Secretary shall award substantial uncompensated care
    grants under subsection (a)(1) only to trauma centers meeting at
    least 1 of the criteria in 1 of the following 3 categories:
    ``(A) Category a.--The criteria for category A are
    as follows:
    ``(i) At least 40 percent of the visits in the
    emergency department of the hospital in which the
    trauma center is located were charity or self-pay
    patients.
    ``(ii) At least 50 percent of the visits in
    such emergency department were Medicaid (under
    title XIX of the Social Security Act (42 U.S.C.
    1396 et seq.)) and charity and self-pay patients
    combined.
    ``(B) Category b.--The criteria for category B are
    as follows:
    ``(i) At least 35 percent of the visits in the
    emergency department were charity or self-pay
    patients.
    ``(ii) At least 50 percent of the visits in
    the emergency department were Medicaid and charity
    and self-pay patients combined.
    ``(C) Category c.--The criteria for category C are
    as follows:
    ``(i) At least 20 percent of the visits in the
    emergency department were charity or self-pay
    patients.
    ``(ii) At least 30 percent of the visits in
    the emergency department were Medicaid and charity
    and self-pay patients combined.

    [[Page 523]]

    ``(4) Trauma centers in 1115 waiver states.--Notwithstanding
    paragraph (3), the Secretary may award a substantial
    uncompensated care grant to a trauma center under subsection
    (a)(1) if the trauma center qualifies for funds under a Low
    Income Pool or Safety Net Care Pool established through a waiver
    approved under section 1115 of the Social Security Act (42
    U.S.C. 1315).
    ``(5) Designation.--The Secretary may not award a grant to a
    trauma center unless such trauma center is verified by the
    American College of Surgeons or designated by an equivalent
    State or local agency.

    ``(c) Additional Requirements.--The Secretary may not award a grant
    to a trauma center under subsection (a)(1) unless such trauma center--
    ``(1) submits <> to the Secretary a plan
    satisfactory to the Secretary that demonstrates a continued
    commitment to serving trauma patients regardless of their
    ability to pay; and
    ``(2) has policies in place to assist patients who cannot
    pay for part or all of the care they receive, including a
    sliding fee scale, and to ensure fair billing and collection
    practices.''.
    (2) Considerations in making grants.--Section 1242 of the
    Public Health Service Act (42 U.S.C. 300d-42) is amended by
    striking subsections (a) and (b) and inserting the following:

    ``(a) Substantial Uncompensated Care Awards.--
    ``(1) In general.--The Secretary shall establish an award
    basis for each eligible trauma center for grants under section
    1241(a)(1) according to the percentage described in paragraph
    (2), subject to the requirements of section 1241(b)(3).
    ``(2) Percentages.--The applicable percentages are as
    follows:
    ``(A) With respect to a category A trauma center,
    100 percent of the uncompensated care costs.
    ``(B) With respect to a category B trauma center,
    not more than 75 percent of the uncompensated care
    costs.
    ``(C) With respect to a category C trauma center,
    not more than 50 percent of the uncompensated care
    costs.

    ``(b) Core Mission Awards.--
    ``(1) In general.--In awarding grants under section
    1241(a)(2), the Secretary shall--
    ``(A) reserve 25 percent of the amount allocated for
    core mission awards for Level III and Level IV trauma
    centers; and
    ``(B) reserve 25 percent of the amount allocated for
    core mission awards for large urban Level I and II
    trauma centers--
    ``(i) that have at least 1 graduate medical
    education fellowship in trauma or trauma related
    specialties for which demand is exceeding supply;
    ``(ii) for which--
    ``(I) annual uncompensated care
    costs exceed $10,000,000; or
    ``(II) at least 20 percent of
    emergency department visits are charity
    or self-pay or Medicaid patients; and
    ``(iii) that are not eligible for substantial
    uncompensated care awards under section
    1241(a)(1).

    [[Page 524]]

    ``(c) Emergency Awards.--In awarding grants under section
    1241(a)(3), the Secretary shall--
    ``(1) give preference to any application submitted by a
    trauma center that provides trauma care in a geographic area in
    which the availability of trauma care has significantly
    decreased or will significantly decrease if the center is forced
    to close or downgrade service or growth in demand for trauma
    services exceeds capacity; and
    ``(2) reallocate any emergency awards funds not obligated
    due to insufficient, or a lack of qualified, applications to the
    significant uncompensated care award program.''.
    (3) Certain agreements.--Section 1243 of the Public Health
    Service Act (42 U.S.C. 300d-43) is amended by striking
    subsections (a), (b), and (c) and inserting the following:

    ``(a) Maintenance of Financial Support.--The Secretary may require a
    trauma center receiving a grant under section 1241(a) to maintain access
    to trauma services at comparable levels to the prior year during the
    grant period.
    ``(b) Trauma Care Registry.--The Secretary may require the trauma
    center receiving a grant under section 1241(a) to provide data to a
    national and centralized registry of trauma cases, in accordance with
    guidelines developed by the American College of Surgeons, and as the
    Secretary may otherwise require.''.
    (4) General provisions.--Section 1244 of the Public Health
    Service Act (42 U.S.C. 300d-44) is amended by striking
    subsections (a), (b), and (c) and inserting the following:

    ``(a) Application.--The Secretary may not award a grant to a trauma
    center under section 1241(a) unless such center submits an application
    for the grant to the Secretary and the application is in such form, is
    made in such manner, and contains such agreements, assurances, and
    information as the Secretary determines to be necessary to carry out
    this part.
    ``(b) Limitation on Duration of Support.--The period <> during which a trauma center receives payments under a
    grant under section 1241(a)(3) shall be for 3 fiscal years, except that
    the Secretary may waive such requirement for a center and authorize such
    center to receive such payments for 1 additional fiscal year.

    ``(c) Limitation on Amount of Grant.--Notwithstanding section
    1242(a), a grant under section 1241 may not be made in an amount
    exceeding $2,000,000 for each fiscal year.
    ``(d) Eligibility.--Except as provided in section
    1242(b)(1)(B)(iii), acquisition of, or eligibility for, a grant under
    section 1241(a) shall not preclude a trauma center from being eligible
    for other grants described in such section.
    ``(e) Funding Distribution.--Of the total amount appropriated for a
    fiscal year under section 1245, 70 percent shall be used for substantial
    uncompensated care awards under section 1241(a)(1), 20 percent shall be
    used for core mission awards under section 1241(a)(2), and 10 percent
    shall be used for emergency awards under section 1241(a)(3).
    ``(f) Minimum Allowance.--Notwithstanding subsection (e), if the
    amount appropriated for a fiscal year under section 1245 is less than
    $25,000,000, all available funding for such fiscal year shall be used
    for substantial uncompensated care awards under section 1241(a)(1).
    ``(g) Substantial Uncompensated Care Award Distribution and
    Proportional Share.--Notwithstanding section 1242(a), of

    [[Page 525]]

    the amount appropriated for substantial uncompensated care grants for a
    fiscal year, the Secretary shall--
    ``(1) make available--
    ``(A) 50 percent of such funds for category A trauma
    center grantees;
    ``(B) 35 percent of such funds for category B trauma
    center grantees; and
    ``(C) 15 percent of such funds for category C trauma
    center grantees; and
    ``(2) provide available funds within each category in a
    manner proportional to the award basis specified in section
    1242(a)(2) to each eligible trauma center.

    ``(h) Report.--Beginning 2 years after the date of enactment of the
    Patient Protection and Affordable Care Act, and every 2 years
    thereafter, the Secretary shall biennially report to Congress regarding
    the status of the grants made under section 1241 and on the overall
    financial stability of trauma centers.''.
    (5) Authorization of appropriations.--Section 1245 of the
    Public Health Service Act (42 U.S.C. 300d-45) is amended to read
    as follows:

    ``SEC. 1245. <> AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized to
    be appropriated $100,000,000 for fiscal year 2009, and such sums as may
    be necessary for each of fiscal years 2010 through 2015. Such
    authorization of appropriations is in addition to any other
    authorization of appropriations or amounts that are available for such
    purpose.''.
    (6) Definition.--Part D of title XII of the Public Health
    Service Act (42 U.S.C. 300d-41 et seq.) is amended by adding at
    the end the following:

    ``SEC. 1246. <> DEFINITION.

    ``In this part, the term `uncompensated care costs' means
    unreimbursed costs from serving self-pay, charity, or Medicaid patients,
    without regard to payment under section 1923 of the Social Security Act,
    all of which are attributable to emergency care and trauma care,
    including costs related to subsequent inpatient admissions to the
    hospital.''.
    (b) Trauma Service Availability.--Title XII of the Public Health
    Service Act (42 U.S.C. 300d et seq.) is amended by adding at the end the
    following:

    ``PART H--TRAUMA SERVICE AVAILABILITY

    ``SEC. 1281. <> GRANTS TO STATES.

    ``(a) Establishment.--To promote universal access to trauma care
    services provided by trauma centers and trauma-related physician
    specialties, the Secretary shall provide funding to States to enable
    such States to award grants to eligible entities for the purposes
    described in this section.
    ``(b) Awarding of Grants by States.--Each State may award grants to
    eligible entities within the State for the purposes described in
    subparagraph (d).
    ``(c) Eligibility.--
    ``(1) In general.--To be eligible to receive a grant under
    subsection (b) an entity shall--
    ``(A) be--

    [[Page 526]]

    ``(i) a public or nonprofit trauma center or
    consortium thereof that meets that requirements of
    paragraphs (1), (2), and (5) of section 1241(b);
    ``(ii) a safety net public or nonprofit trauma
    center that meets the requirements of paragraphs
    (1) through (5) of section 1241(b); or
    ``(iii) a hospital in an underserved area (as
    defined by the State) that seeks to establish new
    trauma services; and
    ``(B) submit to the State an application at such
    time, in such manner, and containing such information as
    the State may require.
    ``(2) Limitation.--A State shall use at least 40 percent of
    the amount available to the State under this part for a fiscal
    year to award grants to safety net trauma centers described in
    paragraph (1)(A)(ii).

    ``(d) Use of Funds.--The recipient of a grant under subsection (b)
    shall carry out 1 or more of the following activities consistent with
    subsection (b):
    ``(1) Providing trauma centers with funding to support
    physician compensation in trauma-related physician specialties
    where shortages exist in the region involved, with priority
    provided to safety net trauma centers described in subsection
    (c)(1)(A)(ii).
    ``(2) Providing for individual safety net trauma center
    fiscal stability and costs related to having service that is
    available 24 hours a day, 7 days a week, with priority provided
    to safety net trauma centers described in subsection
    (c)(1)(A)(ii) located in urban, border, and rural areas.
    ``(3) Reducing trauma center overcrowding at specific trauma
    centers related to throughput of trauma patients.
    ``(4) Establishing new trauma services in underserved areas
    as defined by the State.
    ``(5) Enhancing collaboration between trauma centers and
    other hospitals and emergency medical services personnel related
    to trauma service availability.
    ``(6) Making capital improvements to enhance access and
    expedite trauma care, including providing helipads and
    associated safety infrastructure.
    ``(7) Enhancing trauma surge capacity at specific trauma
    centers.
    ``(8) Ensuring expedient receipt of trauma patients
    transported by ground or air to the appropriate trauma center.
    ``(9) Enhancing interstate trauma center collaboration.

    ``(e) Limitation.--
    ``(1) In general.--A State may use not more than 20 percent
    of the amount available to the State under this part for a
    fiscal year for administrative costs associated with awarding
    grants and related costs.
    ``(2) Maintenance of effort.--The Secretary may not provide
    funding to a State under this part unless the State agrees that
    such funds will be used to supplement and not supplant State
    funding otherwise available for the activities and costs
    described in this part.

    ``(f) Distribution of Funds.--The <> following
    shall apply with respect to grants provided in this part:

    [[Page 527]]

    ``(1) Less than $10,000,000.--If the amount of
    appropriations for this part in a fiscal year is less than
    $10,000,000, the Secretary shall divide such funding evenly
    among only those States that have 1 or more trauma centers
    eligible for funding under section 1241(b)(3)(A).
    ``(2) Less than $20,000,000.--If the amount of
    appropriations in a fiscal year is less than $20,000,000, the
    Secretary shall divide such funding evenly among only those
    States that have 1 or more trauma centers eligible for funding
    under subparagraphs (A) and (B) of section 1241(b)(3).
    ``(3) Less than $30,000,000.--If the amount of
    appropriations for this part in a fiscal year is less than
    $30,000,000, the Secretary shall divide such funding evenly
    among only those States that have 1 or more trauma centers
    eligible for funding under section 1241(b)(3).
    ``(4) $30,000,000 or more.--If the amount of appropriations
    for this part in a fiscal year is $30,000,000 or more, the
    Secretary shall divide such funding evenly among all States.

    ``SEC. 1282. <> AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there is authorized to
    be appropriated $100,000,000 for each of fiscal years 2010 through
    2015.''.

    SEC. 3506. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

    Part D of title IX of the Public Health Service Act, as amended by
    section 3503, is further amended by adding at the end the following:

    ``SEC. 936. <> PROGRAM TO FACILITATE SHARED
    DECISIONMAKING.

    ``(a) Purpose.--The purpose of this section is to facilitate
    collaborative processes between patients, caregivers or authorized
    representatives, and clinicians that engages the patient, caregiver or
    authorized representative in decisionmaking, provides patients,
    caregivers or authorized representatives with information about trade-
    offs among treatment options, and facilitates the incorporation of
    patient preferences and values into the medical plan.
    ``(b) Definitions.--In this section:
    ``(1) Patient decision aid.--The term `patient decision aid'
    means an educational tool that helps patients, caregivers or
    authorized representatives understand and communicate their
    beliefs and preferences related to their treatment options, and
    to decide with their health care provider what treatments are
    best for them based on their treatment options, scientific
    evidence, circumstances, beliefs, and preferences.
    ``(2) Preference sensitive care.--The term `preference
    sensitive care' means medical care for which the clinical
    evidence does not clearly support one treatment option such that
    the appropriate course of treatment depends on the values of the
    patient or the preferences of the patient, caregivers or
    authorized representatives regarding the benefits, harms and
    scientific evidence for each treatment option, the use of such
    care should depend on the informed patient choice among
    clinically appropriate treatment options.

    ``(c) Establishment of Independent Standards for Patient Decision
    Aids for Preference Sensitive Care.--
    ``(1) Contract with entity to establish standards and
    certify patient decision aids.--

    [[Page 528]]

    ``(A) In general.--For purposes of supporting
    consensus-based standards for patient decision aids for
    preference sensitive care and a certification process
    for patient decision aids for use in the Federal health
    programs and by other interested parties, the Secretary
    shall have in effect a contract with the entity with a
    contract under section 1890 of the Social Security Act.
    Such contract shall provide that the entity perform the
    duties described in paragraph (2).
    ``(B) Timing for first contract.--As soon as
    practicable after the date of the enactment of this
    section, the Secretary shall enter into the first
    contract under subparagraph (A).
    ``(C) Period of contract.--A contract under
    subparagraph (A) shall be for a period of 18 months
    (except such contract may be renewed after a subsequent
    bidding process).
    ``(2) Duties.--The following duties are described in this
    paragraph:
    ``(A) Develop and identify standards for patient
    decision aids.--The entity shall synthesize evidence and
    convene a broad range of experts and key stakeholders to
    develop and identify consensus-based standards to
    evaluate patient decision aids for preference sensitive
    care.
    ``(B) Endorse patient decision aids.--The entity
    shall review patient decision aids and develop a
    certification process whether patient decision aids meet
    the standards developed and identified under
    subparagraph (A). The entity shall give priority to the
    review and certification of patient decision aids for
    preference sensitive care.

    ``(d) Program <> To Develop, Update and
    Patient Decision Aids To Assist Health Care Providers and Patients.--
    ``(1) In general.--The Secretary, acting through the
    Director, and in coordination with heads of other relevant
    agencies, such as the Director of the Centers for Disease
    Control and Prevention and the Director of the National
    Institutes of Health, shall establish a program to award grants
    or contracts--
    ``(A) to develop, update, and produce patient
    decision aids for preference sensitive care to assist
    health care providers in educating patients, caregivers,
    and authorized representatives concerning the relative
    safety, relative effectiveness (including possible
    health outcomes and impact on functional status), and
    relative cost of treatment or, where appropriate,
    palliative care options;
    ``(B) to test such materials to ensure such
    materials are balanced and evidence based in aiding
    health care providers and patients, caregivers, and
    authorized representatives to make informed decisions
    about patient care and can be easily incorporated into a
    broad array of practice settings; and
    ``(C) to educate providers on the use of such
    materials, including through academic curricula.
    ``(2) Requirements for patient decision aids.--Patient
    decision aids developed and produced pursuant to a grant or
    contract under paragraph (1)--

    [[Page 529]]

    ``(A) shall be designed to engage patients,
    caregivers, and authorized representatives in informed
    decisionmaking with health care providers;
    ``(B) shall present up-to-date clinical evidence
    about the risks and benefits of treatment options in a
    form and manner that is age-appropriate and can be
    adapted for patients, caregivers, and authorized
    representatives from a variety of cultural and
    educational backgrounds to reflect the varying needs of
    consumers and diverse levels of health literacy;
    ``(C) shall, where appropriate, explain why there is
    a lack of evidence to support one treatment option over
    another; and
    ``(D) shall address health care decisions across the
    age span, including those affecting vulnerable
    populations including children.
    ``(3) Distribution.--The Director shall ensure that patient
    decision aids produced with grants or contracts under this
    section are available to the public.
    ``(4) Nonduplication of efforts.--The Director shall ensure
    that the activities under this section of the Agency and other
    agencies, including the Centers for Disease Control and
    Prevention and the National Institutes of Health, are free of
    unnecessary duplication of effort.

    ``(e) Grants To Support Shared Decisionmaking Implementation.--
    ``(1) In general.--The Secretary shall establish a program
    to provide for the phased-in development, implementation, and
    evaluation of shared decisionmaking using patient decision aids
    to meet the objective of improving the understanding of patients
    of their medical treatment options.
    ``(2) Shared decisionmaking resource centers.--
    ``(A) In general.--The Secretary shall provide
    grants for the establishment and support of Shared
    Decisionmaking Resource Centers (referred to in this
    subsection as `Centers') to provide technical assistance
    to providers and to develop and disseminate best
    practices and other information to support and
    accelerate adoption, implementation, and effective use
    of patient decision aids and shared decisionmaking by
    providers.
    ``(B) Objectives.--The objective of a Center is to
    enhance and promote the adoption of patient decision
    aids and shared decisionmaking through--
    ``(i) providing assistance to eligible
    providers with the implementation and effective
    use of, and training on, patient decision aids;
    and
    ``(ii) the dissemination of best practices and
    research on the implementation and effective use
    of patient decision aids.
    ``(3) Shared decisionmaking participation grants.--
    ``(A) In general.--The Secretary shall provide
    grants to health care providers for the development and
    implementation of shared decisionmaking techniques and
    to assess the use of such techniques.
    ``(B) Preference.--In order to facilitate the use of
    best practices, the Secretary shall provide a preference
    in making grants under this subsection to health care

    [[Page 530]]

    providers who participate in training by Shared
    Decisionmaking Resource Centers or comparable training.
    ``(C) Limitation.--Funds under this paragraph shall
    not be used to purchase or implement use of patient
    decision aids other than those certified under the
    process identified in subsection (c).
    ``(4) Guidance.--The Secretary may issue guidance to
    eligible grantees under this subsection on the use of patient
    decision aids.

    ``(f) Funding.--For purposes of carrying out this section there are
    authorized to be appropriated such sums as may be necessary for fiscal
    year 2010 and each subsequent fiscal year.''.

    SEC. 3507. PRESENTATION <> OF PRESCRIPTION DRUG
    BENEFIT AND RISK INFORMATION.

    (a) In General.--The <> Secretary of Health
    and Human Services (referred to in this section as the ``Secretary''),
    acting through the Commissioner of Food and Drugs, shall determine
    whether the addition of quantitative summaries of the benefits and risks
    of prescription drugs in a standardized format (such as a table or drug
    facts box) to the promotional labeling or print advertising of such
    drugs would improve health care decisionmaking by clinicians and
    patients and consumers.

    (b) Review and Consultation.--In making the determination under
    subsection (a), the Secretary shall review all available scientific
    evidence and research on decisionmaking and social and cognitive
    psychology and consult with drug manufacturers, clinicians, patients and
    consumers, experts in health literacy, representatives of racial and
    ethnic minorities, and experts in women's and pediatric health.
    (c) Report.--Not later than 1 year after the date of enactment of
    this Act, the Secretary shall submit to Congress a report that
    provides--
    (1) the determination by the Secretary under subsection (a);
    and
    (2) the reasoning and analysis underlying that
    determination.

    (d) Authority.--If the <> Secretary
    determines under subsection (a) that the addition of quantitative
    summaries of the benefits and risks of prescription drugs in a
    standardized format (such as a table or drug facts box) to the
    promotional labeling or print advertising of such drugs would improve
    health care decisionmaking by clinicians and patients and consumers,
    then the Secretary, not later than 3 years after the date of submission
    of the report under subsection (c), shall promulgate proposed
    regulations as necessary to implement such format.

    (e) Clarification.--Nothing in this section shall be construed to
    restrict the existing authorities of the Secretary with respect to
    benefit and risk information.

    SEC. 3508. DEMONSTRATION <> PROGRAM TO INTEGRATE
    QUALITY IMPROVEMENT AND PATIENT SAFETY TRAINING INTO
    CLINICAL EDUCATION OF HEALTH PROFESSIONALS.

    (a) In General.--The Secretary may award grants to eligible entities
    or consortia under this section to carry out demonstration projects to
    develop and implement academic curricula that integrates quality
    improvement and patient safety in the clinical

    [[Page 531]]

    education of health professionals. Such awards shall be made on a
    competitive basis and pursuant to peer review.
    (b) Eligibility.--To be eligible to receive a grant under subsection
    (a), an entity or consortium shall--
    (1) submit to the Secretary an application at such time, in
    such manner, and containing such information as the Secretary
    may require;
    (2) be or include--
    (A) a health professions school;
    (B) a school of public health;
    (C) a school of social work;
    (D) a school of nursing;
    (E) a school of pharmacy;
    (F) an institution with a graduate medical education
    program; or
    (G) a school of health care administration;
    (3) collaborate in the development of curricula described in
    subsection (a) with an organization that accredits such school
    or institution;
    (4) provide for the collection of data regarding the
    effectiveness of the demonstration project; and
    (5) provide matching funds in accordance with subsection
    (c).

    (c) Matching Funds.--
    (1) In general.--The Secretary may award a grant to an
    entity or consortium under this section only if the entity or
    consortium agrees to make available non-Federal contributions
    toward the costs of the program to be funded under the grant in
    an amount that is not less than $1 for each $5 of Federal funds
    provided under the grant.
    (2) Determination of amount contributed.--Non-Federal
    contributions under paragraph (1) may be in cash or in-kind,
    fairly evaluated, including equipment or services. Amounts
    provided by the Federal Government, or services assisted or
    subsidized to any significant extent by the Federal Government,
    may not be included in determining the amount of such
    contributions.

    (d) Evaluation.--The <> Secretary shall take such action as may be necessary to
    evaluate the projects funded under this section and publish, make
    publicly available, and disseminate the results of such evaluations on
    as wide a basis as is practicable.

    (e) Reports.--Not later than 2 years after the date of enactment of
    this section, and annually thereafter, the Secretary shall submit to the
    Committee on Health, Education, Labor, and Pensions and the Committee on
    Finance of the Senate and the Committee on Energy and Commerce and the
    Committee on Ways and Means of the House of Representatives a report
    that--
    (1) describes the specific projects supported under this
    section; and
    (2) contains recommendations for Congress based on the
    evaluation conducted under subsection (d).

    SEC. 3509. IMPROVING WOMEN'S HEALTH.

    (a) Health and Human Services Office on Women's Health.--

    [[Page 532]]

    (1) Establishment.--Part A of title II of the Public Health
    Service Act (42 U.S.C. 202 et seq.) is amended by adding at the
    end the following:

    ``SEC. 229. HEALTH <> AND HUMAN SERVICES OFFICE ON
    WOMEN'S HEALTH.

    ``(a) Establishment of Office.--There is established within the
    Office of the Secretary, an Office on Women's Health (referred to in
    this section as the `Office'). The Office shall be headed by a Deputy
    Assistant Secretary for Women's Health who may report to the Secretary.
    ``(b) Duties.--The Secretary, acting through the Office, with
    respect to the health concerns of women, shall--
    ``(1) establish short-range and long-range goals and
    objectives within the Department of Health and Human Services
    and, as relevant and appropriate, coordinate with other
    appropriate offices on activities within the Department that
    relate to disease prevention, health promotion, service
    delivery, research, and public and health care professional
    education, for issues of particular concern to women throughout
    their lifespan;
    ``(2) provide expert advice and consultation to the
    Secretary concerning scientific, legal, ethical, and policy
    issues relating to women's health;
    ``(3) monitor the Department of Health and Human Services'
    offices, agencies, and regional activities regarding women's
    health and identify needs regarding the coordination of
    activities, including intramural and extramural
    multidisciplinary activities;
    ``(4) establish a Department of Health and Human Services
    Coordinating Committee on Women's Health, which shall be chaired
    by the Deputy Assistant Secretary for Women's Health and
    composed of senior level representatives from each of the
    agencies and offices of the Department of Health and Human
    Services;
    ``(5) establish <> a National Women's
    Health Information Center to--
    ``(A) facilitate the exchange of information
    regarding matters relating to health information, health
    promotion, preventive health services, research
    advances, and education in the appropriate use of health
    care;
    ``(B) facilitate access to such information;
    ``(C) assist in the analysis of issues and problems
    relating to the matters described in this paragraph; and
    ``(D) provide technical assistance with respect to
    the exchange of information (including facilitating the
    development of materials for such technical assistance);
    ``(6) coordinate efforts to promote women's health programs
    and policies with the private sector; and
    ``(7) through publications and any other means appropriate,
    provide for the exchange of information between the Office and
    recipients of grants, contracts, and agreements under subsection
    (c), and between the Office and health professionals and the
    general public.

    ``(c) Grants and Contracts Regarding Duties.--

    [[Page 533]]

    ``(1) Authority.--In carrying out subsection (b), the
    Secretary may make grants to, and enter into cooperative
    agreements, contracts, and interagency agreements with, public
    and private entities, agencies, and organizations.
    ``(2) Evaluation and dissemination.--The Secretary shall
    directly or through contracts with public and private entities,
    agencies, and organizations, provide for evaluations of projects
    carried out with financial assistance provided under paragraph
    (1) and for the dissemination of information developed as a
    result of such projects.

    ``(d) Reports.--Not later than 1 year after the date of enactment of
    this section, and every second year thereafter, the Secretary shall
    prepare and submit to the appropriate committees of Congress a report
    describing the activities carried out under this section during the
    period for which the report is being prepared.
    ``(e) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated such sums as
    may be necessary for each of the fiscal years 2010 through 2014.''.
    (2) Transfer of functions.--There <> are transferred to the Office on Women's Health
    (established under section 229 of the Public Health Service Act,
    as added by this section), all functions exercised by the Office
    on Women's Health of the Public Health Service prior to the date
    of enactment of this section, including all personnel and
    compensation authority, all delegation and assignment authority,
    and all remaining appropriations. All orders, determinations,
    rules, regulations, permits, agreements, grants, contracts,
    certificates, licenses, registrations, privileges, and other
    administrative actions that--
    (A) have been issued, made, granted, or allowed to
    become effective by the President, any Federal agency or
    official thereof, or by a court of competent
    jurisdiction, in the performance of functions
    transferred under this paragraph; and
    (B) are in effect at the time this section takes
    effect, or were final before the date of enactment of
    this section and are to become effective on or after
    such date,
    shall continue in effect according to their terms until
    modified, terminated, superseded, set aside, or revoked in
    accordance with law by the President, the Secretary, or other
    authorized official, a court of competent jurisdiction, or by
    operation of law.

    (b) Centers for Disease Control and Prevention Office of Women's
    Health.--Part A of title III of the Public Health Service Act (42 U.S.C.
    241 et seq.) is amended by adding at the end the following:

    ``SEC. 310A. CENTERS <> FOR DISEASE CONTROL AND
    PREVENTION OFFICE OF WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the
    Director of the Centers for Disease Control and Prevention, an office to
    be known as the Office of Women's Health (referred to in this section as
    the `Office'). The Office shall be headed by a director who shall be
    appointed by the Director of such Centers.
    ``(b) Purpose.--The Director of the Office shall--

    [[Page 534]]

    ``(1) report to the Director of the Centers for Disease
    Control and Prevention on the current level of the Centers'
    activity regarding women's health conditions across, where
    appropriate, age, biological, and sociocultural contexts, in all
    aspects of the Centers' work, including prevention programs,
    public and professional education, services, and treatment;
    ``(2) establish short-range and long-range goals and
    objectives within the Centers for women's health and, as
    relevant and appropriate, coordinate with other appropriate
    offices on activities within the Centers that relate to
    prevention, research, education and training, service delivery,
    and policy development, for issues of particular concern to
    women;
    ``(3) identify projects in women's health that should be
    conducted or supported by the Centers;
    ``(4) consult with health professionals, nongovernmental
    organizations, consumer organizations, women's health
    professionals, and other individuals and groups, as appropriate,
    on the policy of the Centers with regard to women; and
    ``(5) serve as a member of the Department of Health and
    Human Services Coordinating Committee on Women's Health
    (established under section 229(b)(4)).

    ``(c) Definition.--As used in this section, the term `women's health
    conditions', with respect to women of all age, ethnic, and racial
    groups, means diseases, disorders, and conditions--
    ``(1) unique to, significantly more serious for, or
    significantly more prevalent in women; and
    ``(2) for which the factors of medical risk or type of
    medical intervention are different for women, or for which there
    is reasonable evidence that indicates that such factors or types
    may be different for women.

    ``(d) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated such sums as
    may be necessary for each of the fiscal years 2010 through 2014.''.
    (c) Office of Women's Health Research.--Section 486(a) of the Public
    Health Service Act (42 U.S.C. 287d(a)) is amended by inserting ``and who
    shall report directly to the Director'' before the period at the end
    thereof.
    (d) Substance Abuse and Mental Health Services Administration.--
    Section 501(f) of the Public Health Service Act (42 U.S.C. 290aa(f)) is
    amended--
    (1) in paragraph (1), by inserting ``who shall report
    directly to the Administrator'' before the period;
    (2) by redesignating paragraph (4) as paragraph (5); and
    (3) by inserting after paragraph (3), the following:
    ``(4) Office.--Nothing in this subsection shall be construed
    to preclude the Secretary from establishing within the Substance
    Abuse and Mental Health Administration an Office of Women's
    Health.''.

    (e) Agency for Healthcare Research and Quality Activities Regarding
    Women's Health.--Part <> C of title IX
    of the Public Health Service Act (42 U.S.C. 299c et seq.) is amended--
    (1) by redesignating sections 925 and 926 as sections 926
    and 927, respectively; and
    (2) by inserting after section 924 the following:

    [[Page 535]]

    ``SEC. 925. <> ACTIVITIES REGARDING WOMEN'S
    HEALTH.

    ``(a) Establishment.--There is established within the Office of the
    Director, an Office of Women's Health and Gender-Based Research
    (referred to in this section as the `Office'). The Office shall be
    headed by a director who shall be appointed by the Director of
    Healthcare and Research Quality.
    ``(b) Purpose.--The official designated under subsection (a) shall--
    ``(1) report to the Director on the current Agency level of
    activity regarding women's health, across, where appropriate,
    age, biological, and sociocultural contexts, in all aspects of
    Agency work, including the development of evidence reports and
    clinical practice protocols and the conduct of research into
    patient outcomes, delivery of health care services, quality of
    care, and access to health care;
    ``(2) establish short-range and long-range goals and
    objectives within the Agency for research important to women's
    health and, as relevant and appropriate, coordinate with other
    appropriate offices on activities within the Agency that relate
    to health services and medical effectiveness research, for
    issues of particular concern to women;
    ``(3) identify projects in women's health that should be
    conducted or supported by the Agency;
    ``(4) consult with health professionals, nongovernmental
    organizations, consumer organizations, women's health
    professionals, and other individuals and groups, as appropriate,
    on Agency policy with regard to women; and
    ``(5) serve as a member of the Department of Health and
    Human Services Coordinating Committee on Women's Health
    (established under section 229(b)(4)).''.

    ``(c) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated such sums as
    may be necessary for each of the fiscal years 2010 through 2014.''.
    (f) Health Resources and Services Administration Office of Women's
    Health.--Title VII of the Social Security Act (42 U.S.C. 901 et seq.) is
    amended by adding at the end the following:

    ``SEC. 713. OFFICE <> OF WOMEN'S HEALTH.

    ``(a) Establishment.--The Secretary shall establish within the
    Office of the Administrator of the Health Resources and Services
    Administration, an office to be known as the Office of Women's Health.
    The Office shall be headed by a director who shall be appointed by the
    Administrator.
    ``(b) Purpose.--The Director of the Office shall--
    ``(1) report to the Administrator on the current
    Administration level of activity regarding women's health
    across, where appropriate, age, biological, and sociocultural
    contexts;
    ``(2) establish short-range and long-range goals and
    objectives within the Health Resources and Services
    Administration for women's health and, as relevant and
    appropriate, coordinate with other appropriate offices on
    activities within the Administration that relate to health care
    provider training, health service delivery, research, and
    demonstration projects, for issues of particular concern to
    women;
    ``(3) identify projects in women's health that should be
    conducted or supported by the bureaus of the Administration;

    [[Page 536]]

    ``(4) consult with health professionals, nongovernmental
    organizations, consumer organizations, women's health
    professionals, and other individuals and groups, as appropriate,
    on Administration policy with regard to women; and
    ``(5) serve as a member of the Department of Health and
    Human Services Coordinating Committee on Women's Health
    (established under section 229(b)(4) of the Public Health
    Service Act).

    ``(c) Continued Administration of Existing Programs.--The Director
    of the Office shall assume the authority for the development,
    implementation, administration, and evaluation of any projects carried
    out through the Health Resources and Services Administration relating to
    women's health on the date of enactment of this section.
    ``(d) Definitions.--For purposes of this section:
    ``(1) Administration.--The term `Administration' means the
    Health Resources and Services Administration.
    ``(2) Administrator.--The term `Administrator' means the
    Administrator of the Health Resources and Services
    Administration.
    ``(3) Office.--The term `Office' means the Office of Women's
    Health established under this section in the Administration.

    ``(e) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated such sums as
    may be necessary for each of the fiscal years 2010 through 2014.''.
    (g) Food and Drug Administration Office of Women's Health.--Chapter
    X of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 391 et seq.) is
    amended by adding at the end the following:

    ``SEC. 1011. OFFICE <> OF WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the
    Commissioner, an office to be known as the Office of Women's Health
    (referred to in this section as the `Office'). The Office shall be
    headed by a director who shall be appointed by the Commissioner of Food
    and Drugs.
    ``(b) Purpose.--The Director of the Office shall--
    ``(1) report to the Commissioner of Food and Drugs on
    current Food and Drug Administration (referred to in this
    section as the `Administration') levels of activity regarding
    women's participation in clinical trials and the analysis of
    data by sex in the testing of drugs, medical devices, and
    biological products across, where appropriate, age, biological,
    and sociocultural contexts;
    ``(2) establish short-range and long-range goals and
    objectives within the Administration for issues of particular
    concern to women's health within the jurisdiction of the
    Administration, including, where relevant and appropriate,
    adequate inclusion of women and analysis of data by sex in
    Administration protocols and policies;
    ``(3) provide information to women and health care providers
    on those areas in which differences between men and women exist;
    ``(4) consult with pharmaceutical, biologics, and device
    manufacturers, health professionals with expertise in women's

    [[Page 537]]

    issues, consumer organizations, and women's health professionals
    on Administration policy with regard to women;
    ``(5) make annual estimates of funds needed to monitor
    clinical trials and analysis of data by sex in accordance with
    needs that are identified; and
    ``(6) serve as a member of the Department of Health and
    Human Services Coordinating Committee on Women's Health
    (established under section 229(b)(4) of the Public Health
    Service Act).

    ``(c) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated such sums as
    may be necessary for each of the fiscal years 2010 through 2014.''.
    (h) No New Regulatory <> Authority.--
    Nothing in this section and the amendments made by this section may be
    construed as establishing regulatory authority or modifying any existing
    regulatory authority.

    (i) Limitation on <> Termination.--
    Notwithstanding any other provision of law, a Federal office of women's
    health (including the Office of Research on Women's Health of the
    National Institutes of Health) or Federal appointive position with
    primary responsibility over women's health issues (including the
    Associate Administrator for Women's Services under the Substance Abuse
    and Mental Health Services Administration) that is in existence on the
    date of enactment of this section shall not be terminated, reorganized,
    or have any of it's powers or duties transferred unless such
    termination, reorganization, or transfer is approved by Congress through
    the adoption of a concurrent resolution of approval.

    (j) Rule of <> Construction.--Nothing in
    this section (or the amendments made by this section) shall be construed
    to limit the authority of the Secretary of Health and Human Services
    with respect to women's health, or with respect to activities carried
    out through the Department of Health and Human Services on the date of
    enactment of this section.

    SEC. 3510. PATIENT NAVIGATOR PROGRAM.

    Section 340A of the Public Health Service Act (42 U.S.C. 256a) is
    amended--
    (1) by striking subsection (d)(3) and inserting the
    following:
    ``(3) Limitations on grant period.--In carrying out this
    section, the Secretary shall ensure that the total period of a
    grant does not exceed 4 years.'';
    (2) in subsection (e), by adding at the end the following:
    ``(3) Minimum core proficiencies.--The Secretary shall not
    award a grant to an entity under this section unless such entity
    provides assurances that patient navigators recruited, assigned,
    trained, or employed using grant funds meet minimum core
    proficiencies, as defined by the entity that submits the
    application, that are tailored for the main focus or
    intervention of the navigator involved.''; and
    (3) in subsection (m)--
    (A) in paragraph (1), by striking ``and $3,500,000
    for fiscal year 2010.'' and inserting ``$3,500,000 for
    fiscal year 2010, and such sums as may be necessary for
    each of fiscal years 2011 through 2015.''; and
    (B) in paragraph (2), by striking ``2010'' and
    inserting ``2015''.

    [[Page 538]]

    SEC. 3511. AUTHORIZATION OF APPROPRIATIONS.

    Except where otherwise provided in this subtitle (or an amendment
    made by this subtitle), there is authorized to be appropriated such sums
    as may be necessary to carry out this subtitle (and such amendments made
    by this subtitle).

    Subtitle G--Protecting and Improving Guaranteed Medicare Benefits

    SEC. 3601. PROTECTING <> AND IMPROVING
    GUARANTEED MEDICARE BENEFITS.

    (a) Protecting Guaranteed Medicare Benefits.--Nothing in the
    provisions of, or amendments made by, this Act shall result in a
    reduction of guaranteed benefits under title XVIII of the Social
    Security Act.
    (b) Ensuring That Medicare Savings Benefit the Medicare Program and
    Medicare Beneficiaries.--Savings generated for the Medicare program
    under title XVIII of the Social Security Act under the provisions of,
    and amendments made by, this Act shall extend the solvency of the
    Medicare trust funds, reduce Medicare premiums and other cost-sharing
    for beneficiaries, and improve or expand guaranteed Medicare benefits
    and protect access to Medicare providers.

    SEC. 3602. NO <> CUTS IN GUARANTEED
    BENEFITS.

    Nothing in this Act shall result in the reduction or elimination of
    any benefits guaranteed by law to participants in Medicare Advantage
    plans.

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

    Subtitle A--Modernizing Disease Prevention and Public Health Systems

    SEC. 4001. NATIONAL <> PREVENTION, HEALTH
    PROMOTION AND PUBLIC HEALTH COUNCIL.

    (a) Establishment.--The President <> shall
    establish, within the Department of Health and Human Services, a council
    to be known as the ``National Prevention, Health Promotion and Public
    Health Council'' (referred to in this section as the ``Council'').

    (b) Chairperson.--The
    President <> shall appoint the Surgeon
    General to serve as the chairperson of the Council.

    (c) Composition.--The Council shall be composed of--
    (1) the Secretary of Health and Human Services;
    (2) the Secretary of Agriculture;
    (3) the Secretary of Education;
    (4) the Chairman of the Federal Trade Commission;
    (5) the Secretary of Transportation;
    (6) the Secretary of Labor;
    (7) the Secretary of Homeland Security;

    [[Page 539]]

    (8) the Administrator of the Environmental Protection
    Agency;
    (9) the Director of the Office of National Drug Control
    Policy;
    (10) the Director of the Domestic Policy Council;
    (11) the Assistant Secretary for Indian Affairs;
    (12) the Chairman of the Corporation for National and
    Community Service; and
    (13) the head of any other Federal agency that the
    chairperson determines is appropriate.

    (d) Purposes and Duties.--The Council shall--
    (1) provide coordination and leadership at the Federal
    level, and among all Federal departments and agencies, with
    respect to prevention, wellness and health promotion practices,
    the public health system, and integrative health care in the
    United States;
    (2) after obtaining input from relevant stakeholders,
    develop a national prevention, health promotion, public health,
    and integrative health care strategy that incorporates the most
    effective and achievable means of improving the health status of
    Americans and reducing the incidence of preventable illness and
    disability in the United States;
    (3) provide recommendations to the President and Congress
    concerning the most pressing health issues confronting the
    United States and changes in Federal policy to achieve national
    wellness, health promotion, and public health goals, including
    the reduction of tobacco use, sedentary behavior, and poor
    nutrition;
    (4) consider and propose evidence-based models, policies,
    and innovative approaches for the promotion of transformative
    models of prevention, integrative health, and public health on
    individual and community levels across the United States;
    (5) establish processes for continual public input,
    including input from State, regional, and local leadership
    communities and other relevant stakeholders, including Indian
    tribes and tribal organizations;
    (6) submit the reports required under subsection (g); and
    (7) carry out other activities determined appropriate by the
    President.

    (e) Meetings.--The Council shall meet at the call of the
    Chairperson.
    (f) Advisory <> Group.--
    (1) In general.--The <> President
    shall establish an Advisory Group to the Council to be known as
    the ``Advisory Group on Prevention, Health Promotion, and
    Integrative and Public Health'' (hereafter referred to in this
    section as the ``Advisory Group''). The Advisory Group shall be
    within the Department of Health and Human Services and report to
    the Surgeon General.
    (2) Composition.--
    (A) In general.--The Advisory Group shall be
    composed of not more than 25 non-Federal members to be
    appointed by the President.
    (B) Representation.--In appointing members under
    subparagraph (A), the President shall ensure that the
    Advisory Group includes a diverse group of licensed
    health

    [[Page 540]]

    professionals, including integrative health
    practitioners who have expertise in--
    (i) worksite health promotion;
    (ii) community services, including community
    health centers;
    (iii) preventive medicine;
    (iv) health coaching;
    (v) public health education;
    (vi) geriatrics; and
    (vii) rehabilitation medicine.
    (3) Purposes and duties.--The Advisory Group shall develop
    policy and program recommendations and advise the Council on
    lifestyle-based chronic disease prevention and management,
    integrative health care practices, and health promotion.

    (g) National Prevention and Health Promotion Strategy.--
    Not <> later than 1 year after the
    date of enactment of this Act, the Chairperson, in consultation with the
    Council, shall develop and make public a national prevention, health
    promotion and public health strategy, and shall review and revise such
    strategy periodically. Such strategy shall--
    (1) set specific goals and objectives for improving the
    health of the United States through federally-supported
    prevention, health promotion, and public health programs,
    consistent with ongoing goal setting efforts conducted by
    specific agencies;
    (2) establish specific and measurable actions and timelines
    to carry out the strategy, and determine accountability for
    meeting those timelines, within and across Federal departments
    and agencies; and
    (3) make recommendations to improve Federal efforts relating
    to prevention, health promotion, public health, and integrative
    health care practices to ensure Federal efforts are consistent
    with available standards and evidence.

    (h) Report.--Not later than July 1, 2010, and annually thereafter
    through January 1, 2015, the Council shall submit to the President and
    the relevant committees of Congress, a report that--
    (1) describes the activities and efforts on prevention,
    health promotion, and public health and activities to develop a
    national strategy conducted by the Council during the period for
    which the report is prepared;
    (2) describes the national progress in meeting specific
    prevention, health promotion, and public health goals defined in
    the strategy and further describes corrective actions
    recommended by the Council and taken by relevant agencies and
    organizations to meet these goals;
    (3) contains a list of national priorities on health
    promotion and disease prevention to address lifestyle behavior
    modification (smoking cessation, proper nutrition, appropriate
    exercise, mental health, behavioral health, substance use
    disorder, and domestic violence screenings) and the prevention
    measures for the 5 leading disease killers in the United States;
    (4) contains specific science-based initiatives to achieve
    the measurable goals of Healthy People 2010 regarding nutrition,
    exercise, and smoking cessation, and targeting the 5 leading
    disease killers in the United States;
    (5) contains specific plans for consolidating Federal health
    programs and Centers that exist to promote healthy behavior

    [[Page 541]]

    and reduce disease risk (including eliminating programs and
    offices determined to be ineffective in meeting the priority
    goals of Healthy People 2010);
    (6) contains specific plans to ensure that all Federal
    health care programs are fully coordinated with science-based
    prevention recommendations by the Director of the Centers for
    Disease Control and Prevention; and
    (7) contains specific plans to ensure that all non-
    Department of Health and Human Services prevention programs are
    based on the science-based guidelines developed by the Centers
    for Disease Control and Prevention under paragraph (4).

    (i) Periodic Reviews.--The
    Secretary <> and the Comptroller General
    of the United States shall jointly conduct periodic reviews, not less
    than every 5 years, and evaluations of every Federal disease prevention
    and health promotion initiative, program, and agency. Such <> reviews shall be evaluated based on effectiveness in meeting
    metrics-based goals with an analysis posted on such agencies' public
    Internet websites.

    SEC. 4002. PREVENTION <> AND PUBLIC HEALTH FUND.

    (a) Purpose.--It is the purpose of this section to establish a
    Prevention and Public Health Fund (referred to in this section as the
    ``Fund''), to be administered through the Department of Health and Human
    Services, Office of the Secretary, to provide for expanded and sustained
    national investment in prevention and public health programs to improve
    health and help restrain the rate of growth in private and public sector
    health care costs.
    (b) Funding.--There are hereby authorized to be appropriated, and
    appropriated, to the Fund, out of any monies in the Treasury not
    otherwise appropriated--
    (1) for fiscal year 2010, $500,000,000;
    (2) for fiscal year 2011, $750,000,000;
    (3) for fiscal year 2012, $1,000,000,000;
    (4) for fiscal year 2013, $1,250,000,000;
    (5) for fiscal year 2014, $1,500,000,000; and
    (6) for fiscal year 2015, and each fiscal year thereafter,
    $2,000,000,000.

    (c) Use of Fund.--The Secretary shall transfer amounts in the Fund
    to accounts within the Department of Health and Human Services to
    increase funding, over the fiscal year 2008 level, for programs
    authorized by the Public Health Service Act, for prevention, wellness,
    and public health activities including prevention research and health
    screenings, such as the Community Transformation grant program, the
    Education and Outreach Campaign for Preventive Benefits, and
    immunization programs.
    (d) Transfer Authority.--The Committee on Appropriations of the
    Senate and the Committee on Appropriations of the House of
    Representatives may provide for the transfer of funds in the Fund to
    eligible activities under this section, subject to subsection (c).

    SEC. 4003. CLINICAL AND COMMUNITY PREVENTIVE SERVICES.

    (a) Preventive Services Task Force.--Section 915 of the Public
    Health Service Act (42 U.S.C. 299b-4) is amended by striking subsection
    (a) and inserting the following:
    ``(a) Preventive Services Task Force.--
    ``(1) Establishment and purpose.--The Director shall convene
    an independent Preventive Services Task Force (referred

    [[Page 542]]

    to in this subsection as the `Task Force') to be composed of
    individuals with appropriate expertise. Such Task Force shall
    review the scientific evidence related to the effectiveness,
    appropriateness, and cost-effectiveness of clinical preventive
    services for the purpose of developing recommendations for the
    health care community, and updating previous clinical preventive
    recommendations, to be published in the Guide to Clinical
    Preventive Services (referred to in this section as the
    `Guide'), for individuals and organizations delivering clinical
    services, including primary care professionals, health care
    systems, professional societies, employers, community
    organizations, non-profit organizations, Congress and other
    policy-makers, governmental public health agencies, health care
    quality organizations, and organizations developing national
    health objectives. Such recommendations shall consider clinical
    preventive best practice recommendations from the Agency for
    Healthcare Research and Quality, the National Institutes of
    Health, the Centers for Disease Control and Prevention, the
    Institute of Medicine, specialty medical associations, patient
    groups, and scientific societies.
    ``(2) Duties.--The duties of the Task Force shall include--
    ``(A) the development of additional topic areas for
    new recommendations and interventions related to those
    topic areas, including those related to specific sub-
    populations and age groups;
    ``(B) at least once during every 5-year period,
    review interventions and update recommendations related
    to existing topic areas, including new or improved
    techniques to assess the health effects of
    interventions;
    ``(C) improved integration with Federal Government
    health objectives and related target setting for health
    improvement;
    ``(D) the enhanced dissemination of recommendations;
    ``(E) the provision of technical assistance to those
    health care professionals, agencies and organizations
    that request help in implementing the Guide
    recommendations; and
    ``(F) the submission of yearly reports to Congress
    and related agencies identifying gaps in research, such
    as preventive services that receive an insufficient
    evidence statement, and recommending priority areas that
    deserve further examination, including areas related to
    populations and age groups not adequately addressed by
    current recommendations.
    ``(3) Role of agency.--The Agency shall provide ongoing
    administrative, research, and technical support for the
    operations of the Task Force, including coordinating and
    supporting the dissemination of the recommendations of the Task
    Force, ensuring adequate staff resources, and assistance to
    those organizations requesting it for implementation of the
    Guide's recommendations.
    ``(4) Coordination with community preventive services task
    force.--The Task Force shall take appropriate steps to
    coordinate its work with the Community Preventive Services Task
    Force and the Advisory Committee on Immunization Practices,
    including the examination of how each task force's
    recommendations interact at the nexus of clinic and community.

    [[Page 543]]

    ``(5) Operation.--Operation. In carrying out the duties
    under paragraph (2), the Task Force is not subject to the
    provisions of Appendix 2 of title 5, United States Code.
    ``(6) Independence.--All members of the Task Force convened
    under this subsection, and any recommendations made by such
    members, shall be independent and, to the extent practicable,
    not subject to political pressure.
    ``(7) Authorization of appropriations.--There are authorized
    to be appropriated such sums as may be necessary for each fiscal
    year to carry out the activities of the Task Force.''.

    (b) Community Preventive Services Task Force.--
    (1) In general.--Part P of title III of the Public Health
    Service Act, as amended by paragraph (2), is amended by adding
    at the end the following:

    ``SEC. 399U. COMMUNITY <> PREVENTIVE SERVICES
    TASK FORCE.

    ``(a) Establishment and Purpose.--The Director of the Centers for
    Disease Control and Prevention shall convene an independent Community
    Preventive Services Task Force (referred to in this subsection as the
    `Task Force') to be composed of individuals with appropriate expertise.
    Such <> Task Force shall
    review the scientific evidence related to the effectiveness,
    appropriateness, and cost-effectiveness of community preventive
    interventions for the purpose of developing recommendations, to be
    published in the Guide to Community Preventive Services (referred to in
    this section as the `Guide'), for individuals and organizations
    delivering population-based services, including primary care
    professionals, health care systems, professional societies, employers,
    community organizations, non-profit organizations, schools, governmental
    public health agencies, Indian tribes, tribal organizations and urban
    Indian organizations, medical groups, Congress and other policy-makers.
    Community preventive services include any policies, programs, processes
    or activities designed to affect or otherwise affecting health at the
    population level.

    ``(b) Duties.--The duties of the Task Force shall include--
    ``(1) the development of additional topic areas for new
    recommendations and interventions related to those topic areas,
    including those related to specific populations and age groups,
    as well as the social, economic and physical environments that
    can have broad effects on the health and disease of populations
    and health disparities among sub-populations and age groups;
    ``(2) at least once during every 5-year period, review
    interventions and update recommendations related to existing
    topic areas, including new or improved techniques to assess the
    health effects of interventions, including health impact
    assessment and population health modeling;
    ``(3) improved integration with Federal Government health
    objectives and related target setting for health improvement;
    ``(4) the enhanced dissemination of recommendations;
    ``(5) the provision of technical assistance to those health
    care professionals, agencies, and organizations that request
    help in implementing the Guide recommendations; and
    ``(6) providing yearly reports to Congress and related
    agencies identifying gaps in research and recommending priority
    areas that deserve further examination, including areas related

    [[Page 544]]

    to populations and age groups not adequately addressed by
    current recommendations.

    ``(c) Role of Agency.--The Director shall provide ongoing
    administrative, research, and technical support for the operations of
    the Task Force, including coordinating and supporting the dissemination
    of the recommendations of the Task Force, ensuring adequate staff
    resources, and assistance to those organizations requesting it for
    implementation of Guide recommendations.
    ``(d) Coordination With Preventive Services Task Force.--The Task
    Force shall take appropriate steps to coordinate its work with the U.S.
    Preventive Services Task Force and the Advisory Committee on
    Immunization Practices, including the examination of how each task
    force's recommendations interact at the nexus of clinic and community.
    ``(e) Operation.--In carrying out the duties under subsection (b),
    the Task Force shall not be subject to the provisions of Appendix 2 of
    title 5, United States Code.
    ``(f) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary for each fiscal year to carry
    out the activities of the Task Force.''.
    (2) Technical amendments.--
    (A) Section 399R of the Public Health Service Act
    (as added by section 2 of the ALS Registry Act (Public
    Law 110-373; 122 Stat. 4047)) <> is redesignated as section 399S.
    (B) Section 399R of such Act (as added by section 3
    of the Prenatally and Postnatally Diagnosed Conditions
    Awareness <> Act (Public Law 110-
    374; 122 Stat. 4051)) is redesignated as section 399T.

    SEC. 4004. EDUCATION <> AND OUTREACH CAMPAIGN
    REGARDING PREVENTIVE BENEFITS.

    (a) In General.--The Secretary of Health and Human Services
    (referred to in this section as the ``Secretary'') shall provide for the
    planning and implementation of a national public-private partnership for
    a prevention and health promotion outreach and education campaign to
    raise public awareness of health improvement across the life span. Such
    campaign shall include the dissemination of information that--
    (1) describes the importance of utilizing preventive
    services to promote wellness, reduce health disparities, and
    mitigate chronic disease;
    (2) promotes the use of preventive services recommended by
    the United States Preventive Services Task Force and the
    Community Preventive Services Task Force;
    (3) encourages healthy behaviors linked to the prevention of
    chronic diseases;
    (4) explains the preventive services covered under health
    plans offered through a Gateway;
    (5) describes additional preventive care supported by the
    Centers for Disease Control and Prevention, the Health Resources
    and Services Administration, the Substance Abuse and Mental
    Health Services Administration, the Advisory Committee on
    Immunization Practices, and other appropriate agencies; and
    (6) includes general health promotion information.

    [[Page 545]]

    (b) Consultation.--In coordinating the campaign under subsection
    (a), the Secretary shall consult with the Institute of Medicine to
    provide ongoing advice on evidence-based scientific information for
    policy, program development, and evaluation.
    (c) Media Campaign.--
    (1) In general.--Not <> later than 1 year
    after the date of enactment of this Act, the Secretary, acting
    through the Director of the Centers for Disease Control and
    Prevention, shall establish and implement a national science-
    based media campaign on health promotion and disease prevention.
    (2) Requirement of campaign.--The campaign implemented under
    paragraph (1)--
    (A) shall be designed to address proper nutrition,
    regular exercise, smoking cessation, obesity reduction,
    the 5 leading disease killers in the United States, and
    secondary prevention through disease screening
    promotion;
    (B) shall be carried out through competitively bid
    contracts awarded to entities providing for the
    professional production and design of such campaign;
    (C) may include the use of television, radio,
    Internet, and other commercial marketing venues and may
    be targeted to specific age groups based on peer-
    reviewed social research;
    (D) shall not be duplicative of any other Federal
    efforts relating to health promotion and disease
    prevention; and
    (E) may include the use of humor and nationally
    recognized positive role models.
    (3) Evaluation.--The <> Secretary
    shall ensure that the campaign implemented under paragraph (1)
    is subject to an independent evaluation every 2 years and shall
    report every 2 years to Congress on the effectiveness of such
    campaigns towards meeting science-based metrics.

    (d) Website.--The Secretary, in consultation with private-sector
    experts, shall maintain or enter into a contract to maintain an Internet
    website to provide science-based information on guidelines for
    nutrition, regular exercise, obesity reduction, smoking cessation, and
    specific chronic disease prevention. Such website shall be designed to
    provide information to health care providers and consumers.
    (e) Dissemination of <> Information Through
    Providers.--The Secretary, acting through the Centers for Disease
    Control and Prevention, shall develop and implement a plan for the
    dissemination of health promotion and disease prevention information
    consistent with national priorities, to health care providers who
    participate in Federal programs, including programs administered by the
    Indian Health Service, the Department of Veterans Affairs, the
    Department of Defense, and the Health Resources and Services
    Administration, and Medicare and Medicaid.

    (f) Personalized Prevention Plans.--
    (1) Contract.--The Secretary, <> acting
    through the Director of the Centers for Disease Control and
    Prevention, shall enter into a contract with a qualified entity
    for the development and operation of a Federal Internet website
    personalized prevention plan tool.
    (2) Use.--The website developed under paragraph (1) shall be
    designed to be used as a source of the most up-to-date
    scientific evidence relating to disease prevention for use by

    [[Page 546]]

    individuals. Such website shall contain a component that enables
    an individual to determine their disease risk (based on personal
    health and family history, BMI, and other relevant information)
    relating to the 5 leading diseases in the United States, and
    obtain personalized suggestions for preventing such diseases.

    (g) Internet Portal.--The Secretary shall establish an Internet
    portal for accessing risk-assessment tools developed and maintained by
    private and academic entities.
    (h) Priority Funding.--Funding for the activities authorized under
    this section shall take priority over funding provided through the
    Centers for Disease Control and Prevention for grants to States and
    other entities for similar purposes and goals as provided for in this
    section. Not to exceed $500,000,000 shall be expended on the campaigns
    and activities required under this section.
    (i) Public Awareness of Preventive and Obesity-related Services.--
    (1) Information to states.--The Secretary of Health and
    Human Services shall provide guidance and relevant information
    to States and health care providers regarding preventive and
    obesity-related services that are available to Medicaid
    enrollees, including obesity screening and counseling for
    children and adults.
    (2) Information to enrollees.--Each State shall design a
    public awareness campaign to educate Medicaid enrollees
    regarding availability and coverage of such services, with the
    goal of reducing incidences of obesity.
    (3) Report.--Not later than January 1, 2011, and every 3
    years thereafter through January 1, 2017, the Secretary of
    Health and Human Services shall report to Congress on the status
    and effectiveness of efforts under paragraphs (1) and (2),
    including summaries of the States' efforts to increase awareness
    of coverage of obesity-related services.

    (j) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out this section.

    Subtitle B--Increasing Access to Clinical Preventive Services

    SEC. 4101. SCHOOL-BASED HEALTH CENTERS.

    (a) Grants <> for the Establishment of School-
    based Health Centers.--
    (1) Program.--The Secretary of Health and Human Services (in
    this subsection referred to as the ``Secretary'') shall
    establish a program to award grants to eligible entities to
    support the operation of school-based health centers.
    (2) Eligibility.--To be eligible for a grant under this
    subsection, an entity shall--
    (A) be a school-based health center or a sponsoring
    facility of a school-based health center; and
    (B) submit an application at such time, in such
    manner, and containing such information as the Secretary
    may require, including at a minimum an assurance that
    funds awarded under the grant shall not be used to
    provide

    [[Page 547]]

    any service that is not authorized or allowed by
    Federal, State, or local law.
    (3) Preference.--In awarding grants under this section, the
    Secretary shall give preference to awarding grants for school-
    based health centers that serve a large population of children
    eligible for medical assistance under the State Medicaid plan
    under title XIX of the Social Security Act or under a waiver of
    such plan or children eligible for child health assistance under
    the State child health plan under title XXI of that Act (42
    U.S.C. 1397aa et seq.).
    (4) Limitation on use of funds.--An eligible entity shall
    use funds provided under a grant awarded under this subsection
    only for expenditures for facilities (including the acquisition
    or improvement of land, or the acquisition, construction,
    expansion, replacement, or other improvement of any building or
    other facility), equipment, or similar expenditures, as
    specified by the Secretary. No funds provided under a grant
    awarded under this section shall be used for expenditures for
    personnel or to provide health services.
    (5) Appropriations.--Out of any funds in the Treasury not
    otherwise appropriated, there is appropriated for each of fiscal
    years 2010 through 2013, $50,000,000 for the purpose of carrying
    out this subsection. Funds appropriated under this paragraph
    shall remain available until expended.
    (6) Definitions.--In this subsection, the terms ``school-
    based health center'' and ``sponsoring facility'' have the
    meanings given those terms in section 2110(c)(9) of the Social
    Security Act (42 U.S.C. 1397jj(c)(9)).

    (b) Grants for the Operation of School-based Health Centers.--Part Q
    of title III of the Public Health Service Act (42 U.S.C. 280h et seq.)
    is amended by adding at the end the following:

    ``SEC. 399Z-1. <> SCHOOL-BASED HEALTH CENTERS.

    ``(a) Definitions; Establishment of Criteria.--In this section:
    ``(1) Comprehensive primary health services.--The term
    `comprehensive primary health services' means the core services
    offered by school-based health centers, which shall include the
    following:
    ``(A) Physical.--Comprehensive health assessments,
    diagnosis, and treatment of minor, acute, and chronic
    medical conditions, and referrals to, and follow-up for,
    specialty care and oral health services.
    ``(B) Mental health.--Mental health and substance
    use disorder assessments, crisis intervention,
    counseling, treatment, and referral to a continuum of
    services including emergency psychiatric care, community
    support programs, inpatient care, and outpatient
    programs.
    ``(2) Medically underserved children and adolescents.--
    ``(A) In general.--The term `medically underserved
    children and adolescents' means a population of children
    and adolescents who are residents of an area designated
    as a medically underserved area or a health professional
    shortage area by the Secretary.
    ``(B) Criteria.--The Secretary shall prescribe
    criteria for determining the specific shortages of
    personal health

    [[Page 548]]

    services for medically underserved children and
    adolescents under subparagraph (A) that shall--
    ``(i) take into account any comments received
    by the Secretary from the chief executive officer
    of a State and local officials in a State; and
    ``(ii) include factors indicative of the
    health status of such children and adolescents of
    an area, including the ability of the residents of
    such area to pay for health services, the
    accessibility of such services, the availability
    of health professionals to such children and
    adolescents, and other factors as determined
    appropriate by the Secretary.
    ``(3) School-based health center.--The term `school-based
    health center' means a health clinic that--
    ``(A) meets the definition of a school-based health
    center under section 2110(c)(9)(A) of the Social
    Security Act and is administered by a sponsoring
    facility (as defined in section 2110(c)(9)(B) of the
    Social Security Act);
    ``(B) provides, at a minimum, comprehensive primary
    health services during school hours to children and
    adolescents by health professionals in accordance with
    established standards, community practice, reporting
    laws, and other State laws, including parental consent
    and notification laws that are not inconsistent with
    Federal law; and
    ``(C) does not perform abortion services.

    ``(b) Authority To Award Grants.--The Secretary shall award grants
    for the costs of the operation of school-based health centers (referred
    to in this section as `SBHCs') that meet the requirements of this
    section.
    ``(c) Applications.--To be eligible to receive a grant under this
    section, an entity shall--
    ``(1) be an SBHC (as defined in subsection (a)(3)); and
    ``(2) submit to the Secretary an application at such time,
    in such manner, and containing--
    ``(A) evidence that the applicant meets all criteria
    necessary to be designated an SBHC;
    ``(B) evidence of local need for the services to be
    provided by the SBHC;
    ``(C) an assurance that--
    ``(i) SBHC services will be provided to those
    children and adolescents for whom parental or
    guardian consent has been obtained in cooperation
    with Federal, State, and local laws governing
    health care service provision to children and
    adolescents;
    ``(ii) the SBHC has made and will continue to
    make every reasonable effort to establish and
    maintain collaborative relationships with other
    health care providers in the catchment area of the
    SBHC;
    ``(iii) the SBHC will provide on-site access
    during the academic day when school is in session
    and 24-hour coverage through an on-call system and
    through its backup health providers to ensure
    access to services on a year-round basis when the
    school or the SBHC is closed;
    ``(iv) the SBHC will be integrated into the
    school environment and will coordinate health
    services with school personnel, such as
    administrators, teachers,

    [[Page 549]]

    nurses, counselors, and support personnel, as well
    as with other community providers co-located at
    the school;
    ``(v) the SBHC sponsoring facility assumes all
    responsibility for the SBHC administration,
    operations, and oversight; and
    ``(vi) the SBHC will comply with Federal,
    State, and local laws concerning patient privacy
    and student records, including regulations
    promulgated under the Health Insurance Portability
    and Accountability Act of 1996 and section 444 of
    the General Education Provisions Act; and
    ``(D) such other information as the Secretary may
    require.

    ``(d) Preferences and Consideration.--In reviewing applications:
    ``(1) The Secretary may give preference to applicants who
    demonstrate an ability to serve the following:
    ``(A) Communities that have evidenced barriers to
    primary health care and mental health and substance use
    disorder prevention services for children and
    adolescents.
    ``(B) Communities with high per capita numbers of
    children and adolescents who are uninsured,
    underinsured, or enrolled in public health insurance
    programs.
    ``(C) Populations of children and adolescents that
    have historically demonstrated difficulty in accessing
    health and mental health and substance use disorder
    prevention services.
    ``(2) The Secretary may give consideration to whether an
    applicant has received a grant under subsection (a) of section
    4101 of the Patient Protection and Affordable Care Act.

    ``(e) Waiver of Requirements.--The Secretary may--
    ``(1) under appropriate circumstances, waive the application
    of all or part of the requirements of this subsection with
    respect to an SBHC for not to exceed 2 years; and
    ``(2) upon a showing of good cause, waive the requirement
    that the SBHC provide all required comprehensive primary health
    services for a designated period of time to be determined by the
    Secretary.

    ``(f) Use of Funds.--
    ``(1) Funds.--Funds awarded under a grant under this
    section--
    ``(A) may be used for--
    ``(i) acquiring and leasing equipment
    (including the costs of amortizing the principle
    of, and paying interest on, loans for such
    equipment);
    ``(ii) providing training related to the
    provision of required comprehensive primary health
    services and additional health services;
    ``(iii) the management and operation of health
    center programs;
    ``(iv) the payment of salaries for physicians,
    nurses, and other personnel of the SBHC; and
    ``(B) may not be used to provide abortions.
    ``(2) Construction.--The Secretary may award grants which
    may be used to pay the costs associated with expanding and
    modernizing existing buildings for use as an SBHC,

    [[Page 550]]

    including the purchase of trailers or manufactured buildings to
    install on the school property.
    ``(3) Limitations.--
    ``(A) In general.--Any provider of services that is
    determined by a State to be in violation of a State law
    described in subsection (a)(3)(B) with respect to
    activities carried out at a SBHC shall not be eligible
    to receive additional funding under this section.
    ``(B) No overlapping grant period.--No entity that
    has received funding under section 330 for a grant
    period shall be eligible for a grant under this section
    for with respect to the same grant period.

    ``(g) Matching Requirement.--
    ``(1) In general.--Each eligible entity that receives a
    grant under this section shall provide, from non-Federal
    sources, an amount equal to 20 percent of the amount of the
    grant (which may be provided in cash or in-kind) to carry out
    the activities supported by the grant.
    ``(2) Waiver.--The Secretary may waive all or part of the
    matching requirement described in paragraph (1) for any fiscal
    year for the SBHC if the Secretary determines that applying the
    matching requirement to the SBHC would result in serious
    hardship or an inability to carry out the purposes of this
    section.

    ``(h) Supplement, Not Supplant.--Grant funds provided under this
    section shall be used to supplement, not supplant, other Federal or
    State funds.
    ``(i) Evaluation.--The Secretary shall develop and implement a plan
    for evaluating SBHCs and monitoring quality performance under the awards
    made under this section.
    ``(j) Age Appropriate Services.--An eligible entity receiving funds
    under this section shall only provide age appropriate services through a
    SBHC funded under this section to an individual.
    ``(k) Parental Consent.--An eligible entity receiving funds under
    this section shall not provide services through a SBHC funded under this
    section to an individual without the consent of the parent or guardian
    of such individual if such individual is considered a minor under
    applicable State law.
    ``(l) Authorization of Appropriations.--For purposes of carrying out
    this section, there are authorized to be appropriated such sums as may
    be necessary for each of the fiscal years 2010 through 2014.''.

    SEC. 4102. ORAL HEALTHCARE PREVENTION ACTIVITIES.

    (a) In General.--Title III of the Public Health Service Act (42
    U.S.C. 241 et seq.), as amended by section 3025, is amended by adding at
    the end the following:

    ``PART T--ORAL HEALTHCARE PREVENTION ACTIVITIES

    ``SEC. 399LL. ORAL <> HEALTHCARE PREVENTION
    EDUCATION CAMPAIGN.

    ``(a) Establishment.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention and in consultation with
    professional oral health organizations, shall, subject to the
    availability of appropriations, establish a 5-year national, public
    education campaign (referred to in this section

    [[Page 551]]

    as the `campaign') that is focused on oral healthcare prevention and
    education, including prevention of oral disease such as early childhood
    and other caries, periodontal disease, and oral cancer.
    ``(b) Requirements.--In establishing the campaign, the Secretary
    shall--
    ``(1) ensure that activities are targeted towards specific
    populations such as children, pregnant women, parents, the
    elderly, individuals with disabilities, and ethnic and racial
    minority populations, including Indians, Alaska Natives and
    Native Hawaiians (as defined in section 4(c) of the Indian
    Health Care Improvement Act) in a culturally and linguistically
    appropriate manner; and
    ``(2) utilize science-based strategies to convey oral health
    prevention messages that include, but are not limited to,
    community water fluoridation and dental sealants.

    ``(c) Planning and Implementation.--Not
    later <> than 2 years after the date of enactment of
    this section, the Secretary shall begin implementing the 5-year
    campaign. During the 2-year period referred to in the previous sentence,
    the Secretary shall conduct planning activities with respect to the
    campaign.

    ``SEC. 399LL-1. RESEARCH-BASED <> DENTAL
    CARIES DISEASE MANAGEMENT.

    ``(a) In General.--The Secretary, acting through the Director of the
    Centers for Disease Control and Prevention, shall award demonstration
    grants to eligible entities to demonstrate the effectiveness of
    research-based dental caries disease management activities.
    ``(b) Eligibility.--To be eligible for a grant under this section,
    an entity shall--
    ``(1) be a community-based provider of dental services (as
    defined by the Secretary), including a Federally-qualified
    health center, a clinic of a hospital owned or operated by a
    State (or by an instrumentality or a unit of government within a
    State), a State or local department of health, a dental program
    of the Indian Health Service, an Indian tribe or tribal
    organization, or an urban Indian organization (as such terms are
    defined in section 4 of the Indian Health Care Improvement Act),
    a health system provider, a private provider of dental services,
    medical, dental, public health, nursing, nutrition educational
    institutions, or national organizations involved in improving
    children's oral health; and
    ``(2) submit <> to the Secretary an
    application at such time, in such manner, and containing such
    information as the Secretary may require.

    ``(c) Use of Funds.--A grantee shall use amounts received under a
    grant under this section to demonstrate the effectiveness of research-
    based dental caries disease management activities.
    ``(d) Use of Information.--The Secretary shall utilize information
    generated from grantees under this section in planning and implementing
    the public education campaign under section 399LL.

    ``SEC. 399LL-2. AUTHORIZATION <> OF
    APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part,
    such sums as may be necessary.''.
    (b) School-based Sealant Programs.--Section 317M(c)(1) of the Public
    Health Service Act (42 U.S.C. 247b-14(c)(1)) is amended by striking
    ``may award grants to States and Indian tribes'' and

    [[Page 552]]

    inserting ``shall award a grant to each of the 50 States and territories
    and to Indians, Indian tribes, tribal organizations and urban Indian
    organizations (as such terms are defined in section 4 of the Indian
    Health Care Improvement Act)''.
    (c) Oral Health Infrastructure.--Section 317M of the Public Health
    Service Act (42 U.S.C. 247b-14) is amended--
    (1) by redesignating subsections (d) and (e) as subsections
    (e) and (f), respectively; and
    (2) by inserting after subsection (c), the following:

    ``(d) Oral Health Infrastructure.--
    ``(1) Cooperative agreements.--The Secretary, acting through
    the Director of the Centers for Disease Control and Prevention,
    shall enter into cooperative agreements with State, territorial,
    and Indian tribes or tribal organizations (as those terms are
    defined in section 4 of the Indian Health Care Improvement Act)
    to establish oral health leadership and program guidance, oral
    health data collection and interpretation, (including
    determinants of poor oral health among vulnerable populations),
    a multi-dimensional delivery system for oral health, and to
    implement science-based programs (including dental sealants and
    community water fluoridation) to improve oral health.
    ``(2) Authorization of appropriations.--There is authorized
    to be appropriated such sums as necessary to carry out this
    subsection for fiscal years 2010 through 2014.''.

    (d) Updating <> National Oral Healthcare
    Surveillance Activities.--
    (1) PRAMS.--
    (A) In general.--The Secretary of Health and Human
    Services (referred to in this subsection as the
    ``Secretary'') shall carry out activities to update and
    improve the Pregnancy Risk Assessment Monitoring System
    (referred to in this section as ``PRAMS'') as it relates
    to oral healthcare.
    (B) State reports and mandatory measurements.--
    (i) In general.--Not later than 5 years after
    the date of enactment of this Act, and every 5
    years thereafter, a State shall submit to the
    Secretary a report concerning activities conducted
    within the State under PRAMS.
    (ii) Measurements.--The oral healthcare
    measurements developed by the Secretary for use
    under PRAMS shall be mandatory with respect to
    States for purposes of the State reports under
    clause (i).
    (C) Funding.--There is authorized to be appropriated
    to carry out this paragraph, such sums as may be
    necessary.
    (2) National health and nutrition examination survey.--The
    Secretary shall develop oral healthcare components that shall
    include tooth-level surveillance for inclusion in the National
    Health and Nutrition Examination Survey.
    Such <> components shall be updated by the
    Secretary at least every 6 years.
    For <> purposes of this paragraph, the term
    ``tooth-level surveillance'' means a clinical examination where
    an examiner looks at each dental surface, on each tooth in the
    mouth and as expanded by the Division of Oral Health of the
    Centers for Disease Control and Prevention.

    [[Page 553]]

    (3) Medical expenditures panel survey.--The Secretary shall
    ensure that the Medical Expenditures Panel Survey by the Agency
    for Healthcare Research and Quality includes the verification of
    dental utilization, expenditure, and coverage findings through
    conduct of a look-back analysis.
    (4) National oral health surveillance system.--
    (A) Appropriations.--There is authorized to be
    appropriated, such sums as may be necessary for each of
    fiscal years 2010 through 2014 to increase the
    participation of States in the National Oral Health
    Surveillance System from 16 States to all 50 States,
    territories, and District of Columbia.
    (B) Requirements.--The Secretary shall ensure that
    the National Oral Health Surveillance System include the
    measurement of early childhood caries.

    SEC. 4103. MEDICARE COVERAGE OF ANNUAL WELLNESS VISIT PROVIDING A
    PERSONALIZED PREVENTION PLAN.

    (a) Coverage of Personalized Prevention Plan Services.--
    (1) In general.--Section 1861(s)(2) of the Social Security
    Act (42 U.S.C. 1395x(s)(2)) is amended--
    (A) in subparagraph (DD), by striking ``and'' at the
    end;
    (B) in subparagraph (EE), by adding ``and'' at the
    end; and
    (C) by adding at the end the following new
    subparagraph:
    ``(FF) personalized prevention plan services (as defined in
    subsection (hhh));''.
    (2) Conforming amendments.--Clauses (i) and (ii) of section
    1861(s)(2)(K) of the Social Security Act (42 U.S.C.
    1395x(s)(2)(K)) are each amended by striking ``subsection
    (ww)(1)'' and inserting ``subsections (ww)(1) and (hhh)''.

    (b) Personalized Prevention Plan Services Defined.--Section 1861 of
    the Social Security Act (42 U.S.C. 1395x) is amended by adding at the
    end the following new subsection:

    ``Annual Wellness Visit

    ``(hhh)(1) The term `personalized prevention plan services' means
    the creation of a plan for an individual--
    ``(A) that includes a health risk assessment (that meets the
    guidelines established by the Secretary under paragraph (4)(A))
    of the individual that is completed prior to or as part of the
    same visit with a health professional described in paragraph
    (3); and
    ``(B) that--
    ``(i) takes into account the results of the health
    risk assessment; and
    ``(ii) may contain the elements described in
    paragraph (2).

    ``(2) Subject to paragraph (4)(H), the elements described in this
    paragraph are the following:
    ``(A) The establishment of, or an update to, the
    individual's medical and family history.
    ``(B) A list of current providers and suppliers that are
    regularly involved in providing medical care to the individual
    (including a list of all prescribed medications).

    [[Page 554]]

    ``(C) A measurement of height, weight, body mass index (or
    waist circumference, if appropriate), blood pressure, and other
    routine measurements.
    ``(D) Detection of any cognitive impairment.
    ``(E) The establishment of, or an update to, the following:
    ``(i) A screening schedule for the next 5 to 10
    years, as appropriate, based on recommendations of the
    United States Preventive Services Task Force and the
    Advisory Committee on Immunization Practices, and the
    individual's health status, screening history, and age-
    appropriate preventive services covered under this
    title.
    ``(ii) A list of risk factors and conditions for
    which primary, secondary, or tertiary prevention
    interventions are recommended or are underway, including
    any mental health conditions or any such risk factors or
    conditions that have been identified through an initial
    preventive physical examination (as described under
    subsection (ww)(1)), and a list of treatment options and
    their associated risks and benefits.
    ``(F) The furnishing of personalized health advice and a
    referral, as appropriate, to health education or preventive
    counseling services or programs aimed at reducing identified
    risk factors and improving self-management, or community-based
    lifestyle interventions to reduce health risks and promote self-
    management and wellness, including weight loss, physical
    activity, smoking cessation, fall prevention, and nutrition.
    ``(G) Any other element determined appropriate by the
    Secretary.

    ``(3) A health professional described in this paragraph is--
    ``(A) a physician;
    ``(B) a practitioner described in clause (i) of section
    1842(b)(18)(C); or
    ``(C) a medical professional (including a health educator,
    registered dietitian, or nutrition professional) or a team of
    medical professionals, as determined appropriate by the
    Secretary, under the supervision of a physician.

    ``(4)(A) For <> purposes of paragraph (1)(A), the Secretary,
    not later than 1 year after the date of enactment of this subsection,
    shall establish publicly available guidelines for health risk
    assessments. Such guidelines shall be developed in consultation with
    relevant groups and entities and shall provide that a health risk
    assessment--
    ``(i) identify chronic diseases, injury risks, modifiable
    risk factors, and urgent health needs of the individual; and
    ``(ii) may be furnished--
    ``(I) through an interactive telephonic or web-based
    program that meets the standards established under
    subparagraph (B);
    ``(II) during an encounter with a health care
    professional;
    ``(III) through community-based prevention programs;
    or
    ``(IV) through any other means the Secretary
    determines appropriate to maximize accessibility and
    ease of use by beneficiaries, while ensuring the privacy
    of such beneficiaries.

    [[Page 555]]

    ``(B) Not <> later than 1 year after the date of
    enactment of this subsection, the Secretary shall establish standards
    for interactive telephonic or web-based programs used to furnish health
    risk assessments under subparagraph (A)(ii)(I). The Secretary may
    utilize any health risk assessment developed under section 4004(f) of
    the Patient Protection and Affordable Care Act as part of the
    requirement to develop a personalized prevention plan to comply with
    this subparagraph.

    ``(C)(i) Not later <> than 18 months after the date of enactment of this subsection,
    the Secretary shall develop and make available to the public a health
    risk assessment model. Such model shall meet the guidelines under
    subparagraph (A) and may be used to meet the requirement under paragraph
    (1)(A).

    ``(ii) Any health risk assessment that meets the guidelines under
    subparagraph (A) and is approved by the Secretary may be used to meet
    the requirement under paragraph (1)(A).
    ``(D) The Secretary may coordinate with community-based entities
    (including State Health Insurance Programs, Area Agencies on Aging,
    Aging and Disability Resource Centers, and the Administration on Aging)
    to--
    ``(i) ensure that health risk assessments are accessible to
    beneficiaries; and
    ``(ii) provide appropriate support for the completion of
    health risk assessments by beneficiaries.

    ``(E) The <> Secretary shall establish procedures
    to make beneficiaries and providers aware of the requirement that a
    beneficiary complete a health risk assessment prior to or at the same
    time as receiving personalized prevention plan services.

    ``(F) To the extent practicable, the Secretary shall encourage the
    use of, integration with, and coordination of health information
    technology (including use of technology that is compatible with
    electronic medical records and personal health records) and may
    experiment with the use of personalized technology to aid in the
    development of self-management skills and management of and adherence to
    provider recommendations in order to improve the health status of
    beneficiaries.
    ``(G)(i) A beneficiary shall only be eligible to receive an initial
    preventive physical examination (as defined under subsection (ww)(1)) at
    any time during the 12-month period after the date that the
    beneficiary's coverage begins under part B and shall be eligible to
    receive personalized prevention plan services under this subsection
    provided that the beneficiary has not received such services within the
    preceding 12-month period.
    ``(ii) The Secretary <> shall establish
    procedures to make beneficiaries aware of the option to select an
    initial preventive physical examination or personalized prevention plan
    services during the period of 12 months after the date that a
    beneficiary's coverage begins under part B, which shall include
    information regarding any relevant differences between such services.

    ``(H) The <> Secretary shall issue guidance that--
    ``(i) identifies elements under paragraph (2) that are
    required to be provided to a beneficiary as part of their first
    visit for personalized prevention plan services; and
    ``(ii) establishes a yearly schedule for appropriate
    provision of such elements thereafter.''.

    (c) Payment and Elimination of Cost-Sharing.--

    [[Page 556]]

    (1) Payment and elimination of coinsurance.--Section
    1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) is
    amended--
    (A) in subparagraph (N), by inserting ``other than
    personalized prevention plan services (as defined in
    section 1861(hhh)(1))'' after ``(as defined in section
    1848(j)(3))'';
    (B) by striking ``and'' before ``(W)''; and
    (C) by inserting before the semicolon at the end the
    following: ``, and (X) with respect to personalized
    prevention plan services (as defined in section
    1861(hhh)(1)), the amount paid shall be 100 percent of
    the lesser of the actual charge for the services or the
    amount determined under the payment basis determined
    under section 1848''.
    (2) Payment under physician fee schedule.--Section
    1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-4(j)(3))
    is amended by inserting ``(2)(FF) (including administration of
    the health risk assessment) ,'' after ``(2)(EE),''.
    (3) Elimination of coinsurance in outpatient hospital
    settings.--
    (A) Exclusion from opd fee schedule.--Section
    1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C.
    1395l(t)(1)(B)(iv)) is amended by striking ``and
    diagnostic mammography'' and inserting ``, diagnostic
    mammography, or personalized prevention plan services
    (as defined in section 1861(hhh)(1))''.
    (B) Conforming amendments.--Section 1833(a)(2) of
    the Social Security Act (42 U.S.C. 1395l(a)(2)) is
    amended--
    (i) in subparagraph (F), by striking ``and''
    at the end;
    (ii) in subparagraph (G)(ii), by striking the
    comma at the end and inserting ``; and''; and
    (iii) by inserting after subparagraph (G)(ii)
    the following new subparagraph:
    ``(H) with respect to personalized prevention plan
    services (as defined in section 1861(hhh)(1)) furnished
    by an outpatient department of a hospital, the amount
    determined under paragraph (1)(X),''.
    (4) Waiver of application of deductible.--The first sentence
    of section 1833(b) of the Social Security Act (42 U.S.C.
    1395l(b)) is amended--
    (A) by striking ``and'' before ``(9)''; and
    (B) by inserting before the period the following:
    ``, and (10) such deductible shall not apply with
    respect to personalized prevention plan services (as
    defined in section 1861(hhh)(1))''.

    (d) Frequency Limitation.--Section 1862(a) of the Social Security
    Act (42 U.S.C. 1395y(a)) is amended--
    (1) in paragraph (1)--
    (A) in subparagraph (N), by striking ``and'' at the
    end;
    (B) in subparagraph (O), by striking the semicolon
    at the end and inserting ``, and''; and
    (C) by adding at the end the following new
    subparagraph:
    ``(P) in the case of personalized prevention plan services
    (as defined in section 1861(hhh)(1)), which are performed more
    frequently than is covered under such section;''; and

    [[Page 557]]

    (2) in paragraph (7), by striking ``or (K)'' and inserting
    ``(K), or (P)''.

    (e) Effective <> Date.--The amendments
    made by this section shall apply to services furnished on or after
    January 1, 2011.

    SEC. 4104. REMOVAL OF BARRIERS TO PREVENTIVE SERVICES IN MEDICARE.

    (a) Definition of Preventive Services.--Section 1861(ddd) of the
    Social Security Act (42 U.S.C. 1395x(ddd)) is amended--
    (1) in the heading, by inserting ``; Preventive Services''
    after ``Services'';
    (2) in paragraph (1), by striking ``not otherwise described
    in this title'' and inserting ``not described in subparagraph
    (A) or (C) of paragraph (3)''; and
    (3) by adding at the end the following new paragraph:

    ``(3) The term `preventive services' means the following:
    ``(A) The screening and preventive services described in
    subsection (ww)(2) (other than the service described in
    subparagraph (M) of such subsection).
    ``(B) An initial preventive physical examination (as defined
    in subsection (ww)).
    ``(C) Personalized prevention plan services (as defined in
    subsection (hhh)(1)).''.

    (b) Coinsurance.--
    (1) General application.--
    (A) In general.--Section 1833(a)(1) of the Social
    Security Act (42 U.S.C. 1395l(a)(1)), as amended by
    section 4103(c)(1), is amended--
    (i) in subparagraph (T), by inserting ``(or
    100 percent if such services are recommended with
    a grade of A or B by the United States Preventive
    Services Task Force for any indication or
    population and are appropriate for the
    individual)'' after ``80 percent'';
    (ii) in subparagraph (W)--
    (I) in clause (i), by inserting
    ``(if such subparagraph were applied, by
    substituting `100 percent' for `80
    percent')'' after ``subparagraph (D)'';
    and
    (II) in clause (ii), by striking
    ``80 percent'' and inserting ``100
    percent'';
    (iii) by striking ``and'' before ``(X)''; and
    (iv) by inserting before the semicolon at the
    end the following: ``, and (Y) with respect to
    preventive services described in subparagraphs (A)
    and (B) of section 1861(ddd)(3) that are
    appropriate for the individual and, in the case of
    such services described in subparagraph (A), are
    recommended with a grade of A or B by the United
    States Preventive Services Task Force for any
    indication or population, the amount paid shall be
    100 percent of the lesser of the actual charge for
    the services or the amount determined under the
    fee schedule that applies to such services under
    this part''.
    (2) Elimination of coinsurance in outpatient hospital
    settings.--
    (A) Exclusion from opd fee schedule.--Section
    1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C.

    [[Page 558]]

    1395l(t)(1)(B)(iv)), as amended by section
    4103(c)(3)(A), is amended--
    (i) by striking ``or'' before ``personalized
    prevention plan services''; and
    (ii) by inserting before the period the
    following: ``, or preventive services described in
    subparagraphs (A) and (B) of section 1861(ddd)(3)
    that are appropriate for the individual and, in
    the case of such services described in
    subparagraph (A), are recommended with a grade of
    A or B by the United States Preventive Services
    Task Force for any indication or population''.
    (B) Conforming amendments.--Section 1833(a)(2) of
    the Social Security Act (42 U.S.C. 1395l(a)(2)), as
    amended by section 4103(c)(3)(B), is amended--
    (i) in subparagraph (G)(ii), by striking
    ``and'' after the semicolon at the end;
    (ii) in subparagraph (H), by striking the
    comma at the end and inserting ``; and''; and
    (iii) by inserting after subparagraph (H) the
    following new subparagraph:
    ``(I) with respect to preventive services described
    in subparagraphs (A) and (B) of section 1861(ddd)(3)
    that are appropriate for the individual and are
    furnished by an outpatient department of a hospital and,
    in the case of such services described in subparagraph
    (A), are recommended with a grade of A or B by the
    United States Preventive Services Task Force for any
    indication or population, the amount determined under
    paragraph (1)(W) or (1)(Y),''.

    (c) Waiver of Application of Deductible for Preventive Services and
    Colorectal Cancer Screening Tests.--Section 1833(b) of the Social
    Security Act (42 U.S.C. 1395l(b)), as amended by section 4103(c)(4), is
    amended--
    (1) in paragraph (1), by striking ``items and services
    described in section 1861(s)(10)(A)'' and inserting ``preventive
    services described in subparagraph (A) of section 1861(ddd)(3)
    that are recommended with a grade of A or B by the United States
    Preventive Services Task Force for any indication or population
    and are appropriate for the individual.''; and
    (2) by adding at the end the following new sentence:
    ``Paragraph (1) of the first sentence of this subsection shall
    apply with respect to a colorectal cancer screening test
    regardless of the code that is billed for the establishment of a
    diagnosis as a result of the test, or for the removal of tissue
    or other matter or other procedure that is furnished in
    connection with, as a result of, and in the same clinical
    encounter as the screening test.''.

    (d) Effective <> Date.--The amendments
    made by this section shall apply to items and services furnished on or
    after January 1, 2011.

    SEC. 4105. EVIDENCE-BASED COVERAGE OF PREVENTIVE SERVICES IN MEDICARE.

    (a) Authority To Modify or Eliminate Coverage of Certain Preventive
    Services.--Section 1834 of the Social Security Act (42 U.S.C. 1395m) is
    amended by adding at the end the following new subsection:

    [[Page 559]]

    ``(n) Authority To Modify or Eliminate Coverage of Certain
    Preventive Services.--Notwithstanding <> any
    other provision of this title, effective beginning on January 1, 2010,
    if the Secretary determines appropriate, the Secretary may--
    ``(1) modify--
    ``(A) the coverage of any preventive service
    described in subparagraph (A) of section 1861(ddd)(3) to
    the extent that such modification is consistent with the
    recommendations of the United States Preventive Services
    Task Force; and
    ``(B) the services included in the initial
    preventive physical examination described in
    subparagraph (B) of such section; and
    ``(2) provide that no payment shall be made under this title
    for a preventive service described in subparagraph (A) of such
    section that has not received a grade of A, B, C, or I by such
    Task Force.''.

    (b) Construction.--Nothing <> in the
    amendment made by paragraph (1) shall be construed to affect the
    coverage of diagnostic or treatment services under title XVIII of the
    Social Security Act.

    SEC. 4106. IMPROVING ACCESS TO PREVENTIVE SERVICES FOR ELIGIBLE ADULTS
    IN MEDICAID.

    (a) Clarification of Inclusion of Services.--Section 1905(a)(13) of
    the Social Security Act (42 U.S.C. 1396d(a)(13)) is amended to read as
    follows:
    ``(13) other diagnostic, screening, preventive, and
    rehabilitative services, including--
    ``(A) any clinical preventive services that are
    assigned a grade of A or B by the United States
    Preventive Services Task Force;
    ``(B) with respect to an adult individual, approved
    vaccines recommended by the Advisory Committee on
    Immunization Practices (an advisory committee
    established by the Secretary, acting through the
    Director of the Centers for Disease Control and
    Prevention) and their administration; and
    ``(C) any medical or remedial services (provided in
    a facility, a home, or other setting) recommended by a
    physician or other licensed practitioner of the healing
    arts within the scope of their practice under State law,
    for the maximum reduction of physical or mental
    disability and restoration of an individual to the best
    possible functional level;''.

    (b) Increased Fmap.--Section 1905(b) of the Social Security Act (42
    U.S.C. 1396d(b)), as amended by sections 2001(a)(3)(A) and 2004(c)(1),
    is amended in the first sentence--
    (1) by striking ``, and (4)'' and inserting ``, (4)''; and
    (2) by inserting before the period the following: ``, and
    (5) in the case of a State that provides medical assistance for
    services and vaccines described in subparagraphs (A) and (B) of
    subsection (a)(13), and prohibits cost-sharing for such services
    and vaccines, the Federal medical assistance percentage, as
    determined under this subsection and subsection (y) (without
    regard to paragraph (1)(C) of such subsection), shall be
    increased by 1 percentage point with respect to medical

    [[Page 560]]

    assistance for such services and vaccines and for items and
    services described in subsection (a)(4)(D)''.

    (c) Effective <> Date.--The amendments
    made under this section shall take effect on January 1, 2013.

    SEC. 4107. COVERAGE OF COMPREHENSIVE TOBACCO CESSATION SERVICES FOR
    PREGNANT WOMEN IN MEDICAID.

    (a) Requiring Coverage of Counseling and Pharmacotherapy for
    Cessation of Tobacco Use by Pregnant Women.--Section 1905 of the Social
    Security Act (42 U.S.C. 1396d), as amended by sections 2001(a)(3)(B) and
    2303, is further amended--
    (1) in subsection (a)(4)--
    (A) by striking ``and'' before ``(C)''; and
    (B) by inserting before the semicolon at the end the
    following new subparagraph: ``; and (D) counseling and
    pharmacotherapy for cessation of tobacco use by pregnant
    women (as defined in subsection (bb))''; and
    (2) by adding at the end the following:

    ``(bb)(1) For <> purposes of this title, the term
    `counseling and pharmacotherapy for cessation of tobacco use by pregnant
    women' means diagnostic, therapy, and counseling services and
    pharmacotherapy (including the coverage of prescription and
    nonprescription tobacco cessation agents approved by the Food and Drug
    Administration) for cessation of tobacco use by pregnant women who use
    tobacco products or who are being treated for tobacco use that is
    furnished--
    ``(A) by or under the supervision of a physician; or
    ``(B) by any other health care professional who--
    ``(i) is legally authorized to furnish such services
    under State law (or the State regulatory mechanism
    provided by State law) of the State in which the
    services are furnished; and
    ``(ii) is authorized to receive payment for other
    services under this title or is designated by the
    Secretary for this purpose.

    ``(2) Subject to paragraph (3), such term is limited to--
    ``(A) services recommended with respect to pregnant women in
    `Treating Tobacco Use and Dependence: 2008 Update: A Clinical
    Practice Guideline', published by the Public Health Service in
    May 2008, or any subsequent modification of such Guideline; and
    ``(B) such other services that the Secretary recognizes to
    be effective for cessation of tobacco use by pregnant women.

    ``(3) Such term shall not include coverage for drugs or biologicals
    that are not otherwise covered under this title.''.
    (b) Exception From Optional Restriction Under Medicaid Prescription
    Drug Coverage.--Section 1927(d)(2)(F) of the Social Security Act (42
    U.S.C. 1396r-8(d)(2)(F)), as redesignated by section 2502(a), is amended
    by inserting before the period at the end the following: ``, except, in
    the case of pregnant women when recommended in accordance with the
    Guideline referred to in section 1905(bb)(2)(A), agents approved by the
    Food and Drug Administration under the over-the-counter monograph
    process for purposes of promoting, and when used to promote, tobacco
    cessation''.

    [[Page 561]]

    (c) Removal of Cost-Sharing for Counseling and Pharmacotherapy for
    Cessation of Tobacco Use by Pregnant Women.--
    (1) General cost-sharing limitations.--Section 1916 of the
    Social Security Act (42 U.S.C. 1396o) is amended in each of
    subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and
    counseling and pharmacotherapy for cessation of tobacco use by
    pregnant women (as defined in section 1905(bb)) and covered
    outpatient drugs (as defined in subsection (k)(2) of section
    1927 and including nonprescription drugs described in subsection
    (d)(2) of such section) that are prescribed for purposes of
    promoting, and when used to promote, tobacco cessation by
    pregnant women in accordance with the Guideline referred to in
    section 1905(bb)(2)(A)'' after ``complicate the pregnancy''.
    (2) Application to alternative cost-sharing.--Section
    1916A(b)(3)(B)(iii) of such Act (42 U.S.C. 1396o-
    1(b)(3)(B)(iii)) is amended by inserting ``, and counseling and
    pharmacotherapy for cessation of tobacco use by pregnant women
    (as defined in section 1905(bb))'' after ``complicate the
    pregnancy''.

    (d) Effective <> Date.--The amendments
    made by this section shall take effect on October 1, 2010.

    SEC. 4108. INCENTIVES <> FOR
    PREVENTION OF CHRONIC DISEASES IN MEDICAID.

    (a) Initiatives.--
    (1) Establishment.--
    (A) In general.--The Secretary shall award grants to
    States to carry out initiatives to provide incentives to
    Medicaid beneficiaries who--
    (i) successfully participate in a program
    described in paragraph (3); and
    (ii) upon completion of such participation,
    demonstrate changes in health risk and outcomes,
    including the adoption and maintenance of healthy
    behaviors by meeting specific targets (as
    described in subsection (c)(2)).
    (B) Purpose.--The purpose of the initiatives under
    this section is to test approaches that may encourage
    behavior modification and determine scalable solutions.
    (2) Duration.--
    (A) Initiation <> of program;
    resources.--The Secretary shall awards grants to States
    beginning on January 1, 2011, or beginning on the date
    on which the Secretary develops program criteria,
    whichever is <> earlier. The Secretary
    shall develop program criteria for initiatives under
    this section using relevant evidence-based research and
    resources, including the Guide to Community Preventive
    Services, the Guide to Clinical Preventive Services, and
    the National Registry of Evidence-Based Programs and
    Practices.
    (B) Duration <> of program.--A
    State awarded a grant to carry out initiatives under
    this section shall carry out such initiatives within the
    5-year period beginning on January 1, 2011, or beginning
    on the date on which the Secretary develops program
    criteria, whichever is earlier. Initiatives under this
    section shall be carried out by a State for a period of
    not less than 3 years.

    [[Page 562]]

    (3) Program described.--
    (A) In general.--A program described in this
    paragraph is a comprehensive, evidence-based, widely
    available, and easily accessible program, proposed by
    the State and approved by the Secretary, that is
    designed and uniquely suited to address the needs of
    Medicaid beneficiaries and has demonstrated success in
    helping individuals achieve one or more of the
    following:
    (i) Ceasing use of tobacco products.
    (ii) Controlling or reducing their weight.
    (iii) Lowering their cholesterol.
    (iv) Lowering their blood pressure.
    (v) Avoiding the onset of diabetes or, in the
    case of a diabetic, improving the management of
    that condition.
    (B) Co-morbidities.--A program under this section
    may also address co-morbidities (including depression)
    that are related to any of the conditions described in
    subparagraph (A).
    (C) Waiver authority.--The Secretary may waive the
    requirements of section 1902(a)(1) (relating to
    statewideness) of the Social Security Act for a State
    awarded a grant to conduct an initiative under this
    section and shall ensure that a State makes any program
    described in subparagraph (A) available and accessible
    to Medicaid beneficiaries.
    (D) Flexibility in implementation.--A State may
    enter into arrangements with providers participating in
    Medicaid, community-based organizations, faith-based
    organizations, public-private partnerships, Indian
    tribes, or similar entities or organizations to carry
    out programs described in subparagraph (A).
    (4) Application.--Following the development of program
    criteria by the Secretary, a State may submit an application, in
    such manner and containing such information as the Secretary may
    require, that shall include a proposal for programs described in
    paragraph (3)(A) and a plan to make Medicaid beneficiaries and
    providers participating in Medicaid who reside in the State
    aware and informed about such programs.

    (b) Education and Outreach Campaign.--
    (1) State awareness.--The Secretary shall conduct an
    outreach and education campaign to make States aware of the
    grants under this section.
    (2) Provider and beneficiary education.--A State awarded a
    grant to conduct an initiative under this section shall conduct
    an outreach and education campaign to make Medicaid
    beneficiaries and providers participating in Medicaid who reside
    in the State aware of the programs described in subsection
    (a)(3) that are to be carried out by the State under the grant.

    (c) Impact.--A State awarded a grant to conduct an initiative under
    this section shall develop and implement a system to--
    (1) track Medicaid beneficiary participation in the program
    and validate changes in health risk and outcomes with clinical
    data, including the adoption and maintenance of health behaviors
    by such beneficiaries;

    [[Page 563]]

    (2) to the extent practicable, establish standards and
    health status targets for Medicaid beneficiaries participating
    in the program and measure the degree to which such standards
    and targets are met;
    (3) evaluate the effectiveness of the program and provide
    the Secretary with such evaluations;
    (4) report <> to the Secretary on processes
    that have been developed and lessons learned from the program;
    and
    (5) report <> on preventive services as part
    of reporting on quality measures for Medicaid managed care
    programs.

    (d) Evaluations and Reports.--
    (1) Independent <> assessment.--The
    Secretary shall enter into a contract with an independent entity
    or organization to conduct an evaluation and assessment of the
    initiatives carried out by States under this section, for the
    purpose of determining--
    (A) the effect of such initiatives on the use of
    health care services by Medicaid beneficiaries
    participating in the program;
    (B) the extent to which special populations
    (including adults with disabilities, adults with chronic
    illnesses, and children with special health care needs)
    are able to participate in the program;
    (C) the level of satisfaction of Medicaid
    beneficiaries with respect to the accessibility and
    quality of health care services provided through the
    program; and
    (D) the administrative costs incurred by State
    agencies that are responsible for administration of the
    program.
    (2) State reporting.--A State awarded a grant to carry out
    initiatives under this section shall submit reports to the
    Secretary, on a semi-annual basis, regarding the programs that
    are supported by the grant funds. Such report shall include
    information, as specified by the Secretary, regarding--
    (A) the specific uses of the grant funds;
    (B) an assessment of program implementation and
    lessons learned from the programs;
    (C) an assessment of quality improvements and
    clinical outcomes under such programs; and
    (D) estimates of cost savings resulting from such
    programs.
    (3) Initial report.--Not later than January 1, 2014, the
    Secretary shall submit to Congress an initial report on such
    initiatives based on information provided by States through
    reports required under paragraph (2). The initial report shall
    include an interim evaluation of the effectiveness of the
    initiatives carried out with grants awarded under this section
    and a recommendation regarding whether funding for expanding or
    extending the initiatives should be extended beyond January 1,
    2016.
    (4) Final report.--Not later than July 1, 2016, the
    Secretary shall submit to Congress a final report on the program
    that includes the results of the independent assessment required
    under paragraph (1), together with recommendations for such
    legislation and administrative action as the Secretary
    determines appropriate.

    [[Page 564]]

    (e) No Effect on Eligibility for, or Amount of, Medicaid or Other
    Benefits.--Any incentives provided to a Medicaid beneficiary
    participating in a program described in subsection (a)(3) shall not be
    taken into account for purposes of determining the beneficiary's
    eligibility for, or amount of, benefits under the Medicaid program or
    any program funded in whole or in part with Federal funds.
    (f) Funding.--Out of any funds in the Treasury not otherwise
    appropriated, there are appropriated for the 5-year period beginning on
    January 1, 2011, $100,000,000 to the Secretary to carry out this
    section. Amounts appropriated under this subsection shall remain
    available until expended.
    (g) Definitions.--In this section:
    (1) Medicaid beneficiary.--The term ``Medicaid beneficiary''
    means an individual who is eligible for medical assistance under
    a State plan or waiver under title XIX of the Social Security
    Act (42 U.S.C. 1396 et seq.) and is enrolled in such plan or
    waiver.
    (2) State.--The term ``State'' has the meaning given that
    term for purposes of title XIX of the Social Security Act (42
    U.S.C. 1396 et seq.).

    Subtitle C--Creating Healthier Communities

    SEC. 4201. COMMUNITY <> TRANSFORMATION GRANTS.

    (a) In General.--The Secretary of Health and Human Services
    (referred to in this section as the ``Secretary''), acting through the
    Director of the Centers for Disease Control and Prevention (referred to
    in this section as the ``Director''), shall award competitive grants to
    State and local governmental agencies and community-based organizations
    for the implementation, evaluation, and dissemination of evidence-based
    community preventive health activities in order to reduce chronic
    disease rates, prevent the development of secondary conditions, address
    health disparities, and develop a stronger evidence-base of effective
    prevention programming.
    (b) Eligibility.--To be eligible to receive a grant under subsection
    (a), an entity shall--
    (1) be--
    (A) a State governmental agency;
    (B) a local governmental agency;
    (C) a national network of community-based
    organizations;
    (D) a State or local non-profit organization; or
    (E) an Indian tribe; and
    (2) submit to the Director an application at such time, in
    such a manner, and containing such information as the Director
    may require, including a description of the program to be
    carried out under the grant; and
    (3) demonstrate a history or capacity, if funded, to develop
    relationships necessary to engage key stakeholders from multiple
    sectors within and beyond health care and across a community,
    such as healthy futures corps and health care providers.

    (c) Use of Funds.--

    [[Page 565]]

    (1) In general.--An eligible entity shall use amounts
    received under a grant under this section to carry out programs
    described in this subsection.
    (2) Community transformation plan.--
    (A) In general.--An eligible entity that receives a
    grant under this section shall submit to the Director
    (for approval) a detailed plan that includes the policy,
    environmental, programmatic, and as appropriate
    infrastructure changes needed to promote healthy living
    and reduce disparities.
    (B) Activities.--Activities within the plan may
    focus on (but not be limited to)--
    (i) creating healthier school environments,
    including increasing healthy food options,
    physical activity opportunities, promotion of
    healthy lifestyle, emotional wellness, and
    prevention curricula, and activities to prevent
    chronic diseases;
    (ii) creating the infrastructure to support
    active living and access to nutritious foods in a
    safe environment;
    (iii) developing and promoting programs
    targeting a variety of age levels to increase
    access to nutrition, physical activity and smoking
    cessation, improve social and emotional wellness,
    enhance safety in a community, or address any
    other chronic disease priority area identified by
    the grantee;
    (iv) assessing and implementing worksite
    wellness programming and incentives;
    (v) working to highlight healthy options at
    restaurants and other food venues;
    (vi) prioritizing strategies to reduce racial
    and ethnic disparities, including social,
    economic, and geographic determinants of health;
    and
    (vii) addressing special populations needs,
    including all age groups and individuals with
    disabilities, and individuals in both urban and
    rural areas.
    (3) Community-based prevention health activities.--
    (A) In general.--An eligible entity shall use
    amounts received under a grant under this section to
    implement a variety of programs, policies, and
    infrastructure improvements to promote healthier
    lifestyles.
    (B) Activities.--An eligible entity shall implement
    activities detailed in the community transformation plan
    under paragraph (2).
    (C) In-kind support.--An eligible entity may provide
    in-kind resources such as staff, equipment, or office
    space in carrying out activities under this section.
    (4) Evaluation.--
    (A) In general.--An eligible entity shall use
    amounts provided under a grant under this section to
    conduct activities to measure changes in the prevalence
    of chronic disease risk factors among community members
    participating in preventive health activities
    (B) Types of measures.--In carrying out subparagraph
    (A), the eligible entity shall, with respect to
    residents in the community, measure--
    (i) changes in weight;

    [[Page 566]]

    (ii) changes in proper nutrition;
    (iii) changes in physical activity;
    (iv) changes in tobacco use prevalence;
    (v) changes in emotional well-being and
    overall mental health;
    (vi) other factors using community-specific
    data from the Behavioral Risk Factor Surveillance
    Survey; and
    (vii) other factors as determined by the
    Secretary.
    (C) Reporting.--An eligible entity shall annually
    submit to the Director a report containing an evaluation
    of activities carried out under the grant.
    (5) Dissemination.--A grantee under this section shall--
    (A) meet at least annually in regional or national
    meetings to discuss challenges, best practices, and
    lessons learned with respect to activities carried out
    under the grant; and
    (B) develop models for the replication of successful
    programs and activities and the mentoring of other
    eligible entities.

    (d) Training.--
    (1) In general.--The Director shall develop a program to
    provide training for eligible entities on effective strategies
    for the prevention and control of chronic disease and the link
    between physical, emotional, and social well-being.
    (2) Community transformation plan.--The Director shall
    provide appropriate feedback and technical assistance to
    grantees to establish community transformation plans
    (3) Evaluation.--The Director shall provide a literature
    review and framework for the evaluation of programs conducted as
    part of the grant program under this section, in addition to
    working with academic institutions or other entities with
    expertise in outcome evaluation.

    (e) Prohibition.--A grantee shall not use funds provided under a
    grant under this section to create video games or to carry out any other
    activities that may lead to higher rates of obesity or inactivity.
    (f) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section, such sums as may be necessary
    for each fiscal years 2010 through 2014.

    SEC. 4202. HEALTHY <> AGING, LIVING WELL;
    EVALUATION OF COMMUNITY-BASED PREVENTION AND WELLNESS
    PROGRAMS FOR MEDICARE BENEFICIARIES.

    (a) Healthy Aging, Living Well.--
    (1) In general.--The Secretary of Health and Human Services
    (referred to in this section as the ``Secretary''), acting
    through the Director of the Centers for Disease Control and
    Prevention, shall award grants to State or local health
    departments and Indian tribes to carry out 5-year pilot programs
    to provide public health community interventions, screenings,
    and where necessary, clinical referrals for individuals who are
    between 55 and 64 years of age.
    (2) Eligibility.--To be eligible to receive a grant under
    paragraph (1), an entity shall--
    (A) be--
    (i) a State health department;

    [[Page 567]]

    (ii) a local health department; or
    (iii) an Indian tribe;
    (B) submit to the Secretary an application at such
    time, in such manner, and containing such information as
    the Secretary may require including a description of the
    program to be carried out under the grant;
    (C) design a strategy for improving the health of
    the 55-to-64 year-old population through community-based
    public health interventions; and
    (D) demonstrate the capacity, if funded, to develop
    the relationships necessary with relevant health
    agencies, health care providers, community-based
    organizations, and insurers to carry out the activities
    described in paragraph (3), such relationships to
    include the identification of a community-based clinical
    partner, such as a community health center or rural
    health clinic.
    (3) Use of funds.--
    (A) In general.--A State or local health department
    shall use amounts received under a grant under this
    subsection to carry out a program to provide the
    services described in this paragraph to individuals who
    are between 55 and 64 years of age.
    (B) Public health interventions.--
    (i) In general.--In developing and
    implementing such activities, a grantee shall
    collaborate with the Centers for Disease Control
    and Prevention and the Administration on Aging,
    and relevant local agencies and organizations.
    (ii) Types of intervention activities.--
    Intervention activities conducted under this
    subparagraph may include efforts to improve
    nutrition, increase physical activity, reduce
    tobacco use and substance abuse, improve mental
    health, and promote healthy lifestyles among the
    target population.
    (C) Community preventive screenings.--
    (i) In general.--In addition to community-wide
    public health interventions, a State or local
    health department shall use amounts received under
    a grant under this subsection to conduct ongoing
    health screening to identify risk factors for
    cardiovascular disease, cancer, stroke, and
    diabetes among individuals in both urban and rural
    areas who are between 55 and 64 years of age.
    (ii) Types of screening activities.--Screening
    activities conducted under this subparagraph may
    include--
    (I) mental health/behavioral health
    and substance use disorders;
    (II) physical activity, smoking, and
    nutrition; and
    (III) any other measures deemed
    appropriate by the Secretary.
    (iii) Monitoring.--
    Grantees <> under this section
    shall maintain records of screening results under
    this subparagraph to establish the baseline data
    for monitoring the targeted population

    [[Page 568]]

    (D) Clinical referral/treatment for chronic
    diseases.--
    (i) In general.--A State or local health
    department shall use amounts received under a
    grant under this subsection to ensure that
    individuals between 55 and 64 years of age who are
    found to have chronic disease risk factors through
    the screening activities described in subparagraph
    (C)(ii), receive clinical referral/treatment for
    follow-up services to reduce such risk.
    (ii) Mechanism.--
    (I) Identification and determination
    of status.--With respect to each
    individual with risk factors for or
    having heart disease, stroke, diabetes,
    or any other condition for which such
    individual was screened under
    subparagraph (C), a grantee under this
    section shall determine whether or not
    such individual is covered under any
    public or private health insurance
    program.
    (II) Insured individuals.--An
    individual determined to be covered
    under a health insurance program under
    subclause (I) shall be referred by the
    grantee to the existing providers under
    such program or, if such individual does
    not have a current provider, to a
    provider who is in-network with respect
    to the program involved.
    (III) Uninsured individuals.--With
    respect to an individual determined to
    be uninsured under subclause (I), the
    grantee's community-based clinical
    partner described in paragraph (4)(D)
    shall assist the individual in
    determining eligibility for available
    public coverage options and identify
    other appropriate community health care
    resources and assistance programs.
    (iii) Public health intervention program.--A
    State or local health department shall use amounts
    received under a grant under this subsection to
    enter into contracts with community health centers
    or rural health clinics and mental health and
    substance use disorder service providers to assist
    in the referral/treatment of at risk patients to
    community resources for clinical follow-up and
    help determine eligibility for other public
    programs.
    (E) Grantee evaluation.--An eligible entity shall
    use amounts provided under a grant under this subsection
    to conduct activities to measure changes in the
    prevalence of chronic disease risk factors among
    participants.
    (4) Pilot program evaluation.--The Secretary shall conduct
    an annual evaluation of the effectiveness of the pilot program
    under this subsection. In determining such effectiveness, the
    Secretary shall consider changes in the prevalence of
    uncontrolled chronic disease risk factors among new Medicare
    enrollees (or individuals nearing enrollment, including those
    who are 63 and 64 years of age) who reside in States or
    localities receiving grants under this section as compared with
    national and historical data for those States and localities for
    the same population.

    [[Page 569]]

    (5) Authorization of appropriations.--There are authorized
    to be appropriated to carry out this subsection, such sums as
    may be necessary for each of fiscal years 2010 through 2014.

    (b) Evaluation and Plan for Community-based Prevention and Wellness
    Programs for Medicare Beneficiaries.--
    (1) In general.--The Secretary shall conduct an evaluation
    of community-based prevention and wellness programs and develop
    a plan for promoting healthy lifestyles and chronic disease
    self-management for Medicare beneficiaries.
    (2) Medicare evaluation of prevention and wellness
    programs.--
    (A) In general.--The Secretary shall evaluate
    community prevention and wellness programs including
    those that are sponsored by the Administration on Aging,
    are evidence-based, and have demonstrated potential to
    help Medicare beneficiaries (particularly beneficiaries
    that have attained 65 years of age) reduce their risk of
    disease, disability, and injury by making healthy
    lifestyle choices, including exercise, diet, and self-
    management of chronic diseases.
    (B) Evaluation.--The evaluation under subparagraph
    (A) shall consist of the following:
    (i) Evidence review.--The Secretary shall
    review available evidence, literature, best
    practices, and resources that are relevant to
    programs that promote healthy lifestyles and
    reduce risk factors for the Medicare population.
    The Secretary may determine the scope of the
    evidence review and such issues to be considered,
    which shall include, at a minimum--
    (I) physical activity, nutrition,
    and obesity;
    (II) falls;
    (III) chronic disease self-
    management; and
    (IV) mental health.
    (ii) Independent evaluation of evidence-based
    community prevention and wellness programs.--The
    Administrator of the Centers for Medicare &
    Medicaid Services, in consultation with the
    Assistant Secretary for Aging, shall, to the
    extent feasible and practicable, conduct an
    evaluation of existing community prevention and
    wellness programs that are sponsored by the
    Administration on Aging to assess the extent to
    which Medicare beneficiaries who participate in
    such programs--
    (I) reduce their health risks,
    improve their health outcomes, and adopt
    and maintain healthy behaviors;
    (II) improve their ability to manage
    their chronic conditions; and
    (III) reduce their utilization of
    health services and associated costs
    under the Medicare program for
    conditions that are amenable to
    improvement under such programs.
    (3) Report.--Not later than September 30, 2013, the
    Secretary shall submit to Congress a report that includes--
    (A) recommendations for such legislation and
    administrative action as the Secretary determines
    appropriate to

    [[Page 570]]

    promote healthy lifestyles and chronic disease self-
    management for Medicare beneficiaries;
    (B) any relevant findings relating to the evidence
    review under paragraph (2)(B)(i); and
    (C) the results of the evaluation under paragraph
    (2)(B)(ii).
    (4) Funding.--For purposes of carrying out this subsection,
    the Secretary shall provide for the transfer, from the Federal
    Hospital Insurance Trust Fund under section 1817 of the Social
    Security Act (42 U.S.C. 1395i) and the Federal Supplemental
    Medical Insurance Trust Fund under section 1841 of such Act (42
    U.S.C. 1395t), in such proportion as the Secretary determines
    appropriate, of $50,000,000 to the Centers for Medicare &
    Medicaid Services Program Management Account. Amounts
    transferred under the preceding sentence shall remain available
    until expended.
    (5) Administration.--Chapter 35 of title 44, United States
    Code shall not apply to the this subsection.
    (6) Medicare <> beneficiary.--In this
    subsection, the term ``Medicare beneficiary'' means an
    individual who is entitled to benefits under part A of title
    XVIII of the Social Security Act and enrolled under part B of
    such title.

    SEC. 4203. REMOVING BARRIERS AND IMPROVING ACCESS TO WELLNESS FOR
    INDIVIDUALS WITH DISABILITIES.

    Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et seq.) is
    amended by adding at the end of the following:

    ``SEC. 510. ESTABLISHMENT <> OF STANDARDS FOR
    ACCESSIBLE MEDICAL DIAGNOSTIC EQUIPMENT.

    ``(a) Standards.--Not <> later than 24 months after
    the date of enactment of the Affordable Health Choices Act, the
    Architectural and Transportation Barriers Compliance Board shall, in
    consultation with the Commissioner of the Food and Drug Administration,
    promulgate regulatory standards in accordance with the Administrative
    Procedure Act (2 U.S.C. 551 et seq.) setting forth the minimum technical
    criteria for medical diagnostic equipment used in (or in conjunction
    with) physician's offices, clinics, emergency rooms, hospitals, and
    other medical settings. The standards shall ensure that such equipment
    is accessible to, and usable by, individuals with accessibility needs,
    and shall allow independent entry to, use of, and exit from the
    equipment by such individuals to the maximum extent possible.

    ``(b) Medical Diagnostic Equipment Covered.--The standards issued
    under subsection (a) for medical diagnostic equipment shall apply to
    equipment that includes examination tables, examination chairs
    (including chairs used for eye examinations or procedures, and dental
    examinations or procedures), weight scales, mammography equipment, x-ray
    machines, and other radiological equipment commonly used for diagnostic
    purposes by health professionals.
    ``(c) Review and Amendment.--The Architectural and Transportation
    Barriers Compliance Board, in consultation with the Commissioner of the
    Food and Drug Administration, shall periodically review and, as
    appropriate, amend the standards in accordance with the Administrative
    Procedure Act (2 U.S.C. 551 et seq.).''.

    [[Page 571]]

    SEC. 4204. IMMUNIZATIONS.

    (a) State Authority To Purchase Recommended Vaccines for Adults.--
    Section 317 of the Public Health Service Act (42 U.S.C. 247b) is amended
    by adding at the end the following:
    ``(l) Authority to Purchase Recommended Vaccines for Adults.--
    ``(1) In general.--The Secretary may negotiate and enter
    into contracts with manufacturers of vaccines for the purchase
    and delivery of vaccines for adults as provided for under
    subsection (e).
    ``(2) State purchase.--A State may obtain additional
    quantities of such adult vaccines (subject to amounts specified
    to the Secretary by the State in advance of negotiations)
    through the purchase of vaccines from manufacturers at the
    applicable price negotiated by the Secretary under this
    subsection.''.

    (b) Demonstration Program to Improve Immunization Coverage.--Section
    317 of the Public Health Service Act (42 U.S.C. 247b), as amended by
    subsection (a), is further amended by adding at the end the following:
    ``(m) Demonstration <> Program To Improve
    Immunization Coverage.--
    ``(1) In general.--The Secretary, acting through the
    Director of the Centers for Disease Control and Prevention,
    shall establish a demonstration program to award grants to
    States to improve the provision of recommended immunizations for
    children, adolescents, and adults through the use of evidence-
    based, population-based interventions for high-risk populations.
    ``(2) State plan.--To be eligible for a grant under
    paragraph (1), a State shall submit to the Secretary an
    application at such time, in such manner, and containing such
    information as the Secretary may require, including a State plan
    that describes the interventions to be implemented under the
    grant and how such interventions match with local needs and
    capabilities, as determined through consultation with local
    authorities.
    ``(3) Use of funds.--Funds received under a grant under this
    subsection shall be used to implement interventions that are
    recommended by the Task Force on Community Preventive Services
    (as established by the Secretary, acting through the Director of
    the Centers for Disease Control and Prevention) or other
    evidence-based interventions, including--
    ``(A) providing immunization reminders or recalls
    for target populations of clients, patients, and
    consumers;
    ``(B) educating targeted populations and health care
    providers concerning immunizations in combination with
    one or more other interventions;
    ``(C) reducing out-of-pocket costs for families for
    vaccines and their administration;
    ``(D) carrying out immunization-promoting strategies
    for participants or clients of public programs,
    including assessments of immunization status, referrals
    to health care providers, education, provision of on-
    site immunizations, or incentives for immunization;

    [[Page 572]]

    ``(E) providing for home visits that promote
    immunization through education, assessments of need,
    referrals, provision of immunizations, or other
    services;
    ``(F) providing reminders or recalls for
    immunization providers;
    ``(G) conducting assessments of, and providing
    feedback to, immunization providers;
    ``(H) any combination of one or more interventions
    described in this paragraph; or
    ``(I) immunization information systems to allow all
    States to have electronic databases for immunization
    records.
    ``(4) Consideration.--In awarding grants under this
    subsection, the Secretary shall consider any reviews or
    recommendations of the Task Force on Community Preventive
    Services.
    ``(5) Evaluation.--Not <> later than 3
    years after the date on which a State receives a grant under
    this subsection, the State shall submit to the Secretary an
    evaluation of progress made toward improving immunization
    coverage rates among high-risk populations within the State.
    ``(6) Report to congress.--Not later than 4 years after the
    date of enactment of the Affordable Health Choices Act, the
    Secretary shall submit to Congress a report concerning the
    effectiveness of the demonstration program established under
    this subsection together with recommendations on whether to
    continue and expand such program.
    ``(7) Authorization of appropriations.--There is authorized
    to be appropriated to carry out this subsection, such sums as
    may be necessary for each of fiscal years 2010 through 2014.''.

    (c) Reauthorization of Immunization Program.--Section 317(j) of the
    Public Health Service Act (42 U.S.C. 247b(j)) is amended--
    (1) in paragraph (1), by striking ``for each of the fiscal
    years 1998 through 2005''; and
    (2) in paragraph (2), by striking ``after October 1,
    1997,''.

    (d) Rule of <> Construction Regarding
    Access to Immunizations.--Nothing in this section (including the
    amendments made by this section), or any other provision of this Act
    (including any amendments made by this Act) shall be construed to
    decrease children's access to immunizations.

    (e) GAO Study and Report on Medicare Beneficiary Access to
    Vaccines.--
    (1) Study.--The Comptroller General of the United States (in
    this section referred to as the ``Comptroller General'') shall
    conduct a study on the ability of Medicare beneficiaries who
    were 65 years of age or older to access routinely recommended
    vaccines covered under the prescription drug program under part
    D of title XVIII of the Social Security Act over the period
    since the establishment of such program. Such study shall
    include the following:
    (A) An analysis and determination of--
    (i) the number of Medicare beneficiaries who
    were 65 years of age or older and were eligible
    for a routinely recommended vaccination that was
    covered under part D;

    [[Page 573]]

    (ii) the number of such beneficiaries who
    actually received a routinely recommended
    vaccination that was covered under part D; and
    (iii) any barriers to access by such
    beneficiaries to routinely recommended
    vaccinations that were covered under part D.
    (B) A summary of the findings and recommendations by
    government agencies, departments, and advisory bodies
    (as well as relevant professional organizations) on the
    impact of coverage under part D of routinely recommended
    adult immunizations for access to such immunizations by
    Medicare beneficiaries.
    (2) Report.--Not later than June 1, 2011, the Comptroller
    General shall submit to the appropriate committees of
    jurisdiction of the House of Representatives and the Senate a
    report containing the results of the study conducted under
    paragraph (1), together with recommendations for such
    legislation and administrative action as the Comptroller General
    determines appropriate.
    (3) Funding.--Out of any funds in the Treasury not otherwise
    appropriated, there are appropriated $1,000,000 for fiscal year
    2010 to carry out this subsection.

    SEC. 4205. NUTRITION LABELING OF STANDARD MENU ITEMS AT CHAIN
    RESTAURANTS.

    (a) Technical Amendments.--Section 403(q)(5)(A) of the Federal Food,
    Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)(A)) is amended--
    (1) in subitem (i), by inserting at the beginning ``except
    as provided in clause (H)(ii)(III),''; and
    (2) in subitem (ii), by inserting at the beginning ``except
    as provided in clause (H)(ii)(III),''.

    (b) Labeling Requirements.--Section 403(q)(5) of the Federal Food,
    Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)) is amended by adding at the
    end the following:
    ``(H) Restaurants, Retail Food Establishments, and Vending
    Machines.--
    ``(i) General requirements for restaurants and similar
    retail food establishments.--Except for food described in
    subclause (vii), in the case of food that is a standard menu
    item that is offered for sale in a restaurant or similar retail
    food establishment that is part of a chain with 20 or more
    locations doing business under the same name (regardless of the
    type of ownership of the locations) and offering for sale
    substantially the same menu items, the restaurant or similar
    retail food establishment shall disclose the information
    described in subclauses (ii) and (iii).
    ``(ii) Information required to be disclosed by restaurants
    and retail food establishments.--Except as provided in subclause
    (vii), the restaurant or similar retail food establishment shall
    disclose in a clear and conspicuous manner--
    ``(I)(aa) in a nutrient content disclosure statement
    adjacent to the name of the standard menu item, so as to
    be clearly associated with the standard menu item, on
    the menu listing the item for sale, the number of
    calories

    [[Page 574]]

    contained in the standard menu item, as usually prepared
    and offered for sale; and
    ``(bb) a succinct statement concerning suggested
    daily caloric intake, as specified by the Secretary by
    regulation and posted prominently on the menu and
    designed to enable the public to understand, in the
    context of a total daily diet, the significance of the
    caloric information that is provided on the menu;
    ``(II)(aa) in a nutrient content disclosure
    statement adjacent to the name of the standard menu
    item, so as to be clearly associated with the standard
    menu item, on the menu board, including a drive-through
    menu board, the number of calories contained in the
    standard menu item, as usually prepared and offered for
    sale; and
    ``(bb) a succinct statement concerning suggested
    daily caloric intake, as specified by the Secretary by
    regulation and posted prominently on the menu board,
    designed to enable the public to understand, in the
    context of a total daily diet, the significance of the
    nutrition information that is provided on the menu
    board;
    ``(III) in a written form, available on the premises of the
    restaurant or similar retail establishment and to the consumer
    upon request, the nutrition information required under clauses
    (C) and (D) of subparagraph (1); and
    ``(IV) on the menu or menu board, a prominent, clear, and
    conspicuous statement regarding the availability of the
    information described in item (III).
    ``(iii) Self-service food and food on display.--Except as
    provided in subclause (vii), in the case of food sold at a salad
    bar, buffet line, cafeteria line, or similar self-service
    facility, and for self-service beverages or food that is on
    display and that is visible to customers, a restaurant or
    similar retail food establishment shall place adjacent to each
    food offered a sign that lists calories per displayed food item
    or per serving.
    ``(iv) Reasonable basis.--For the purposes of this clause, a
    restaurant or similar retail food establishment shall have a
    reasonable basis for its nutrient content disclosures, including
    nutrient databases, cookbooks, laboratory analyses, and other
    reasonable means, as described in section 101.10 of title 21,
    Code of Federal Regulations (or any successor regulation) or in
    a related guidance of the Food and Drug Administration.
    ``(v) Menu variability and combination meals.--The Secretary
    shall establish by regulation standards for determining and
    disclosing the nutrient content for standard menu items that
    come in different flavors, varieties, or combinations, but which
    are listed as a single menu item, such as soft drinks, ice
    cream, pizza, doughnuts, or children's combination meals,
    through means determined by the Secretary, including ranges,
    averages, or other methods.
    ``(vi) Additional information.--If the Secretary determines
    that a nutrient, other than a nutrient required under subclause
    (ii)(III), should be disclosed for the purpose of providing
    information to assist consumers in maintaining healthy dietary
    practices, the Secretary may require, by regulation, disclosure
    of such nutrient in the written form required under subclause
    (ii)(III).
    ``(vii) Nonapplicability to certain food.--

    [[Page 575]]

    ``(I) In general.--Subclauses (i) through (vi) do
    not apply to--
    ``(aa) items that are not listed on a menu or
    menu board (such as condiments and other items
    placed on the table or counter for general use);
    ``(bb) daily specials, temporary menu items
    appearing on the menu for less than 60 days per
    calendar year, or custom orders; or
    ``(cc) such other food that is part of a
    customary market test appearing on the menu for
    less than 90 days, under terms and conditions
    established by the Secretary.
    ``(II) Written <> forms.--
    Subparagraph (5)(C) shall apply to any regulations
    promulgated under subclauses (ii)(III) and (vi).
    ``(viii) Vending machines.--
    ``(I) In general.--In the case of an article of food
    sold from a vending machine that--
    ``(aa) does not permit a prospective purchaser
    to examine the Nutrition Facts Panel before
    purchasing the article or does not otherwise
    provide visible nutrition information at the point
    of purchase; and
    ``(bb) is operated by a person who is engaged
    in the business of owning or operating 20 or more
    vending machines,
    the vending machine operator shall provide a sign in
    close proximity to each article of food or the selection
    button that includes a clear and conspicuous statement
    disclosing the number of calories contained in the
    article.
    ``(ix) Voluntary provision of nutrition information.--
    ``(I) In general.--An authorized official of any
    restaurant or similar retail food establishment or
    vending machine operator not subject to the requirements
    of this clause may elect to be subject to the
    requirements of such clause, by registering biannually
    the name and address of such restaurant or similar
    retail food establishment or vending machine operator
    with the Secretary, as specified by the Secretary by
    regulation.
    ``(II) Registration.--
    Within <> 120 days of enactment of this clause, the
    Secretary shall publish a notice in the Federal Register
    specifying the terms and conditions for implementation
    of item (I), pending promulgation of regulations.
    ``(III) Rule of construction.--Nothing in this
    subclause shall be construed to authorize the Secretary
    to require an application, review, or licensing process
    for any entity to register with the Secretary, as
    described in such item.
    ``(x) Regulations.--
    ``(I) Proposed <> regulation.--Not
    later than 1 year after the date of enactment of this
    clause, the Secretary shall promulgate proposed
    regulations to carry out this clause.
    ``(II) Contents.--In promulgating regulations, the
    Secretary shall--
    ``(aa) consider standardization of recipes and
    methods of preparation, reasonable variation in
    serving

    [[Page 576]]

    size and formulation of menu items, space on menus
    and menu boards, inadvertent human error, training
    of food service workers, variations in
    ingredients, and other factors, as the Secretary
    determines; and
    ``(bb) specify the format and manner of the
    nutrient content disclosure requirements under
    this subclause.
    ``(III) Reporting.--The Secretary shall submit to
    the Committee on Health, Education, Labor, and Pensions
    of the Senate and the Committee on Energy and Commerce
    of the House of Representatives a quarterly report that
    describes the Secretary's progress toward promulgating
    final regulations under this subparagraph.
    ``(xi) Definition.--In this clause, the term `menu' or `menu
    board' means the primary writing of the restaurant or other
    similar retail food establishment from which a consumer makes an
    order selection.''

    (c) National Uniformity.--Section 403A(a)(4) of the Federal Food,
    Drug, and Cosmetic Act (21 U.S.C. 343-1(a)(4)) is amended by striking
    ``except a requirement for nutrition labeling of food which is exempt
    under subclause (i) or (ii) of section 403(q)(5)(A)'' and inserting
    ``except that this paragraph does not apply to food that is offered for
    sale in a restaurant or similar retail food establishment that is not
    part of a chain with 20 or more locations doing business under the same
    name (regardless of the type of ownership of the locations) and offering
    for sale substantially the same menu items unless such restaurant or
    similar retail food establishment complies with the voluntary provision
    of nutrition information requirements under section 403(q)(5)(H)(ix)''.
    (d) Rule of <> Construction.--Nothing in the
    amendments made by this section shall be construed--
    (1) to preempt any provision of State or local law, unless
    such provision establishes or continues into effect nutrient
    content disclosures of the type required under section
    403(q)(5)(H) of the Federal Food, Drug, and Cosmetic Act (as
    added by subsection (b)) and is expressly preempted under
    subsection (a)(4) of such section;
    (2) to apply to any State or local requirement respecting a
    statement in the labeling of food that provides for a warning
    concerning the safety of the food or component of the food; or
    (3) except as provided in section 403(q)(5)(H)(ix) of the
    Federal Food, Drug, and Cosmetic Act (as added by subsection
    (b)), to apply to any restaurant or similar retail food
    establishment other than a restaurant or similar retail food
    establishment described in section 403(q)(5)(H)(i) of such Act.

    SEC. 4206. DEMONSTRATION PROJECT CONCERNING INDIVIDUALIZED WELLNESS
    PLAN.

    Section 330 of the Public Health Service Act (42 U.S.C. 245b) is
    amended by adding at the end the following:
    ``(s) Demonstration Program for Individualized Wellness Plans.--
    ``(1) In general.--The Secretary shall establish a pilot
    program to test the impact of providing at-risk populations who
    utilize community health centers funded under this section an
    individualized wellness plan that is designed to reduce risk

    [[Page 577]]

    factors for preventable conditions as identified by a
    comprehensive risk-factor assessment.
    ``(2) Agreements.--The Secretary shall enter into agreements
    with not more than 10 community health centers funded under this
    section to conduct activities under the pilot program under
    paragraph (1).
    ``(3) Wellness plans.--
    ``(A) In general.--An individualized wellness plan
    prepared under the pilot program under this subsection
    may include one or more of the following as appropriate
    to the individual's identified risk factors:
    ``(i) Nutritional counseling.
    ``(ii) A physical activity plan.
    ``(iii) Alcohol and smoking cessation
    counseling and services.
    ``(iv) Stress management.
    ``(v) Dietary supplements that have health
    claims approved by the Secretary.
    ``(vi) Compliance assistance provided by a
    community health center employee.
    ``(B) Risk factors.--Wellness plan risk factors
    shall include--
    ``(i) weight;
    ``(ii) tobacco and alcohol use;
    ``(iii) exercise rates;
    ``(iv) nutritional status; and
    ``(v) blood pressure.
    ``(C) Comparisons.--Individualized wellness plans
    shall make comparisons between the individual involved
    and a control group of individuals with respect to the
    risk factors described in subparagraph (B).
    ``(4) Authorization of appropriations.--There is authorized
    to be appropriated to carry out this subsection, such sums as
    may be necessary.''.

    SEC. 4207. REASONABLE BREAK TIME FOR NURSING MOTHERS.

    Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) is
    amended by adding at the end the following:
    ``(r)(1) An employer shall provide--
    ``(A) a reasonable break time for an employee to express
    breast milk for her nursing child for 1 year after the child's
    birth each time such employee has need to express the milk; and
    ``(B) a place, other than a bathroom, that is shielded from
    view and free from intrusion from coworkers and the public,
    which may be used by an employee to express breast milk.

    ``(2) An employer shall not be required to compensate an employee
    receiving reasonable break time under paragraph (1) for any work time
    spent for such purpose.
    ``(3) An employer that employs less than 50 employees shall not be
    subject to the requirements of this subsection, if such requirements
    would impose an undue hardship by causing the employer significant
    difficulty or expense when considered in relation to the size, financial
    resources, nature, or structure of the employer's business.

    [[Page 578]]

    ``(4) Nothing in this subsection shall preempt a State law that
    provides greater protections to employees than the protections provided
    for under this subsection.''.

    Subtitle D--Support for Prevention and Public Health Innovation

    SEC. 4301. RESEARCH <> ON OPTIMIZING THE DELIVERY
    OF PUBLIC HEALTH SERVICES.

    (a) In General.--The Secretary of Health and Human Services
    (referred to in this section as the ``Secretary''), acting through the
    Director of the Centers for Disease Control and Prevention, shall
    provide funding for research in the area of public health services and
    systems.
    (b) Requirements of Research.--Research supported under this section
    shall include--
    (1) examining evidence-based practices relating to
    prevention, with a particular focus on high priority areas as
    identified by the Secretary in the National Prevention Strategy
    or Healthy People 2020, and including comparing community-based
    public health interventions in terms of effectiveness and cost;
    (2) analyzing the translation of interventions from academic
    settings to real world settings; and
    (3) identifying effective strategies for organizing,
    financing, or delivering public health services in real world
    community settings, including comparing State and local health
    department structures and systems in terms of effectiveness and
    cost.

    (c) Existing Partnerships.--Research supported under this section
    shall be coordinated with the Community Preventive Services Task Force
    and carried out by building on existing partnerships within the Federal
    Government while also considering initiatives at the State and local
    levels and in the private sector.
    (d) Annual Report.--The Secretary shall, on an annual basis, submit
    to Congress a report concerning the activities and findings with respect
    to research supported under this section.

    SEC. 4302. UNDERSTANDING HEALTH DISPARITIES: DATA COLLECTION AND
    ANALYSIS.

    (a) Uniform Categories and Collection Requirements.--The Public
    Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the
    end the following:

    ``TITLE XXXI--DATA COLLECTION, ANALYSIS, AND QUALITY

    ``SEC. 3101. <> DATA COLLECTION, ANALYSIS, AND
    QUALITY.

    ``(a) Data Collection.--
    ``(1) In <> general.--The Secretary shall
    ensure that, by not later than 2 years after the date of
    enactment of this title, any federally conducted or supported
    health care or public health program, activity or survey
    (including Current Population Surveys and American Community
    Surveys conducted

    [[Page 579]]

    by the Bureau of Labor Statistics and the Bureau of the Census)
    collects and reports, to the extent practicable--
    ``(A) data on race, ethnicity, sex, primary
    language, and disability status for applicants,
    recipients, or participants;
    ``(B) data at the smallest geographic level such as
    State, local, or institutional levels if such data can
    be aggregated;
    ``(C) sufficient data to generate statistically
    reliable estimates by racial, ethnic, sex, primary
    language, and disability status subgroups for
    applicants, recipients or participants using, if needed,
    statistical oversamples of these subpopulations; and
    ``(D) any other demographic data as deemed
    appropriate by the Secretary regarding health
    disparities.
    ``(2) Collection standards.--In collecting data described in
    paragraph (1), the Secretary or designee shall--
    ``(A) use Office of Management and Budget standards,
    at a minimum, for race and ethnicity measures;
    ``(B) develop standards for the measurement of sex,
    primary language, and disability status;
    ``(C) develop standards for the collection of data
    described in paragraph (1) that, at a minimum--
    ``(i) collects self-reported data by the
    applicant, recipient, or participant; and
    ``(ii) collects data from a parent or legal
    guardian if the applicant, recipient, or
    participant is a minor or legally incapacitated;
    ``(D) survey health care providers and establish
    other procedures in order to assess access to care and
    treatment for individuals with disabilities and to
    identify--
    ``(i) locations where individuals with
    disabilities access primary, acute (including
    intensive), and long-term care;
    ``(ii) the number of providers with accessible
    facilities and equipment to meet the needs of the
    individuals with disabilities, including medical
    diagnostic equipment that meets the minimum
    technical criteria set forth in section 510 of the
    Rehabilitation Act of 1973; and
    ``(iii) the number of employees of health care
    providers trained in disability awareness and
    patient care of individuals with disabilities; and
    ``(E) require that any reporting requirement imposed
    for purposes of measuring quality under any ongoing or
    federally conducted or supported health care or public
    health program, activity, or survey includes
    requirements for the collection of data on individuals
    receiving health care items or services under such
    programs activities by race, ethnicity, sex, primary
    language, and disability status.
    ``(3) Data management.--In collecting data described in
    paragraph (1), the Secretary, acting through the National
    Coordinator for Health Information Technology shall--
    ``(A) develop <> national
    standards for the management of data collected; and
    ``(B) develop interoperability and security systems
    for data management.

    [[Page 580]]

    ``(b) Data Analysis.--
    ``(1) In general.--For each federally conducted or supported
    health care or public health program or activity, the Secretary
    shall analyze data collected under paragraph (a) to detect and
    monitor trends in health disparities (as defined for purposes of
    section 485E) at the Federal and State levels.

    ``(c) Data Reporting and Dissemination.--
    ``(1) In general.--The Secretary shall make the analyses
    described in (b) available to--
    ``(A) the Office of Minority Health;
    ``(B) the National Center on Minority Health and
    Health Disparities;
    ``(C) the Agency for Healthcare Research and
    Quality;
    ``(D) the Centers for Disease Control and
    Prevention;
    ``(E) the Centers for Medicare & Medicaid Services;
    ``(F) the Indian Health Service and epidemiology
    centers funded under the Indian Health Care Improvement
    Act;
    ``(G) the Office of Rural health;
    ``(H) other agencies within the Department of Health
    and Human Services; and
    ``(I) other entities as determined appropriate by
    the Secretary.
    ``(2) Reporting of data.--The Secretary shall report data
    and analyses described in (a) and (b) through--
    ``(A) public <> postings on the Internet websites of the
    Department of Health and Human Services; and
    ``(B) any other reporting or dissemination
    mechanisms determined appropriate by the Secretary.
    ``(3) Availability of data.--The Secretary may make data
    described in (a) and (b) available for additional research,
    analyses, and dissemination to other Federal agencies, non-
    governmental entities, and the public, in accordance with any
    Federal agency's data user agreements.

    ``(d) Limitations on Use of Data.--Nothing in this section shall be
    construed to permit the use of information collected under this section
    in a manner that would adversely affect any individual.
    ``(e) Protection and Sharing of Data.--
    ``(1) Privacy and other safeguards.--The Secretary shall
    ensure (through the promulgation of regulations or otherwise)
    that--
    ``(A) all data collected pursuant to subsection (a)
    is protected--
    ``(i) under privacy protections that are at
    least as broad as those that the Secretary applies
    to other health data under the regulations
    promulgated under section 264(c) of the Health
    Insurance Portability and Accountability Act of
    1996 (Public Law 104-191; 110 Stat. 2033); and
    ``(ii) from all inappropriate internal use by
    any entity that collects, stores, or receives the
    data, including use of such data in determinations
    of eligibility (or continued eligibility) in
    health plans, and from other inappropriate uses,
    as defined by the Secretary; and

    [[Page 581]]

    ``(B) all appropriate information security
    safeguards are used in the collection, analysis, and
    sharing of data collected pursuant to subsection (a).
    ``(2) Data <> sharing.--The Secretary
    shall establish procedures for sharing data collected pursuant
    to subsection (a), measures relating to such data, and analyses
    of such data, with other relevant Federal and State agencies
    including the agencies, centers, and entities within the
    Department of Health and Human Services specified in subsection
    (c)(1)..

    ``(f) Data on Rural Underserved Populations.--The Secretary shall
    ensure that any data collected in accordance with this section regarding
    racial and ethnic minority groups are also collected regarding
    underserved rural and frontier populations.
    ``(g) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated such sums as
    may be necessary for each of fiscal years 2010 through 2014.
    ``(h) Requirement for Implementation.--Notwithstanding any other
    provision of this section, data may not be collected under this section
    unless funds are directly appropriated for such purpose in an
    appropriations Act.
    ``(i) Consultation.--The Secretary shall consult with the Director
    of the Office of Personnel Management, the Secretary of Defense, the
    Secretary of Veterans Affairs, the Director of the Bureau of the Census,
    the Commissioner of Social Security, and the head of other appropriate
    Federal agencies in carrying out this section.''.
    (b) Addressing Health Care Disparities in Medicaid and CHIP.--
    (1) Standardized collection requirements included in state
    plans.--
    (A) Medicaid.--Section 1902(a) of the Social
    Security Act (42 U.S.C. 1396a(a)), as amended by section
    2001(d), is amended--
    (i) in paragraph 4), by striking ``and'' at
    the end;
    (ii) in paragraph (75), by striking the period
    at the end and inserting ``; and''; and
    (iii) by inserting after paragraph (75) the
    following new paragraph:
    ``(76) provide that any data collected under the State plan
    meets the requirements of section 3101 of the Public Health
    Service Act.''.
    (B) CHIP.--Section 2108(e) of the Social Security
    Act (42 U.S.C. 1397hh(e)) is amended by adding at the
    end the following new paragraph:
    ``(7) Data collected and reported in accordance with section
    3101 of the Public Health Service Act, with respect to
    individuals enrolled in the State child health plan (and, in the
    case of enrollees under 19 years of age, their parents or legal
    guardians), including data regarding the primary language of
    such individuals, parents, and legal guardians.''.
    (2) Extending medicare requirement to address health
    disparities data collection to medicaid and chip.--Title XIX of
    the Social Security Act (42 U.S.C. 1396 et seq.), as amended by
    section 2703 is amended by adding at the end the following new
    section:

    [[Page 582]]

    ``SEC. 1946. <> ADDRESSING HEALTH CARE
    DISPARITIES.

    ``(a) Evaluating Data Collection Approaches.--The Secretary shall
    evaluate approaches for the collection of data under this title and
    title XXI, to be performed in conjunction with existing quality
    reporting requirements and programs under this title and title XXI, that
    allow for the ongoing, accurate, and timely collection and evaluation of
    data on disparities in health care services and performance on the basis
    of race, ethnicity, sex, primary language, and disability status. In
    conducting such evaluation, the Secretary shall consider the following
    objectives:
    ``(1) Protecting patient privacy.
    ``(2) Minimizing the administrative burdens of data
    collection and reporting on States, providers, and health plans
    participating under this title or title XXI.
    ``(3) Improving program data under this title and title XXI
    on race, ethnicity, sex, primary language, and disability
    status.

    ``(b) Reports to Congress.--
    ``(1) Report on evaluation.--Not later than 18 months after
    the date of the enactment of this section, the Secretary shall
    submit to Congress a report on the evaluation conducted under
    subsection (a). Such report shall, taking into consideration the
    results of such evaluation--
    ``(A) identify approaches (including defining
    methodologies) for identifying and collecting and
    evaluating data on health care disparities on the basis
    of race, ethnicity, sex, primary language, and
    disability status for the programs under this title and
    title XXI; and
    ``(B) include recommendations on the most effective
    strategies and approaches to reporting HEDIS quality
    measures as required under section 1852(e)(3) and other
    nationally recognized quality performance measures, as
    appropriate, on such bases.
    ``(2) Reports on data analyses.--Not later than 4 years
    after the date of the enactment of this section, and 4 years
    thereafter, the Secretary shall submit to Congress a report that
    includes recommendations for improving the identification of
    health care disparities for beneficiaries under this title and
    under title XXI based on analyses of the data collected under
    subsection (c).

    ``(c) Implementing <> Effective Approaches.--Not
    later than 24 months after the date of the enactment of this section,
    the Secretary shall implement the approaches identified in the report
    submitted under subsection (b)(1) for the ongoing, accurate, and timely
    collection and evaluation of data on health care disparities on the
    basis of race, ethnicity, sex, primary language, and disability
    status.''.

    SEC. 4303. CDC AND EMPLOYER-BASED WELLNESS PROGRAMS.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.),
    by section 4102, is further amended by adding at the end the following:

    [[Page 583]]

    ``PART U--EMPLOYER-BASED WELLNESS PROGRAM

    ``SEC. 399MM. <> TECHNICAL ASSISTANCE FOR EMPLOYER-
    BASED WELLNESS PROGRAMS.

    ``In order to expand the utilization of evidence-based prevention
    and health promotion approaches in the workplace, the Director shall--
    ``(1) provide employers (including small, medium, and large
    employers, as determined by the Director) with technical
    assistance, consultation, tools, and other resources in
    evaluating such employers' employer-based wellness programs,
    including--
    ``(A) measuring the participation and methods to
    increase participation of employees in such programs;
    ``(B) developing standardized measures that assess
    policy, environmental and systems changes necessary to
    have a positive health impact on employees' health
    behaviors, health outcomes, and health care
    expenditures; and
    ``(C) evaluating such programs as they relate to
    changes in the health status of employees, the
    absenteeism of employees, the productivity of employees,
    the rate of workplace injury, and the medical costs
    incurred by employees; and
    ``(2) build evaluation capacity among workplace staff by
    training employers on how to evaluate employer-based wellness
    programs by ensuring evaluation resources, technical assistance,
    and consultation are available to workplace staff as needed
    through such mechanisms as web portals, call centers, or other
    means.

    ``SEC. 399MM-1. <> NATIONAL WORKSITE HEALTH
    POLICIES AND PROGRAMS STUDY.

    ``(a) In <> General.--In order to
    assess, analyze, and monitor over time data about workplace policies and
    programs, and to develop instruments to assess and evaluate
    comprehensive workplace chronic disease prevention and health promotion
    programs, policies and practices, not later than 2 years after the date
    of enactment of this part, and at regular intervals (to be determined by
    the Director) thereafter, the Director shall conduct a national worksite
    health policies and programs survey to assess employer-based health
    policies and programs.

    ``(b) Report.--Upon the completion of each study under subsection
    (a), the Director shall submit to Congress a report that includes the
    recommendations of the Director for the implementation of effective
    employer-based health policies and programs.

    ``SEC. 399MM-2. <> PRIORITIZATION OF EVALUATION BY
    SECRETARY.

    ``The Secretary shall evaluate, in accordance with this part, all
    programs funded through the Centers for Disease Control and Prevention
    before conducting such an evaluation of privately funded programs unless
    an entity with a privately funded wellness program requests such an
    evaluation.

    ``SEC. 399MM-3. <> PROHIBITION OF FEDERAL
    WORKPLACE WELLNESS REQUIREMENTS.

    ``Notwithstanding any other provision of this part, any
    recommendations, data, or assessments carried out under this part

    [[Page 584]]

    shall not be used to mandate requirements for workplace wellness
    programs.''.

    SEC. 4304. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS.

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

    ``Subtitle C--Strengthening Public Health Surveillance Systems

    ``SEC. 2821. <> EPIDEMIOLOGY-LABORATORY CAPACITY
    GRANTS.

    ``(a) In General.--Subject to the availability of appropriations,
    the Secretary, acting through the Director of the Centers for Disease
    Control and Prevention, shall establish an Epidemiology and Laboratory
    Capacity Grant Program to award grants to State health departments as
    well as local health departments and tribal jurisdictions that meet such
    criteria as the Director determines appropriate. Academic centers that
    assist State and eligible local and tribal health departments may also
    be eligible for funding under this section as the Director determines
    appropriate. Grants shall be awarded under this section to assist public
    health agencies in improving surveillance for, and response to,
    infectious diseases and other conditions of public health importance
    by--
    ``(1) strengthening epidemiologic capacity to identify and
    monitor the occurrence of infectious diseases and other
    conditions of public health importance;
    ``(2) enhancing laboratory practice as well as systems to
    report test orders and results electronically;
    ``(3) improving information systems including developing and
    maintaining an information exchange using national guidelines
    and complying with capacities and functions determined by an
    advisory council established and appointed by the Director; and
    ``(4) developing and implementing prevention and control
    strategies.

    ``(b) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section $190,000,000 for each of fiscal
    years 2010 through 2013, of which--
    ``(1) not less than $95,000,000 shall be made available each
    such fiscal year for activities under paragraphs (1) and (4) of
    subsection (a);
    ``(2) not less than $60,000,000 shall be made available each
    such fiscal year for activities under subsection (a)(3); and
    ``(3) not less than $32,000,000 shall be made available each
    such fiscal year for activities under subsection (a)(2).''.

    SEC. 4305. ADVANCING RESEARCH AND TREATMENT FOR PAIN CARE MANAGEMENT.

    (a) Institute of Medicine Conference on Pain.--
    (1) Convening.--Not <> later
    than 1 year after funds are appropriated to carry out this
    subsection, the Secretary of Health and Human Services shall
    seek to enter into an agreement with the Institute of Medicine
    of the National Academies to convene a Conference on Pain (in
    this subsection referred to as ``the Conference'').

    [[Page 585]]

    (2) Purposes.--The purposes of the Conference shall be to--
    (A) increase the recognition of pain as a
    significant public health problem in the United States;
    (B) evaluate the adequacy of assessment, diagnosis,
    treatment, and management of acute and chronic pain in
    the general population, and in identified racial,
    ethnic, gender, age, and other demographic groups that
    may be disproportionately affected by inadequacies in
    the assessment, diagnosis, treatment, and management of
    pain;
    (C) identify barriers to appropriate pain care;
    (D) establish an agenda for action in both the
    public and private sectors that will reduce such
    barriers and significantly improve the state of pain
    care research, education, and clinical care in the
    United States.
    (3) Other appropriate entity.--If the Institute of Medicine
    declines to enter into an agreement under paragraph (1), the
    Secretary of Health and Human Services may enter into such
    agreement with another appropriate entity.
    (4) Report.--A report summarizing the Conference's findings
    and recommendations shall be submitted to the Congress not later
    than June 30, 2011.
    (5) Authorization of appropriations.--For the purpose of
    carrying out this subsection, there is authorized to be
    appropriated such sums as may be necessary for each of fiscal
    years 2010 and 2011.

    (b) Pain Research at National Institutes of Health.--Part B of title
    IV of the Public Health Service Act (42 U.S.C. 284 et seq.) is amended
    by adding at the end the following:

    ``SEC. 409J. <> PAIN RESEARCH.

    ``(a) Research Initiatives.--
    ``(1) In general.--The Director of NIH is encouraged to
    continue and expand, through the Pain Consortium, an aggressive
    program of basic and clinical research on the causes of and
    potential treatments for pain.
    ``(2) Annual recommendations.--Not less than annually, the
    Pain Consortium, in consultation with the Division of Program
    Coordination, Planning, and Strategic Initiatives, shall develop
    and submit to the Director of NIH recommendations on appropriate
    pain research initiatives that could be undertaken with funds
    reserved under section 402A(c)(1) for the Common Fund or
    otherwise available for such initiatives.
    ``(3) Definition.--In this subsection, the term `Pain
    Consortium' means the Pain Consortium of the National Institutes
    of Health or a similar trans-National Institutes of Health
    coordinating entity designated by the Secretary for purposes of
    this subsection.

    ``(b) Interagency Pain Research Coordinating Committee.--
    ``(1) Establishment.--The <> Secretary
    shall establish not later than 1 year after the date of the
    enactment of this section and as necessary maintain a committee,
    to be known as the Interagency Pain Research Coordinating
    Committee (in this section referred to as the `Committee'), to
    coordinate all efforts within the Department of Health and Human
    Services and other Federal agencies that relate to pain
    research.

    [[Page 586]]

    ``(2) Membership.--
    ``(A) In general.--The Committee shall be composed
    of the following voting members:
    ``(i) Not more than 7 voting Federal
    representatives appoint by the Secretary from
    agencies that conduct pain care research and
    treatment.
    ``(ii) 12 additional voting members appointed
    under subparagraph (B).
    ``(B) Additional members.--The Committee shall
    include additional voting members appointed by the
    Secretary as follows:
    ``(i) 6 non-Federal members shall be appointed
    from among scientists, physicians, and other
    health professionals.
    ``(ii) 6 members shall be appointed from
    members of the general public, who are
    representatives of leading research, advocacy, and
    service organizations for individuals with pain-
    related conditions.
    ``(C) Nonvoting members.--The Committee shall
    include such nonvoting members as the Secretary
    determines to be appropriate.
    ``(3) Chairperson.--The voting members of the Committee
    shall select a chairperson from among such members. The
    selection of a chairperson shall be subject to the approval of
    the Director of NIH.
    ``(4) Meetings.--The Committee shall meet at the call of the
    chairperson of the Committee or upon the request of the Director
    of NIH, but in no case less often than once each year.
    ``(5) Duties.--The Committee shall--
    ``(A) develop a summary of advances in pain care
    research supported or conducted by the Federal agencies
    relevant to the diagnosis, prevention, and treatment of
    pain and diseases and disorders associated with pain;
    ``(B) identify critical gaps in basic and clinical
    research on the symptoms and causes of pain;
    ``(C) make recommendations to ensure that the
    activities of the National Institutes of Health and
    other Federal agencies are free of unnecessary
    duplication of effort;
    ``(D) make recommendations on how best to
    disseminate information on pain care; and
    ``(E) make recommendations on how to expand
    partnerships between public entities and private
    entities to expand collaborative, cross-cutting
    research.
    ``(6) Review.--The Secretary shall review the necessity of
    the Committee at least once every 2 years.''.

    (c) Pain Care Education and Training.--Part D of title VII of the
    Public Health Service Act (42 U.S.C. 294 et seq.) is amended by adding
    at the end the following new section:

    ``SEC. 759. PROGRAM <> FOR EDUCATION AND TRAINING IN
    PAIN CARE.

    ``(a) In General.--The Secretary may make awards of grants,
    cooperative agreements, and contracts to health professions schools,
    hospices, and other public and private entities for the development and
    implementation of programs to provide education and training to health
    care professionals in pain care.

    [[Page 587]]

    ``(b) Certain Topics.--An award may be made under subsection (a)
    only if the applicant for the award agrees that the program carried out
    with the award will include information and education on--
    ``(1) recognized means for assessing, diagnosing, treating,
    and managing pain and related signs and symptoms, including the
    medically appropriate use of controlled substances;
    ``(2) applicable laws, regulations, rules, and policies on
    controlled substances, including the degree to which
    misconceptions and concerns regarding such laws, regulations,
    rules, and policies, or the enforcement thereof, may create
    barriers to patient access to appropriate and effective pain
    care;
    ``(3) interdisciplinary approaches to the delivery of pain
    care, including delivery through specialized centers providing
    comprehensive pain care treatment expertise;
    ``(4) cultural, linguistic, literacy, geographic, and other
    barriers to care in underserved populations; and
    ``(5) recent findings, developments, and improvements in the
    provision of pain care.

    ``(c) Evaluation <> of Programs.--The
    Secretary shall (directly or through grants or contracts) provide for
    the evaluation of programs implemented under subsection (a) in order to
    determine the effect of such programs on knowledge and practice of pain
    care.

    ``(d) Pain Care Defined.--For purposes of this section the term
    `pain care' means the assessment, diagnosis, treatment, or management of
    acute or chronic pain regardless of causation or body location.
    ``(e) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section, such sums as may be necessary
    for each of the fiscal years 2010 through 2012. Amounts appropriated
    under this subsection shall remain available until expended.''.

    SEC. 4306. FUNDING FOR CHILDHOOD OBESITY DEMONSTRATION PROJECT.

    Section 1139A(e)(8) of the Social Security Act (42 U.S.C. 1320b-
    9a(e)(8)) is amended to read as follows:
    ``(8) Appropriation.--Out of any funds in the Treasury not
    otherwise appropriated, there is appropriated to carry out this
    subsection, $25,000,000 for the period of fiscal years 2010
    through 2014.''.

    Subtitle E--Miscellaneous Provisions

    SEC. 4401. SENSE OF THE SENATE CONCERNING CBO SCORING.

    (a) Finding.--The Senate finds that the costs of prevention programs
    are difficult to estimate due in part because prevention initiatives are
    hard to measure and results may occur outside the 5 and 10 year budget
    windows.
    (b) Sense of Congress.--It is the sense of the Senate that Congress
    should work with the Congressional Budget Office to develop better
    methodologies for scoring progress to be made in prevention and wellness
    programs.

    [[Page 588]]

    SEC. 4402. EFFECTIVENESS OF FEDERAL HEALTH AND WELLNESS INITIATIVES.

    To determine whether existing Federal health and wellness
    initiatives are effective in achieving their stated goals, the Secretary
    of Health and Human Services shall--
    (1) conduct <> an evaluation of such
    programs as they relate to changes in health status of the
    American public and specifically on the health status of the
    Federal workforce, including absenteeism of employees, the
    productivity of employees, the rate of workplace injury, and the
    medical costs incurred by employees, and health conditions,
    including workplace fitness, healthy food and beverages, and
    incentives in the Federal Employee Health Benefits Program; and
    (2) <> submit to Congress a report
    concerning such evaluation, which shall include conclusions
    concerning the reasons that such existing programs have proven
    successful or not successful and what factors contributed to
    such conclusions.

    TITLE V--HEALTH CARE WORKFORCE

    Subtitle A--Purpose and Definitions

    SEC. 5001. <> PURPOSE.

    The purpose of this title is to improve access to and the delivery
    of health care services for all individuals, particularly low income,
    underserved, uninsured, minority, health disparity, and rural
    populations by--
    (1) gathering and assessing comprehensive data in order for
    the health care workforce to meet the health care needs of
    individuals, including research on the supply, demand,
    distribution, diversity, and skills needs of the health care
    workforce;
    (2) increasing the supply of a qualified health care
    workforce to improve access to and the delivery of health care
    services for all individuals;
    (3) enhancing health care workforce education and training
    to improve access to and the delivery of health care services
    for all individuals; and
    (4) providing support to the existing health care workforce
    to improve access to and the delivery of health care services
    for all individuals.

    SEC. 5002. <> DEFINITIONS.

    (a) This Title.--In this title:
    (1) Allied health professional.--The term ``allied health
    professional'' means an allied health professional as defined in
    section 799B(5) of the Public Heath Service Act (42 U.S.C.
    295p(5)) who--
    (A) has graduated and received an allied health
    professions degree or certificate from an institution of
    higher education; and
    (B) is employed with a Federal, State, local or
    tribal public health agency, or in a setting where
    patients might require health care services, including
    acute care facilities, ambulatory care facilities,
    personal residences, and other

    [[Page 589]]

    settings located in health professional shortage areas,
    medically underserved areas, or medically underserved
    populations, as recognized by the Secretary of Health
    and Human Services.
    (2) Health care career pathway.--The term ``healthcare
    career pathway'' means a rigorous, engaging, and high quality
    set of courses and services that--
    (A) includes an articulated sequence of academic and
    career courses, including 21st century skills;
    (B) is aligned with the needs of healthcare
    industries in a region or State;
    (C) prepares students for entry into the full range
    of postsecondary education options, including registered
    apprenticeships, and careers;
    (D) provides academic and career counseling in
    student-to-counselor ratios that allow students to make
    informed decisions about academic and career options;
    (E) meets State academic standards, State
    requirements for secondary school graduation and is
    aligned with requirements for entry into postsecondary
    education, and applicable industry standards; and
    (F) leads to 2 or more credentials, including--
    (i) a secondary school diploma; and
    (ii) a postsecondary degree, an apprenticeship
    or other occupational certification, a
    certificate, or a license.
    (3) Institution of higher education.--The term ``institution
    of higher education'' has the meaning given the term in sections
    101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001
    and 1002).
    (4) Low income individual, state workforce investment board,
    and local workforce investment board.--
    (A) Low-income individual.--The term ``low-income
    individual'' has the meaning given that term in section
    101 of the Workforce investment Act of 1998 (29 U.S.C.
    2801).
    (B) State workforce investment board; local
    workforce investment board.--The terms ``State workforce
    investment board'' and ``local workforce investment
    board'', refer to a State workforce investment board
    established under section 111 of the Workforce
    Investment Act of 1998 (29 U.S.C. 2821) and a local
    workforce investment board established under section 117
    of such Act (29 U.S.C. 2832), respectively.
    (5) Postsecondary education.--The term ``postsecondary
    education'' means--
    (A) a 4-year program of instruction, or not less
    than a 1-year program of instruction that is acceptable
    for credit toward an associate or a baccalaureate
    degree, offered by an institution of higher education;
    or
    (B) a certificate or registered apprenticeship
    program at the postsecondary level offered by an
    institution of higher education or a non-profit
    educational institution.
    (6) Registered apprenticeship program.--The term
    ``registered apprenticeship program'' means an industry skills
    training program at the postsecondary level that combines
    technical and theoretical training through structure on the job

    [[Page 590]]

    learning with related instruction (in a classroom or through
    distance learning) while an individual is employed, working
    under the direction of qualified personnel or a mentor, and
    earning incremental wage increases aligned to enhance job
    proficiency, resulting in the acquisition of a nationally
    recognized and portable certificate, under a plan approved by
    the Office of Apprenticeship or a State agency recognized by the
    Department of Labor.

    (b) Title VII of the Public Health Service Act.--Section 799B of the
    Public Health Service Act (42 U.S.C. 295p) is amended--
    (1) by striking paragraph (3) and inserting the following:
    ``(3) Physician assistant education program.--The term
    `physician assistant education program' means an educational
    program in a public or private institution in a State that--
    ``(A) has as its objective the education of
    individuals who, upon completion of their studies in the
    program, be qualified to provide primary care medical
    services with the supervision of a physician; and
    ``(B) is accredited by the Accreditation Review
    Commission on Education for the Physician Assistant.'';
    and
    (2) by adding at the end the following:
    ``(12) Area health education center.--The term `area health
    education center' means a public or nonprofit private
    organization that has a cooperative agreement or contract in
    effect with an entity that has received an award under
    subsection (a)(1) or (a)(2) of section 751, satisfies the
    requirements in section 751(d)(1), and has as one of its
    principal functions the operation of an area health education
    center. Appropriate organizations may include hospitals, health
    organizations with accredited primary care training programs,
    accredited physician assistant educational programs associated
    with a college or university, and universities or colleges not
    operating a school of medicine or osteopathic medicine.
    ``(13) Area health education center program.--The term `area
    health education center program' means cooperative program
    consisting of an entity that has received an award under
    subsection (a)(1) or (a)(2) of section 751 for the purpose of
    planning, developing, operating, and evaluating an area health
    education center program and one or more area health education
    centers, which carries out the required activities described in
    section 751(c), satisfies the program requirements in such
    section, has as one of its principal functions identifying and
    implementing strategies and activities that address health care
    workforce needs in its service area, in coordination with the
    local workforce investment boards.
    ``(14) Clinical social worker.--The term `clinical social
    worker' has the meaning given the term in section 1861(hh)(1) of
    the Social Security Act (42 U.S.C. 1395x(hh)(1)).
    ``(15) Cultural competency.--The term `cultural competency'
    shall be defined by the Secretary in a manner consistent with
    section 1707(d)(3).
    ``(16) Direct care worker.--The term `direct care worker'
    has the meaning given that term in the 2010 Standard
    Occupational Classifications of the Department of Labor for Home
    Health Aides [31-1011], Psychiatric Aides [31-1013], Nursing
    Assistants [31-1014], and Personal Care Aides [39-9021].

    [[Page 591]]

    ``(17) Federally qualified health center.--The term
    `Federally qualified health center' has the meaning given that
    term in section 1861(aa) of the Social Security Act (42 U.S.C.
    1395x(aa)).
    ``(18) Frontier health professional shortage area.--The term
    `frontier health professional shortage area' means an area--
    ``(A) with a population density less than 6 persons
    per square mile within the service area; and
    ``(B) with respect to which the distance or time for
    the population to access care is excessive.
    ``(19) Graduate psychology.--The term `graduate psychology'
    means an accredited program in professional psychology.
    ``(20) Health disparity population.--The term `health
    disparity population' has the meaning given such term in section
    903(d)(1).
    ``(21) Health literacy.--The term `health literacy' means
    the degree to which an individual has the capacity to obtain,
    communicate, process, and understand health information and
    services in order to make appropriate health decisions.
    ``(22) Mental health service professional.--The term `mental
    health service professional' means an individual with a graduate
    or postgraduate degree from an accredited institution of higher
    education in psychiatry, psychology, school psychology,
    behavioral pediatrics, psychiatric nursing, social work, school
    social work, substance abuse disorder prevention and treatment,
    marriage and family counseling, school counseling, or
    professional counseling.
    ``(23) One-stop delivery system center.--The term `one-stop
    delivery system' means a one-stop delivery system described in
    section 134(c) of the Workforce Investment Act of 1998 (29
    U.S.C. 2864(c)).
    ``(24) Paraprofessional child and adolescent mental health
    worker.--The term `paraprofessional child and adolescent mental
    health worker' means an individual who is not a mental or
    behavioral health service professional, but who works at the
    first stage of contact with children and families who are
    seeking mental or behavioral health services, including
    substance abuse prevention and treatment services.
    ``(25) Racial and ethnic minority group; racial and ethnic
    minority population.--The terms `racial and ethnic minority
    group' and `racial and ethnic minority population' have the
    meaning given the term `racial and ethnic minority group' in
    section 1707.
    ``(26) Rural health clinic.--The term `rural health clinic'
    has the meaning given that term in section 1861(aa) of the
    Social Security Act (42 U.S.C. 1395x(aa)).''.

    (c) Title VIII of the Public Health Service Act.--Section 801 of the
    Public Health Service Act (42 U.S.C. 296) is amended--
    (1) in paragraph (2)--
    (A) by striking ``means a'' and inserting ``means an
    accredited (as defined in paragraph 6)''; and
    (B) by striking the period as inserting the
    following: ``where graduates are--
    ``(A) authorized to sit for the National Council
    Licensure EXamination-Registered Nurse (NCLEX-RN); or

    [[Page 592]]

    ``(B) licensed registered nurses who will receive a
    graduate or equivalent degree or training to become an
    advanced education nurse as defined by section
    811(b).''; and
    (2) by adding at the end the following:
    ``(16) Accelerated nursing degree program.--The term
    `accelerated nursing degree program' means a program of
    education in professional nursing offered by an accredited
    school of nursing in which an individual holding a bachelors
    degree in another discipline receives a BSN or MSN degree in an
    accelerated time frame as determined by the accredited school of
    nursing.
    ``(17) Bridge or degree completion program.--The term
    `bridge or degree completion program' means a program of
    education in professional nursing offered by an accredited
    school of nursing, as defined in paragraph (2), that leads to a
    baccalaureate degree in nursing. Such programs may include,
    Registered Nurse (RN) to Bachelor's of Science of Nursing (BSN)
    programs, RN to MSN (Master of Science of Nursing) programs, or
    BSN to Doctoral programs.''.

    Subtitle B--Innovations in the Health Care Workforce

    SEC. 5101. <> NATIONAL HEALTH CARE WORKFORCE
    COMMISSION.

    (a) Purpose.--It is the purpose of this section to establish a
    National Health Care Workforce Commission that--
    (1) serves as a national resource for Congress, the
    President, States, and localities;
    (2) communicates and coordinates with the Departments of
    Health and Human Services, Labor, Veterans Affairs, Homeland
    Security, and Education on related activities administered by
    one or more of such Departments;
    (3) develops and commissions evaluations of education and
    training activities to determine whether the demand for health
    care workers is being met;
    (4) identifies barriers to improved coordination at the
    Federal, State, and local levels and recommend ways to address
    such barriers; and
    (5) encourages innovations to address population needs,
    constant changes in technology, and other environmental factors.

    (b) Establishment.--There is hereby established the National Health
    Care Workforce Commission (in this section referred to as the
    ``Commission'').
    (c) Membership.--
    (1) Number and appointment.--The Commission shall be
    composed of 15 members to be appointed by the Comptroller
    General, without regard to section 5 of the Federal Advisory
    Committee Act (5 U.S.C. App.).
    (2) Qualifications.--
    (A) In general.--The membership of the Commission
    shall include individuals--
    (i) with national recognition for their
    expertise in health care labor market analysis,
    including health care workforce analysis; health
    care finance and

    [[Page 593]]

    economics; health care facility management; health
    care plans and integrated delivery systems; health
    care workforce education and training; health care
    philanthropy; providers of health care services;
    and other related fields; and
    (ii) who will provide a combination of
    professional perspectives, broad geographic
    representation, and a balance between urban,
    suburban, rural, and frontier representatives.
    (B) Inclusion.--
    (i) In general.--The membership of the
    Commission shall include no less than one
    representative of--
    (I) the health care workforce and
    health professionals;
    (II) employers;
    (III) third-party payers;
    (IV) individuals skilled in the
    conduct and interpretation of health
    care services and health economics
    research;
    (V) representatives of consumers;
    (VI) labor unions;
    (VII) State or local workforce
    investment boards; and
    (VIII) educational institutions
    (which may include elementary and
    secondary institutions, institutions of
    higher education, including 2 and 4 year
    institutions, or registered
    apprenticeship programs).
    (ii) Additional members.--The remaining
    membership may include additional representatives
    from clause (i) and other individuals as
    determined appropriate by the Comptroller General
    of the United States.
    (C) Majority non-providers.--Individuals who are
    directly involved in health professions education or
    practice shall not constitute a majority of the
    membership of the Commission.
    (D) Ethical <> disclosure.--The Comptroller General
    shall establish a system for public disclosure by
    members of the Commission of financial and other
    potential conflicts of interest relating to such
    members. Members of the Commission shall be treated as
    employees of Congress for purposes of applying title I
    of the Ethics in Government Act of 1978. Members of the
    Commission shall not be treated as special government
    employees under title 18, United States Code.
    (3) Terms.--
    (A) In general.--The terms of members of the
    Commission shall be for 3 years except that the
    Comptroller General shall designate staggered terms for
    the members first appointed.
    (B) Vacancies.--Any member appointed to fill a
    vacancy occurring before the expiration of the term for
    which the member's predecessor was appointed shall be
    appointed only for the remainder of that term. A member
    may serve after the expiration of that member's term
    until a successor has taken office. A vacancy in the
    Commission

    [[Page 594]]

    shall be filled in the manner in which the original
    appointment was made.
    (C) Initial appointments.--
    The <> Comptroller General shall make
    initial appointments of members to the Commission not
    later than September 30, 2010.
    (4) Compensation.--While serving on the business of the
    Commission (including travel time), a member of the Commission
    shall be entitled to compensation at the per diem equivalent of
    the rate provided for level IV of the Executive Schedule under
    section 5315 of tile 5, United States Code, and while so serving
    away from home and the member's regular place of business, a
    member may be allowed travel expenses, as authorized by the
    Chairman of the <> Commission. Physicians
    serving as personnel of the Commission may be provided a
    physician comparability allowance by the Commission in the same
    manner as Government physicians may be provided such an
    allowance by an agency under section 5948 of title 5, United
    States Code, and for such purpose subsection (i) of such section
    shall apply to the Commission in the same manner as it applies
    to the Tennessee Valley Authority. For purposes of pay (other
    than pay of members of the Commission) and employment benefits,
    rights, and privileges, all personnel of the Commission shall be
    treated as if they were employees of the United States Senate.
    Personnel of the Commission shall not be treated as employees of
    the Government Accountability Office for any purpose.
    (5) Chairman, vice chairman.--
    The <> Comptroller General shall designate a
    member of the Commission, at the time of appointment of the
    member, as Chairman and a member as Vice Chairman for that term
    of appointment, except that in the case of vacancy of the
    chairmanship or vice chairmanship, the Comptroller General may
    designate another member for the remainder of that member's
    term.
    (6) Meetings.--The Commission shall meet at the call of the
    chairman, but no less frequently than on a quarterly basis.

    (d) Duties.--
    (1) Recognition, dissemination, and communication.--The
    Commission shall--
    (A) recognize efforts of Federal, State, and local
    partnerships to develop and offer health care career
    pathways of proven effectiveness;
    (B) disseminate information on promising retention
    practices for health care professionals; and
    (C) communicate information on important policies
    and practices that affect the recruitment, education and
    training, and retention of the health care workforce.
    (2) Review of health care workforce and annual reports.--In
    order to develop a fiscally sustainable integrated workforce
    that supports a high-quality, readily accessible health care
    delivery system that meets the needs of patients and
    populations, the Commission, in consultation with relevant
    Federal, State, and local agencies, shall--
    (A) review current and projected health care
    workforce supply and demand, including the topics
    described in paragraph (3);

    [[Page 595]]

    (B) make recommendations to Congress and the
    Administration concerning national health care workforce
    priorities, goals, and policies;
    (C) by not later than October 1 of each year
    (beginning with 2011), submit a report to Congress and
    the Administration containing the results of such
    reviews and recommendations concerning related policies;
    and
    (D) by not later than April 1 of each year
    (beginning with 2011), submit a report to Congress and
    the Administration containing a review of, and
    recommendations on, at a minimum one high priority area
    as described in paragraph (4).
    (3) Specific topics to be reviewed.--The topics described in
    this paragraph include--
    (A) current health care workforce supply and
    distribution, including demographics, skill sets, and
    demands, with projected demands during the subsequent 10
    and 25 year periods;
    (B) health care workforce education and training
    capacity, including the number of students who have
    completed education and training, including registered
    apprenticeships; the number of qualified faculty; the
    education and training infrastructure; and the education
    and training demands, with projected demands during the
    subsequent 10 and 25 year periods;
    (C) the education loan and grant programs in titles
    VII and VIII of the Public Health Service Act (42 U.S.C.
    292 et seq. and 296 et seq.), with recommendations on
    whether such programs should become part of the Higher
    Education Act of 1965 (20 U.S.C. 1001 et seq);
    (D) the implications of new and existing Federal
    policies which affect the health care workforce,
    including Medicare and Medicaid graduate medical
    education policies, titles VII and VIII of the Public
    Health Service Act (42 U.S.C. 292 et seq. and 296 et
    seq.), the National Health Service Corps (with
    recommendations for aligning such programs with national
    health workforce priorities and goals), and other health
    care workforce programs, including those supported
    through the Workforce Investment Act of 1998 (29 U.S.C.
    2801 et seq.), the Carl D. Perkins Career and Technical
    Education Act of 2006 (20 U.S.C. 2301 et seq.), the
    Higher Education Act of 1965 (20 U.S.C. 1001 et seq.),
    and any other Federal health care workforce programs;
    (E) the health care workforce needs of special
    populations, such as minorities, rural populations,
    medically underserved populations, gender specific
    needs, individuals with disabilities, and geriatric and
    pediatric populations with recommendations for new and
    existing Federal policies to meet the needs of these
    special populations; and
    (F) recommendations creating or revising national
    loan repayment programs and scholarship programs to
    require low-income, minority medical students to serve
    in their home communities, if designated as medical
    underserved community.
    (4) High priority areas.--

    [[Page 596]]

    (A) In general.--The initial high priority topics
    described in this paragraph include each of the
    following:
    (i) Integrated health care workforce planning
    that identifies health care professional skills
    needed and maximizes the skill sets of health care
    professionals across disciplines.
    (ii) An analysis of the nature, scopes of
    practice, and demands for health care workers in
    the enhanced information technology and management
    workplace.
    (iii) An analysis of how to align Medicare and
    Medicaid graduate medical education policies with
    national workforce goals.
    (iv) The education and training capacity,
    projected demands, and integration with the health
    care delivery system of each of the following:
    (I) Nursing workforce capacity at
    all levels.
    (II) Oral health care workforce
    capacity at all levels.
    (III) Mental and behavioral health
    care workforce capacity at all levels.
    (IV) Allied health and public health
    care workforce capacity at all levels.
    (V) Emergency medical service
    workforce capacity, including the
    retention and recruitment of the
    volunteer workforce, at all levels.
    (VI) The geographic distribution of
    health care providers as compared to the
    identified health care workforce needs
    of States and regions.
    (B) Future determinations.--The Commission may
    require that additional topics be included under
    subparagraph (A). The appropriate committees of Congress
    may recommend to the Commission the inclusion of other
    topics for health care workforce development areas that
    require special attention.
    (5) Grant program.--The Commission shall--
    (A) review <> implementation
    progress reports on, and report to Congress about, the
    State Health Care Workforce Development Grant program
    established in section 5102;
    (B) in collaboration with the Department of Labor
    and in coordination with the Department of Education and
    other relevant Federal agencies, make recommendations to
    the fiscal and administrative agent under section
    5102(b) for grant recipients under section 5102;
    (C) assess the implementation of the grants under
    such section; and
    (D) collect performance and report information,
    including identified models and best practices, on
    grants from the fiscal and administrative agent under
    such section and distribute this information to
    Congress, relevant Federal agencies, and to the public.
    (6) Study.--The Commission shall study effective mechanisms
    for financing education and training for careers in health care,
    including public health and allied health.
    (7) Recommendations.--The Commission shall submit
    recommendations to Congress, the Department of Labor, and the
    Department of Health and Human Services about improving

    [[Page 597]]

    safety, health, and worker protections in the workplace for the
    health care workforce.
    (8) Assessment.--The Commission shall assess and receive
    reports from the National Center for Health Care Workforce
    Analysis established under section 761(b) of the Public Service
    Health Act (as amended by section 5103).

    (e) Consultation With Federal, State, and Local Agencies, Congress,
    and Other Organizations.--
    (1) In general.--The Commission shall consult with Federal
    agencies (including the Departments of Health and Human
    Services, Labor, Education, Commerce, Agriculture, Defense, and
    Veterans Affairs and the Environmental Protection Agency),
    Congress, the Medicare Payment Advisory Commission, the Medicaid
    and CHIP Payment and Access Commission, and, to the extent
    practicable, with State and local agencies, Indian tribes,
    voluntary health care organizations, professional societies, and
    other relevant public-private health care partnerships.
    (2) Obtaining official data.--The Commission, consistent
    with established privacy rules, may secure directly from any
    department or agency of the Executive Branch information
    necessary to enable the Commission to carry out this section.
    (3) Detail of federal government employees.--An employee of
    the Federal Government may be detailed to the Commission without
    reimbursement. The detail of such an employee shall be without
    interruption or loss of civil service status.

    (f) Director and Staff; Experts and Consultants.--Subject to such
    review as the Comptroller General of the United States determines to be
    necessary to ensure the efficient administration of the Commission, the
    Commission may--
    (1) employ and fix the compensation of an executive director
    that shall not exceed the rate of basic pay payable for level V
    of the Executive Schedule and such other personnel as may be
    necessary to carry out its duties (without regard to the
    provisions of title 5, United States Code, governing
    appointments in the competitive service);
    (2) seek such assistance and support as may be required in
    the performance of its duties from appropriate Federal
    departments and agencies;
    (3) enter into contracts or make other arrangements, as may
    be necessary for the conduct of the work of the Commission
    (without regard to section 3709 of the Revised Statutes (41
    U.S.C. 5));
    (4) make advance, progress, and other payments which relate
    to the work of the Commission;
    (5) provide transportation and subsistence for persons
    serving without compensation; and
    (6) prescribe such rules and regulations as the Commission
    determines to be necessary with respect to the internal
    organization and operation of the Commission.

    (g) Powers.--
    (1) Data collection.--In order to carry out its functions
    under this section, the Commission shall--
    (A) utilize existing information, both published and
    unpublished, where possible, collected and assessed
    either by its own staff or under other arrangements made
    in

    [[Page 598]]

    accordance with this section, including coordination
    with the Bureau of Labor Statistics;
    (B) carry out, or award grants or contracts for the
    carrying out of, original research and development,
    where existing information is inadequate, and
    (C) adopt procedures allowing interested parties to
    submit information for the Commission's use in making
    reports and recommendations.
    (2) Access of the government accountability office to
    information.--The Comptroller General of the United States shall
    have unrestricted access to all deliberations, records, and data
    of the Commission, immediately upon request.
    (3) Periodic audit.--The Commission shall be subject to
    periodic audit by an independent public accountant under
    contract to the Commission.

    (h) Authorization of Appropriations.--
    (1) Request for appropriations.--The Commission shall submit
    requests for appropriations in the same manner as the
    Comptroller General of the United States submits requests for
    appropriations. Amounts so appropriated for the Commission shall
    be separate from amounts appropriated for the Comptroller
    General.
    (2) Authorization.--There are authorized to be appropriated
    such sums as may be necessary to carry out this section.
    (3) Gifts and services.--The Commission may not accept
    gifts, bequeaths, or donations of property, but may accept and
    use donations of services for purposes of carrying out this
    section.

    (i) Definitions.--In this section:
    (1) Health care workforce.--The term ``health care
    workforce'' includes all health care providers with direct
    patient care and support responsibilities, such as physicians,
    nurses, nurse practitioners, primary care providers, preventive
    medicine physicians, optometrists, ophthalmologists, physician
    assistants, pharmacists, dentists, dental hygienists, and other
    oral healthcare professionals, allied health professionals,
    doctors of chiropractic, community health workers, health care
    paraprofessionals, direct care workers, psychologists and other
    behavioral and mental health professionals (including substance
    abuse prevention and treatment providers), social workers,
    physical and occupational therapists, certified nurse midwives,
    podiatrists, the EMS workforce (including professional and
    volunteer ambulance personnel and firefighters who perform
    emergency medical services), licensed complementary and
    alternative medicine providers, integrative health
    practitioners, public health professionals, and any other health
    professional that the Comptroller General of the United States
    determines appropriate.
    (2) Health professionals.--The term ``health professionals''
    includes--
    (A) dentists, dental hygienists, primary care
    providers, specialty physicians, nurses, nurse
    practitioners, physician assistants, psychologists and
    other behavioral and mental health professionals
    (including substance abuse prevention and treatment
    providers), social workers, physical and occupational
    therapists, public health professionals, clinical

    [[Page 599]]

    pharmacists, allied health professionals, doctors of
    chiropractic, community health workers, school nurses,
    certified nurse midwives, podiatrists, licensed
    complementary and alternative medicine providers, the
    EMS workforce (including professional and volunteer
    ambulance personnel and firefighters who perform
    emergency medical services), and integrative health
    practitioners;
    (B) national representatives of health
    professionals;
    (C) representatives of schools of medicine,
    osteopathy, nursing, dentistry, optometry, pharmacy,
    chiropractic, allied health, educational programs for
    public health professionals, behavioral and mental
    health professionals (as so defined), social workers,
    pharmacists, physical and occupational therapists, oral
    health care industry dentistry and dental hygiene, and
    physician assistants;
    (D) representatives of public and private teaching
    hospitals, and ambulatory health facilities, including
    Federal medical facilities; and
    (E) any other health professional the Comptroller
    General of the United States determines appropriate.

    SEC. 5102. STATE <> HEALTH CARE WORKFORCE
    DEVELOPMENT GRANTS.

    (a) Establishment.--There is established a competitive health care
    workforce development grant program (referred to in this section as the
    ``program'') for the purpose of enabling State partnerships to complete
    comprehensive planning and to carry out activities leading to coherent
    and comprehensive health care workforce development strategies at the
    State and local levels.
    (b) Fiscal and Administrative Agent.--The Health Resources and
    Services Administration of the Department of Health and Human Services
    (referred to in this section as the ``Administration'') shall be the
    fiscal and administrative agent for the grants awarded under
    this <> section. The Administration is authorized to
    carry out the program, in consultation with the National Health Care
    Workforce Commission (referred to in this section as the
    ``Commission''), which shall review reports on the development,
    implementation, and evaluation activities of the grant program,
    including--
    (1) administering the grants;
    (2) providing technical assistance to grantees; and
    (3) reporting performance information to the Commission.

    (c) Planning Grants.--
    (1) Amount and duration.--A planning grant shall be awarded
    under this subsection for a period of not more than one year and
    the maximum award may not be more than $150,000.
    (2) Eligibility.--To be eligible to receive a planning
    grant, an entity shall be an eligible partnership. An eligible
    partnership shall be a State workforce investment board, if it
    includes or modifies the members to include at least one
    representative from each of the following: health care employer,
    labor organization, a public 2-year institution of higher
    education, a public 4-year institution of higher education, the
    recognized State federation of labor, the State public secondary
    education agency, the State P-16 or P-20 Council if such a
    council exists, and a philanthropic organization that is
    actively engaged in providing learning, mentoring, and work
    opportunities to recruit,

    [[Page 600]]

    educate, and train individuals for, and retain individuals in,
    careers in health care and related industries.
    (3) Fiscal and administrative agent.--The Governor of the
    State receiving a planning grant has the authority to appoint a
    fiscal and an administrative agency for the partnership.
    (4) Application.--Each State partnership desiring a planning
    grant shall submit an application to the Administrator of the
    Administration at such time and in such manner, and accompanied
    by such information as the Administrator may reasonable require.
    Each application submitted for a planning grant shall describe
    the members of the State partnership, the activities for which
    assistance is sought, the proposed performance benchmarks to be
    used to measure progress under the planning grant, a budget for
    use of the funds to complete the required activities described
    in paragraph (5), and such additional assurance and information
    as the Administrator determines to be essential to ensure
    compliance with the grant program requirements.
    (5) Required activities.--A State partnership receiving a
    planning grant shall carry out the following:
    (A) Analyze State labor market information in order
    to create health care career pathways for students and
    adults, including dislocated workers.
    (B) Identify current and projected high demand State
    or regional health care sectors for purposes of planning
    career pathways.
    (C) Identify existing Federal, State, and private
    resources to recruit, educate or train, and retain a
    skilled health care workforce and strengthen
    partnerships.
    (D) Describe the academic and health care industry
    skill standards for high school graduation, for entry
    into postsecondary education, and for various
    credentials and licensure.
    (E) Describe State secondary and postsecondary
    education and training policies, models, or practices
    for the health care sector, including career information
    and guidance counseling.
    (F) Identify Federal or State policies or rules to
    developing a coherent and comprehensive health care
    workforce development strategy and barriers and a plan
    to resolve these barriers.
    (G) Participate in the Administration's evaluation
    and reporting activities.
    (6) Performance and evaluation.--Before the State
    partnership receives a planning grant, such partnership and the
    Administrator of the Administration shall jointly determine the
    performance benchmarks that will be established for the purposes
    of the planning grant.
    (7) Match.--Each State partnership receiving a planning
    grant shall provide an amount, in cash or in kind, that is not
    less that 15 percent of the amount of the grant, to carry out
    the activities supported by the grant. The matching requirement
    may be provided from funds available under other Federal, State,
    local or private sources to carry out the activities.
    (8) Report.--

    [[Page 601]]

    (A) Report to administration.--Not later than 1 year
    after a State partnership receives a planning grant, the
    partnership shall submit a report to the Administration
    on the State's performance of the activities under the
    grant, including the use of funds, including matching
    funds, to carry out required activities, and a
    description of the progress of the State workforce
    investment board in meeting the performance benchmarks.
    (B) Report to congress.--The Administration shall
    submit a report to Congress analyzing the planning
    activities, performance, and fund utilization of each
    State grant recipient, including an identification of
    promising practices and a profile of the activities of
    each State grant recipient.

    (d) Implementation Grants.--
    (1) In general.--The Administration shall--
    (A) competitively award implementation grants to
    State partnerships to enable such partnerships to
    implement activities that will result in a coherent and
    comprehensive plan for health workforce development that
    will address current and projected workforce demands
    within the State; and
    (B) inform the Commission and Congress about the
    awards made.
    (2) Duration.--An implementation grant shall be awarded for
    a period of no more than 2 years, except in those cases where
    the Administration determines that the grantee is high
    performing and the activities supported by the grant warrant up
    to 1 additional year of funding.
    (3) Eligibility.--To be eligible for an implementation
    grant, a State partnership shall have--
    (A) received a planning grant under subsection (c)
    and completed all requirements of such grant; or
    (B) completed a satisfactory application, including
    a plan to coordinate with required partners and complete
    the required activities during the 2 year period of the
    implementation grant.
    (4) Fiscal and administrative agent.--A State partnership
    receiving an implementation grant shall appoint a fiscal and an
    administration agent for the implementation of such grant.
    (5) Application.--Each eligible State partnership desiring
    an implementation grant shall submit an application to the
    Administration at such time, in such manner, and accompanied by
    such information as the Administration may reasonably require.
    Each application submitted shall include--
    (A) a description of the members of the State
    partnership;
    (B) a description of how the State partnership
    completed the required activities under the planning
    grant, if applicable;
    (C) a description of the activities for which
    implementation grant funds are sought, including grants
    to regions by the State partnership to advance coherent
    and comprehensive regional health care workforce
    planning activities;
    (D) a description of how the State partnership will
    coordinate with required partners and complete the

    [[Page 602]]

    required partnership activities during the duration of
    an implementation grant;
    (E) a budget proposal of the cost of the activities
    supported by the implementation grant and a timeline for
    the provision of matching funds required;
    (F) proposed performance benchmarks to be used to
    assess and evaluate the progress of the partnership
    activities;
    (G) a description of how the State partnership will
    collect data to report progress in grant activities; and
    (H) such additional assurances as the Administration
    determines to be essential to ensure compliance with
    grant requirements.
    (6) Required activities.--
    (A) In general.--A State partnership that receives
    an implementation grant may reserve not less than 60
    percent of the grant funds to make grants to be
    competitively awarded by the State partnership,
    consistent with State procurement rules, to encourage
    regional partnerships to address health care workforce
    development needs and to promote innovative health care
    workforce career pathway activities, including career
    counseling, learning, and employment.
    (B) Eligible partnership duties.--An eligible State
    partnership receiving an implementation grant shall--
    (i) identify and convene regional leadership
    to discuss opportunities to engage in statewide
    health care workforce development planning,
    including the potential use of competitive grants
    to improve the development, distribution, and
    diversity of the regional health care workforce;
    the alignment of curricula for health care
    careers; and the access to quality career
    information and guidance and education and
    training opportunities;
    (ii) in consultation with key stakeholders and
    regional leaders, take appropriate steps to reduce
    Federal, State, or local barriers to a
    comprehensive and coherent strategy, including
    changes in State or local policies to foster
    coherent and comprehensive health care workforce
    development activities, including health care
    career pathways at the regional and State levels,
    career planning information, retraining for
    dislocated workers, and as appropriate, requests
    for Federal program or administrative waivers;
    (iii) develop, disseminate, and review with
    key stakeholders a preliminary statewide strategy
    that addresses short- and long-term health care
    workforce development supply versus demand;
    (iv) convene State partnership members on a
    regular basis, and at least on a semiannual basis;
    (v) assist leaders at the regional level to
    form partnerships, including technical assistance
    and capacity building activities;

    [[Page 603]]

    (vi) collect and assess data on and report on
    the performance benchmarks selected by the State
    partnership and the Administration for
    implementation activities carried out by regional
    and State partnerships; and
    (vii) participate in the Administration's
    evaluation and reporting activities.
    (7) Performance and evaluation.--Before the State
    partnership receives an implementation grant, it and the
    Administrator shall jointly determine the performance benchmarks
    that shall be established for the purposes of the implementation
    grant.
    (8) Match.--Each State partnership receiving an
    implementation grant shall provide an amount, in cash or in kind
    that is not less than 25 percent of the amount of the grant, to
    carry out the activities supported by the grant. The matching
    funds may be provided from funds available from other Federal,
    State, local, or private sources to carry out such activities.
    (9) Reports.--
    (A) Report to administration.--For each year of the
    implementation grant, the State partnership receiving
    the implementation grant shall submit a report to the
    Administration on the performance of the State of the
    grant activities, including a description of the use of
    the funds, including matched funds, to complete
    activities, and a description of the performance of the
    State partnership in meeting the performance benchmarks.
    (B) Report to congress.--The Administration shall
    submit a report to Congress analyzing implementation
    activities, performance, and fund utilization of the
    State grantees, including an identification of promising
    practices and a profile of the activities of each State
    grantee.

    (e) Authorization for Appropriations.--
    (1) Planning grants.--There are authorized to be
    appropriated to award planning grants under subsection (c)
    $8,000,000 for fiscal year 2010, and such sums as may be
    necessary for each subsequent fiscal year.
    (2) Implementation grants.--There are authorized to be
    appropriated to award implementation grants under subsection
    (d), $150,000,000 for fiscal year 2010, and such sums as may be
    necessary for each subsequent fiscal year.

    SEC. 5103. HEALTH CARE WORKFORCE ASSESSMENT.

    (a) In <> General.--Section 761 of the Public
    Health Service Act (42 U.S.C. 294m) is amended--
    (1) by redesignating subsection (c) as subsection (e);
    (2) by striking subsection (b) and inserting the following:

    ``(b) National Center for Health Care Workforce Analysis.--
    ``(1) Establishment.--The Secretary shall establish the
    National Center for Health Workforce Analysis (referred to in
    this section as the `National Center').
    ``(2) Purposes.--The National Center, in coordination to the
    extent practicable with the National Health Care Workforce

    [[Page 604]]

    Commission (established in section 5101 of the Patient
    Protection and Affordable Care Act), and relevant regional and
    State centers and agencies, shall--
    ``(A) provide for the development of information
    describing and analyzing the health care workforce and
    workforce related issues;
    ``(B) carry out the activities under section 792(a);
    ``(C) annually evaluate programs under this title;
    ``(D) develop and publish performance measures and
    benchmarks for programs under this title; and
    ``(E) establish, <> maintain, and publicize a national Internet
    registry of each grant awarded under this title and a
    database to collect data from longitudinal evaluations
    (as described in subsection (d)(2)) on performance
    measures (as developed under sections 749(d)(3),
    757(d)(3), and 762(a)(3)).
    ``(3) Collaboration and data sharing.--
    ``(A) In general.--The National Center shall
    collaborate with Federal agencies and relevant
    professional and educational organizations or societies
    for the purpose of linking data regarding grants awarded
    under this title.
    ``(B) Contracts for health workforce analysis.--For
    the purpose of carrying out the activities described in
    subparagraph (A), the National Center may enter into
    contracts with relevant professional and educational
    organizations or societies.

    ``(c) State and Regional Centers for Health Workforce Analysis.--
    ``(1) In general.--
    The <> Secretary shall award grants
    to, or enter into contracts with, eligible entities for purposes
    of--
    ``(A) collecting, analyzing, and reporting data
    regarding programs under this title to the National
    Center and to the public; and
    ``(B) providing technical assistance to local and
    regional entities on the collection, analysis, and
    reporting of data.
    ``(2) Eligible entities.--To be eligible for a grant or
    contract under this subsection, an entity shall--
    ``(A) be a State, a State workforce investment
    board, a public health or health professions school, an
    academic health center, or an appropriate public or
    private nonprofit entity; and
    ``(B) submit to the Secretary an application at such
    time, in such manner, and containing such information as
    the Secretary may require.

    ``(d) Increase in Grants for Longitudinal Evaluations.--
    ``(1) In general.--The Secretary shall increase the amount
    awarded to an eligible entity under this title for a
    longitudinal evaluation of individuals who have received
    education, training, or financial assistance from programs under
    this title.
    ``(2) Capability.--A longitudinal evaluation shall be
    capable of--
    ``(A) studying practice patterns; and
    ``(B) collecting and reporting data on performance
    measures developed under sections 749(d)(3), 757(d)(3),
    and 762(a)(3).

    [[Page 605]]

    ``(3) Guidelines.--A longitudinal evaluation shall comply
    with guidelines issued under sections 749(d)(4), 757(d)(4), and
    762(a)(4).
    ``(4) Eligible entities.--To be eligible to obtain an
    increase under this section, an entity shall be a recipient of a
    grant or contract under this title.''; and
    (3) in subsection (e), as so redesignated--
    (A) by striking paragraph (1) and inserting the
    following:
    ``(1) In <> general.--
    ``(A) National center.--To carry out subsection (b),
    there are authorized to be appropriated $7,500,000 for
    each of fiscal years 2010 through 2014.
    ``(B) State and regional centers.--To carry out
    subsection (c), there are authorized to be appropriated
    $4,500,000 for each of fiscal years 2010 through 2014.
    ``(C) Grants for longitudinal evaluations.--To carry
    out subsection (d), there are authorized to be
    appropriated such sums as may be necessary for fiscal
    years 2010 through 2014.''; and
    (4) in paragraph (2), by striking ``subsection (a)'' and
    inserting ``paragraph (1)''.

    (b) Transfers.--Not <> later than
    180 days after the date of enactment of this Act, the responsibilities
    and resources of the National Center for Health Workforce Analysis, as
    in effect on the date before the date of enactment of this Act, shall be
    transferred to the National Center for Health Care Workforce Analysis
    established under section 761 of the Public Health Service Act, as
    amended by subsection (a).

    (c) Use of Longitudinal Evaluations.--Section 791(a)(1) of the
    Public Health Service Act (42 U.S.C. 295j(a)(1)) is amended--
    (1) in subparagraph (A), by striking ``or'' at the end;
    (2) in subparagraph (B), by striking the period and
    inserting ``; or''; and
    (3) by adding at the end the following:
    ``(C) utilizes a longitudinal evaluation (as
    described in section 761(d)(2)) and reports data from
    such system to the national workforce database (as
    established under section 761(b)(2)(E)).''.

    (d) Performance Measures; Guidelines for Longitudinal Evaluations.--
    (1) Advisory <> committee on training in
    primary care medicine and dentistry.--Section 748(d) of the
    Public Health Service Act is amended--
    (A) in paragraph (1), by striking ``and'' at the
    end;
    (B) in paragraph (2), by striking the period and
    inserting a semicolon; and
    (C) by adding at the end the following:
    ``(3) develop, publish, and implement performance measures
    for programs under this part;
    ``(4) develop and publish guidelines for longitudinal
    evaluations (as described in section 761(d)(2)) for programs
    under this part; and
    ``(5) recommend appropriation levels for programs under this
    part.''.

    [[Page 606]]

    (2) Advisory committee on interdisciplinary, community-based
    linkages.--Section 756(d) of the Public Health Service
    Act <> is amended--
    (A) in paragraph (1), by striking ``and'' at the
    end;
    (B) in paragraph (2), by striking the period and
    inserting a semicolon; and
    (C) by adding at the end the following:
    ``(3) develop, publish, and implement performance measures
    for programs under this part;
    ``(4) develop and publish guidelines for longitudinal
    evaluations (as described in section 761(d)(2)) for programs
    under this part; and
    ``(5) recommend appropriation levels for programs under this
    part.''.
    (3) Advisory council on graduate medical education.--Section
    762(a) of the Public Health Service Act (42 U.S.C. 294o(a)) is
    amended--
    (A) in paragraph (1), by striking ``and'' at the
    end;
    (B) in paragraph (2), by striking the period and
    inserting a semicolon; and
    (C) by adding at the end the following:
    ``(3) develop, publish, and implement performance measures
    for programs under this title, except for programs under part C
    or D;
    ``(4) develop and publish guidelines for longitudinal
    evaluations (as described in section 761(d)(2)) for programs
    under this title, except for programs under part C or D; and
    ``(5) recommend appropriation levels for programs under this
    title, except for programs under part C or D.''.

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

    SEC. 5201. FEDERALLY SUPPORTED STUDENT LOAN FUNDS.

    (a) Medical Schools and Primary Health Care.--Section 723 of the
    Public Health Service Act (42 U.S.C. 292s) is amended--
    (1) in subsection (a)--
    (A) in paragraph (1), by striking subparagraph (B)
    and inserting the following:
    ``(B) to practice in such care for 10 years
    (including residency training in primary health care) or
    through the date on which the loan is repaid in full,
    whichever occurs first.''; and
    (B) by striking paragraph (3) and inserting the
    following:
    ``(3) Noncompliance by student.--Each agreement entered into
    with a student pursuant to paragraph (1) shall provide that, if
    the student fails to comply with such agreement, the loan
    involved will begin to accrue interest at a rate of 2 percent
    per year greater than the rate at which the student would pay if
    compliant in such year.''; and
    (2) by adding at the end the following:

    ``(d) Sense of Congress.--It is the sense of Congress that funds
    repaid under the loan program under this section should not be
    transferred to the Treasury of the United States or otherwise used for
    any other purpose other than to carry out this section.''.

    [[Page 607]]

    (b) Student <> Loan Guidelines.--The
    Secretary of Health and Human Services shall not require parental
    financial information for an independent student to determine financial
    need under section 723 of the Public Health Service Act (42 U.S.C. 292s)
    and the determination of need for such information shall be at the
    discretion of applicable school loan officer. The Secretary shall amend
    guidelines issued by the Health Resources and Services Administration in
    accordance with the preceding sentence.

    SEC. 5202. NURSING STUDENT LOAN PROGRAM.

    (a) Loan Agreements.--Section 836(a) of the Public Health Service
    Act (42 U.S.C. 297b(a)) is amended--
    (1) by striking ``$2,500'' and inserting ``$3,300'';
    (2) by striking ``$4,000'' and inserting ``$5,200''; and
    (3) by striking ``$13,000'' and all that follows through the
    period and inserting ``$17,000 in the case of any student during
    fiscal years 2010 and 2011. After fiscal year 2011, such amounts
    shall be adjusted to provide for a cost-of-attendance increase
    for the yearly loan rate and the aggregate of the loans.''.

    (b) Loan Provisions.--Section 836(b) of the Public Health Service
    Act (42 U.S.C. 297b(b)) is amended--
    (1) in paragraph (1)(C), by striking ``1986'' and inserting
    ``2000''; and
    (2) in paragraph (3), by striking ``the date of enactment of
    the Nurse Training Amendments of 1979'' and inserting
    ``September 29, 1995''.

    SEC. 5203. HEALTH CARE WORKFORCE LOAN REPAYMENT PROGRAMS.

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

    ``Subpart 3--Recruitment and Retention Programs

    ``SEC. 775. INVESTMENT <> IN TOMORROW'S PEDIATRIC
    HEALTH CARE WORKFORCE.

    ``(a) Establishment.--The Secretary shall establish and carry out a
    pediatric specialty loan repayment program under which the eligible
    individual agrees to be employed full-time for a specified period (which
    shall not be less than 2 years) in providing pediatric medical
    subspecialty, pediatric surgical specialty, or child and adolescent
    mental and behavioral health care, including substance abuse prevention
    and treatment services.
    ``(b) Program Administration.--Through <> the
    program established under this section, the Secretary shall enter into
    contracts with qualified health professionals under which--
    ``(1) such qualified health professionals will agree to
    provide pediatric medical subspecialty, pediatric surgical
    specialty, or child and adolescent mental and behavioral health
    care in an area with a shortage of the specified pediatric
    subspecialty that has a sufficient pediatric population to
    support such pediatric subspecialty, as determined by the
    Secretary; and
    ``(2) the Secretary agrees to make payments on the principal
    and interest of undergraduate, graduate, or graduate medical
    education loans of professionals described in paragraph (1) of
    not more than $35,000 a year for each year of agreed upon
    service under such paragraph for a period of not more than 3
    years during the qualified health professional's--

    [[Page 608]]

    ``(A) participation in an accredited pediatric
    medical subspecialty, pediatric surgical specialty, or
    child and adolescent mental health subspecialty
    residency or fellowship; or
    ``(B) employment as a pediatric medical
    subspecialist, pediatric surgical specialist, or child
    and adolescent mental health professional serving an
    area or population described in such paragraph.

    ``(c) In General.--
    ``(1) Eligible <> individuals.--
    ``(A) Pediatric medical specialists and pediatric
    surgical specialists.--For purposes of contracts with
    respect to pediatric medical specialists and pediatric
    surgical specialists, the term `qualified health
    professional' means a licensed physician who--
    ``(i) is entering or receiving training in an
    accredited pediatric medical subspecialty or
    pediatric surgical specialty residency or
    fellowship; or
    ``(ii) has completed (but not prior to the end
    of the calendar year in which this section is
    enacted) the training described in subparagraph
    (B).
    ``(B) Child and adolescent mental and behavioral
    health.--For purposes of contracts with respect to child
    and adolescent mental and behavioral health care, the
    term `qualified health professional' means a health care
    professional who--
    ``(i) has received specialized training or
    clinical experience in child and adolescent mental
    health in psychiatry, psychology, school
    psychology, behavioral pediatrics, psychiatric
    nursing, social work, school social work,
    substance abuse disorder prevention and treatment,
    marriage and family therapy, school counseling, or
    professional counseling;
    ``(ii) has a license or certification in a
    State to practice allopathic medicine, osteopathic
    medicine, psychology, school psychology,
    psychiatric nursing, social work, school social
    work, marriage and family therapy, school
    counseling, or professional counseling; or
    ``(iii) is a mental health service
    professional who completed (but not before the end
    of the calendar year in which this section is
    enacted) specialized training or clinical
    experience in child and adolescent mental health
    described in clause (i).
    ``(2) Additional eligibility requirements.--The Secretary
    may not enter into a contract under this subsection with an
    eligible individual unless--
    ``(A) the individual agrees to work in, or for a
    provider serving, a health professional shortage area or
    medically underserved area, or to serve a medically
    underserved population;
    ``(B) the individual is a United States citizen or a
    permanent legal United States resident; and
    ``(C) if the individual is enrolled in a graduate
    program, the program is accredited, and the individual
    has an acceptable level of academic standing (as
    determined by the Secretary).

    [[Page 609]]

    ``(d) Priority.--In entering into contracts under this subsection,
    the Secretary shall give priority to applicants who--
    ``(1) are or will be working in a school or other pre-
    kindergarten, elementary, or secondary education setting;
    ``(2) have familiarity with evidence-based methods and
    cultural and linguistic competence health care services; and
    ``(3) demonstrate financial need.

    ``(e) Authorization of Appropriations.--There is authorized to be
    appropriated $30,000,000 for each of fiscal years 2010 through 2014 to
    carry out subsection (c)(1)(A) and $20,000,000 for each of fiscal years
    2010 through 2013 to carry out subsection (c)(1)(B).''.

    SEC. 5204. PUBLIC HEALTH WORKFORCE RECRUITMENT AND RETENTION PROGRAMS.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 294n
    et seq.), as amended by section 5203, is further amended by adding at
    the end the following:

    ``SEC. 776. PUBLIC <> HEALTH WORKFORCE LOAN
    REPAYMENT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish the Public
    Health Workforce Loan Repayment Program (referred to in this section as
    the `Program') to assure an adequate supply of public health
    professionals to eliminate critical public health workforce shortages in
    Federal, State, local, and tribal public health agencies.
    ``(b) Eligibility.--To be eligible to participate in the Program, an
    individual shall--
    ``(1)(A) be accepted for enrollment, or be enrolled, as a
    student in an accredited academic educational institution in a
    State or territory in the final year of a course of study or
    program leading to a public health or health professions degree
    or certificate; and have accepted employment with a Federal,
    State, local, or tribal public health agency, or a related
    training fellowship, as recognized by the Secretary, to commence
    upon graduation;
    ``(B)(i) have graduated, during the preceding 10-year
    period, from an accredited educational institution in a State or
    territory and received a public health or health professions
    degree or certificate; and
    ``(ii) be employed by, or have accepted employment with, a
    Federal, State, local, or tribal public health agency or a
    related training fellowship, as recognized by the Secretary;
    ``(2) be a United States citizen; and
    ``(3)(A) submit an application to the Secretary to
    participate in the Program;
    ``(B) execute a written contract as required in subsection
    (c); and
    ``(4) not have received, for the same service, a reduction
    of loan obligations under section 455(m), 428J, 428K, 428L, or
    460 of the Higher Education Act of 1965.

    ``(c) Contract.--The written contract (referred to in this section
    as the `written contract') between the Secretary and an individual shall
    contain--
    ``(1) an agreement on the part of the Secretary that the
    Secretary will repay on behalf of the individual loans incurred
    by the individual in the pursuit of the relevant degree or
    certificate in accordance with the terms of the contract;
    ``(2) an agreement on the part of the individual that the
    individual will serve in the full-time employment of a Federal,

    [[Page 610]]

    State, local, or tribal public health agency or a related
    fellowship program in a position related to the course of study
    or program for which the contract was awarded for a period of
    time (referred to in this section as the `period of obligated
    service') equal to the greater of--
    ``(A) 3 years; or
    ``(B) such longer period of time as determined
    appropriate by the Secretary and the individual;
    ``(3) an agreement, as appropriate, on the part of the
    individual to relocate to a priority service area (as determined
    by the Secretary) in exchange for an additional loan repayment
    incentive amount to be determined by the Secretary;
    ``(4) a provision that any financial obligation of the
    United States arising out of a contract entered into under this
    section and any obligation of the individual that is conditioned
    thereon, is contingent on funds being appropriated for loan
    repayments under this section;
    ``(5) a statement of the damages to which the United States
    is entitled, under this section for the individual's breach of
    the contract; and
    ``(6) such other statements of the rights and liabilities of
    the Secretary and of the individual, not inconsistent with this
    section.

    ``(d) Payments.--
    ``(1) In general.--A loan repayment provided for an
    individual under a written contract under the Program shall
    consist of payment, in accordance with paragraph (2), on behalf
    of the individual of the principal, interest, and related
    expenses on government and commercial loans received by the
    individual regarding the undergraduate or graduate education of
    the individual (or both), which loans were made for tuition
    expenses incurred by the individual.
    ``(2) Payments for years served.--For each year of obligated
    service that an individual contracts to serve under subsection
    (c) the Secretary may pay up to $35,000 on behalf of the
    individual for loans described in paragraph (1). With respect to
    participants under the Program whose total eligible loans are
    less than $105,000, the Secretary shall pay an amount that does
    not exceed \1/3\ of the eligible loan balance for each year of
    obligated service of the individual.
    ``(3) Tax liability.--For the purpose of providing
    reimbursements for tax liability resulting from payments under
    paragraph (2) on behalf of an individual, the Secretary shall,
    in addition to such payments, make payments to the individual in
    an amount not to exceed 39 percent of the total amount of loan
    repayments made for the taxable year involved.

    ``(e) Postponing Obligated Service.--With respect to an individual
    receiving a degree or certificate from a health professions or other
    related school, the date of the initiation of the period of obligated
    service may be postponed as approved by the Secretary.
    ``(f) Breach of Contract.--An <> individual who
    fails to comply with the contract entered into under subsection (c)
    shall be subject to the same financial penalties as provided for under
    section 338E for breaches of loan repayment contracts under section
    338B.

    ``(g) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $195,000,000 for fiscal

    [[Page 611]]

    year 2010, and such sums as may be necessary for each of fiscal years
    2011 through 2015.''.

    SEC. 5205. ALLIED HEALTH WORKFORCE RECRUITMENT AND RETENTION PROGRAMS.

    (a) Purpose.--The <> purpose of this
    section is to assure an adequate supply of allied health professionals
    to eliminate critical allied health workforce shortages in Federal,
    State, local, and tribal public health agencies or in settings where
    patients might require health care services, including acute care
    facilities, ambulatory care facilities, personal residences and other
    settings, as recognized by the Secretary of Health and Human Services by
    authorizing an Allied Health Loan Forgiveness Program.

    (b) Allied Health Workforce Recruitment and Retention Program.--
    Section 428K of the Higher Education Act of 1965 (20 U.S.C. 1078-11) is
    amended--
    (1) in subsection (b), by adding at the end the following:
    ``(18) Allied health professionals.--The individual is
    employed full-time as an allied health professional--
    ``(A) in a Federal, State, local, or tribal public
    health agency; or
    ``(B) in a setting where patients might require
    health care services, including acute care facilities,
    ambulatory care facilities, personal residences and
    other settings located in health professional shortage
    areas, medically underserved areas, or medically
    underserved populations, as recognized by the Secretary
    of Health and Human Services.''; and
    (2) in subsection (g)--
    (A) by redesignating paragraphs (1) through (9) as
    paragraphs (2) through (10), respectively; and
    (B) by inserting before paragraph (2) (as
    redesignated by subparagraph (A)) the following:
    ``(1) Allied <> health professional.--The
    term `allied health professional' means an allied health
    professional as defined in section 799B(5) of the Public Heath
    Service Act (42 U.S.C. 295p(5)) who--
    ``(A) has graduated and received an allied health
    professions degree or certificate from an institution of
    higher education; and
    ``(B) is employed with a Federal, State, local or
    tribal public health agency, or in a setting where
    patients might require health care services, including
    acute care facilities, ambulatory care facilities,
    personal residences and other settings located in health
    professional shortage areas, medically underserved
    areas, or medically underserved populations, as
    recognized by the Secretary of Health and Human
    Services.''.

    SEC. 5206. GRANTS FOR STATE AND LOCAL PROGRAMS.

    (a) In General.--Section 765(d) of the Public Health Service Act (42
    U.S.C. 295(d)) is amended--
    (1) in paragraph (7), by striking ``; or'' and inserting a
    semicolon;
    (2) by redesignating paragraph (8) as paragraph (9); and
    (3) by inserting after paragraph (7) the following:
    ``(8) public health workforce loan repayment programs; or''.

    [[Page 612]]

    (b) Training for Mid-career Public Health Professionals.--Part E of
    title VII of the Public Health Service Act (42 U.S.C. 294n et seq.), as
    amended by section 5204, is further amended by adding at the end the
    following:

    ``SEC. 777. TRAINING <> FOR MID-CAREER PUBLIC AND
    ALLIED HEALTH PROFESSIONALS.

    ``(a) In General.--The Secretary may make grants to, or enter into
    contracts with, any eligible entity to award scholarships to eligible
    individuals to enroll in degree or professional training programs for
    the purpose of enabling mid-career professionals in the public health
    and allied health workforce to receive additional training in the field
    of public health and allied health.
    ``(b) <>  Eligibility.--
    ``(1) Eligible entity.--The term `eligible entity' indicates
    an accredited educational institution that offers a course of
    study, certificate program, or professional training program in
    public or allied health or a related discipline, as determined
    by the Secretary
    ``(2) Eligible individuals.--The term `eligible individuals'
    includes those individuals employed in public and allied health
    positions at the Federal, State, tribal, or local level who are
    interested in retaining or upgrading their education.

    ``(c) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section, $60,000,000 for fiscal year 2010
    and such sums as may be necessary for each of fiscal years 2011 through
    2015. Fifty percent of appropriated funds shall be allotted to public
    health mid-career professionals and 50 percent shall be allotted to
    allied health mid-career professionals.''.

    SEC. 5207. FUNDING FOR NATIONAL HEALTH SERVICE CORPS.

    Section 338H(a) of the Public Health Service Act (42 U.S.C. 254q(a))
    is amended to read as follows:
    ``(a) Authorization of Appropriations.--For the purpose of carrying
    out this section, there is authorized to be appropriated, out of any
    funds in the Treasury not otherwise appropriated, the following:
    ``(1) For fiscal year 2010, $320,461,632.
    ``(2) For fiscal year 2011, $414,095,394.
    ``(3) For fiscal year 2012, $535,087,442.
    ``(4) For fiscal year 2013, $691,431,432.
    ``(5) For fiscal year 2014, $893,456,433.
    ``(6) For fiscal year 2015, $1,154,510,336.
    ``(7) For fiscal year 2016, and each subsequent fiscal year,
    the amount appropriated for the preceding fiscal year adjusted
    by the product of--
    ``(A) one plus the average percentage increase in
    the costs of health professions education during the
    prior fiscal year; and
    ``(B) one plus the average percentage change in the
    number of individuals residing in health professions
    shortage areas designated under section 333 during the
    prior fiscal year, relative to the number of individuals
    residing in such areas during the previous fiscal
    year.''.

    SEC. 5208. NURSE-MANAGED HEALTH CLINICS.

    (a) Purpose.--The <> purpose of this
    section is to fund the development and operation of nurse-managed health
    clinics.

    [[Page 613]]

    (b) Grants.--Subpart 1 of part D of title III of the Public Health
    Service Act (42 U.S.C. 254b et seq.) is amended by inserting after
    section 330A the following:

    ``SEC. 330A-1. <> GRANTS TO NURSE-MANAGED HEALTH
    CLINICS.

    ``(a) Definitions.--
    ``(1) Comprehensive primary health care services.--In this
    section, the term `comprehensive primary health care services'
    means the primary health services described in section
    330(b)(1).
    ``(2) Nurse-managed health clinic.--The term `nurse-managed
    health clinic' means a nurse-practice arrangement, managed by
    advanced practice nurses, that provides primary care or wellness
    services to underserved or vulnerable populations and that is
    associated with a school, college, university or department of
    nursing, federally qualified health center, or independent
    nonprofit health or social services agency.

    ``(b) Authority to Award Grants.--The Secretary shall award grants
    for the cost of the operation of nurse-managed health clinics that meet
    the requirements of this section.
    ``(c) Applications.--To be eligible to receive a grant under this
    section, an entity shall--
    ``(1) be an NMHC; and
    ``(2) submit to the Secretary an application at such time,
    in such manner, and containing--
    ``(A) assurances that nurses are the major providers
    of services at the NMHC and that at least 1 advanced
    practice nurse holds an executive management position
    within the organizational structure of the NMHC;
    ``(B) an assurance that the NMHC will continue
    providing comprehensive primary health care services or
    wellness services without regard to income or insurance
    status of the patient for the duration of the grant
    period; and
    ``(C) an assurance that, not later than 90 days of
    receiving a grant under this section, the NMHC will
    establish a community advisory committee, for which a
    majority of the members shall be individuals who are
    served by the NMHC.

    ``(d) Grant Amount.--The <> amount of any
    grant made under this section for any fiscal year shall be determined by
    the Secretary, taking into account--
    ``(1) the financial need of the NMHC, considering State,
    local, and other operational funding provided to the NMHC; and
    ``(2) other factors, as the Secretary determines
    appropriate.

    ``(e) Authorization of Appropriations.--For the purposes of carrying
    out this section, there are authorized to be appropriated $50,000,000
    for the fiscal year 2010 and such sums as may be necessary for each of
    the fiscal years 2011 through 2014.''.

    SEC. 5209. <> ELIMINATION OF CAP ON
    COMMISSIONED CORPS.

    Section 202 of the Department of Health and Human Services
    Appropriations Act, 1993 (Public Law 102-394) is amended by striking
    ``not to exceed 2,800''.

    [[Page 614]]

    SEC. 5210. ESTABLISHING A READY RESERVE CORPS.

    Section 203 of the Public Health Service Act (42 U.S.C. 204) is
    amended to read as follows:

    ``SEC. 203. COMMISSIONED CORPS AND READY RESERVE CORPS.

    ``(a) Establishment.--
    ``(1) In general.--There shall be in the Service a
    commissioned Regular Corps and a Ready Reserve Corps for service
    in time of national emergency.
    ``(2) Requirement.--All commissioned officers shall be
    citizens of the United States and shall be appointed without
    regard to the civil-service laws and compensated without regard
    to the Classification Act of 1923, as amended.
    ``(3) Appointment.--
    Commissioned <> officers of the Ready Reserve
    Corps shall be appointed by the President and commissioned
    officers of the Regular Corps shall be appointed by the
    President with the advice and consent of the Senate.
    ``(4) Active duty.--Commissioned officers of the Ready
    Reserve Corps shall at all times be subject to call to active
    duty by the Surgeon General, including active duty for the
    purpose of training.
    ``(5) Warrant officers.--Warrant officers may be appointed
    to the Service for the purpose of providing support to the
    health and delivery systems maintained by the Service and any
    warrant officer appointed to the Service shall be considered for
    purposes of this Act and title 37, United States Code, to be a
    commissioned officer within the Commissioned Corps of the
    Service.

    ``(b) Assimilating Reserve Corp Officers Into the Regular Corps.--
    Effective <> on the date of enactment of the
    Patient Protection and Affordable Care Act, all individuals classified
    as officers in the Reserve Corps under this section (as such section
    existed on the day before the date of enactment of such Act) and serving
    on active duty shall be deemed to be commissioned officers of the
    Regular Corps.

    ``(c) Purpose and Use of Ready Research.--
    ``(1) Purpose.--The purpose of the Ready Reserve Corps is to
    fulfill the need to have additional Commissioned Corps personnel
    available on short notice (similar to the uniformed service's
    reserve program) to assist regular Commissioned Corps personnel
    to meet both routine public health and emergency response
    missions.
    ``(2) Uses.--The Ready Reserve Corps shall--
    ``(A) participate in routine training to meet the
    general and specific needs of the Commissioned Corps;
    ``(B) be available and ready for involuntary calls
    to active duty during national emergencies and public
    health crises, similar to the uniformed service reserve
    personnel;
    ``(C) be available for backfilling critical
    positions left vacant during deployment of active duty
    Commissioned Corps members, as well as for deployment to
    respond to public health emergencies, both foreign and
    domestic; and
    ``(D) be available for service assignment in
    isolated, hardship, and medically underserved
    communities (as defined in section 799B) to improve
    access to health services.

    [[Page 615]]

    ``(d) Funding.--For the purpose of carrying out the duties and
    responsibilities of the Commissioned Corps under this section, there are
    authorized to be appropriated $5,000,000 for each of fiscal years 2010
    through 2014 for recruitment and training and $12,500,000 for each of
    fiscal years 2010 through 2014 for the Ready Reserve Corps.''.

    Subtitle D--Enhancing Health Care Workforce Education and Training

    SEC. 5301. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE,
    GENERAL PEDIATRICS, AND PHYSICIAN ASSISTANTSHIP.

    Part C of title VII (42 U.S.C. 293k et seq.) is amended by striking
    section 747 and inserting the following:

    ``SEC. 747. <> PRIMARY CARE TRAINING AND
    ENHANCEMENT.

    ``(a) Support and Development of Primary Care Training Programs.--
    ``(1) In general.--The Secretary may make grants to, or
    enter into contracts with, an accredited public or nonprofit
    private hospital, school of medicine or osteopathic medicine,
    academically affiliated physician assistant training program, or
    a public or private nonprofit entity which the Secretary has
    determined is capable of carrying out such grant or contract--
    ``(A) to plan, develop, operate, or participate in
    an accredited professional training program, including
    an accredited residency or internship program in the
    field of family medicine, general internal medicine, or
    general pediatrics for medical students, interns,
    residents, or practicing physicians as defined by the
    Secretary;
    ``(B) to provide need-based financial assistance in
    the form of traineeships and fellowships to medical
    students, interns, residents, practicing physicians, or
    other medical personnel, who are participants in any
    such program, and who plan to specialize or work in the
    practice of the fields defined in subparagraph (A);
    ``(C) to plan, develop, and operate a program for
    the training of physicians who plan to teach in family
    medicine, general internal medicine, or general
    pediatrics training programs;
    ``(D) to plan, develop, and operate a program for
    the training of physicians teaching in community-based
    settings;
    ``(E) to provide financial assistance in the form of
    traineeships and fellowships to physicians who are
    participants in any such programs and who plan to teach
    or conduct research in a family medicine, general
    internal medicine, or general pediatrics training
    program;
    ``(F) to plan, develop, and operate a physician
    assistant education program, and for the training of
    individuals who will teach in programs to provide such
    training;
    ``(G) to plan, develop, and operate a demonstration
    program that provides training in new competencies, as
    recommended by the Advisory Committee on Training in

    [[Page 616]]

    Primary Care Medicine and Dentistry and the National
    Health Care Workforce Commission established in section
    5101 of the Patient Protection and Affordable Care Act,
    which may include--
    ``(i) providing training to primary care
    physicians relevant to providing care through
    patient-centered medical homes (as defined by the
    Secretary for purposes of this section);
    ``(ii) developing tools and curricula relevant
    to patient-centered medical homes; and
    ``(iii) providing continuing education to
    primary care physicians relevant to patient-
    centered medical homes; and
    ``(H) to plan, develop, and operate joint degree
    programs to provide interdisciplinary and
    interprofessional graduate training in public health and
    other health professions to provide training in
    environmental health, infectious disease control,
    disease prevention and health promotion, epidemiological
    studies and injury control.
    ``(2) Duration of awards.--The period during which payments
    are made to an entity from an award of a grant or contract under
    this subsection shall be 5 years.

    ``(b) Capacity Building in Primary Care.--
    ``(1) In general.--The Secretary may make grants to or enter
    into contracts with accredited schools of medicine or
    osteopathic medicine to establish, maintain, or improve--
    ``(A) academic units or programs that improve
    clinical teaching and research in fields defined in
    subsection (a)(1)(A); or
    ``(B) programs that integrate academic
    administrative units in fields defined in subsection
    (a)(1)(A) to enhance interdisciplinary recruitment,
    training, and faculty development.
    ``(2) Preference in making awards under this subsection.--In
    making awards of grants and contracts under paragraph (1), the
    Secretary shall give preference to any qualified applicant for
    such an award that agrees to expend the award for the purpose
    of--
    ``(A) establishing academic units or programs in
    fields defined in subsection (a)(1)(A); or
    ``(B) substantially expanding such units or
    programs.
    ``(3) Priorities in making awards.--In awarding grants or
    contracts under paragraph (1), the Secretary shall give priority
    to qualified applicants that--
    ``(A) proposes a collaborative project between
    academic administrative units of primary care;
    ``(B) proposes innovative approaches to clinical
    teaching using models of primary care, such as the
    patient centered medical home, team management of
    chronic disease, and interprofessional integrated models
    of health care that incorporate transitions in health
    care settings and integration physical and mental health
    provision;
    ``(C) have a record of training the greatest
    percentage of providers, or that have demonstrated
    significant improvements in the percentage of providers
    trained, who enter and remain in primary care practice;

    [[Page 617]]

    ``(D) have a record of training individuals who are
    from underrepresented minority groups or from a rural or
    disadvantaged background;
    ``(E) provide training in the care of vulnerable
    populations such as children, older adults, homeless
    individuals, victims of abuse or trauma, individuals
    with mental health or substance-related disorders,
    individuals with HIV/AIDS, and individuals with
    disabilities;
    ``(F) establish formal relationships and submit
    joint applications with federally qualified health
    centers, rural health clinics, area health education
    centers, or clinics located in underserved areas or that
    serve underserved populations;
    ``(G) teach trainees the skills to provide
    interprofessional, integrated care through collaboration
    among health professionals;
    ``(H) provide training in enhanced communication
    with patients, evidence-based practice, chronic disease
    management, preventive care, health information
    technology, or other competencies as recommended by the
    Advisory Committee on Training in Primary Care Medicine
    and Dentistry and the National Health Care Workforce
    Commission established in section 5101 of the Patient
    Protection and Affordable Care Act; or
    ``(I) provide training in cultural competency and
    health literacy.
    ``(4) Duration of awards.--The period during which payments
    are made to an entity from an award of a grant or contract under
    this subsection shall be 5 years.

    ``(c) Authorization of Appropriations.--
    ``(1) In general.--For purposes of carrying out this section
    (other than subsection (b)(1)(B)), there are authorized to be
    appropriated $125,000,000 for fiscal year 2010, and such sums as
    may be necessary for each of fiscal years 2011 through 2014.
    ``(2) Training programs.--Fifteen percent of the amount
    appropriated pursuant to paragraph (1) in each such fiscal year
    shall be allocated to the physician assistant training programs
    described in subsection (a)(1)(F), which prepare students for
    practice in primary care.
    ``(3) Integrating academic administrative units.--For
    purposes of carrying out subsection (b)(1)(B), there are
    authorized to be appropriated $750,000 for each of fiscal years
    2010 through 2014.''.

    SEC. 5302. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS.

    Part C of title VII of the Public Health Service Act (42 U.S.C. 293k
    et seq.) is amended by inserting after section 747, as amended by
    section 5301, the following:

    ``SEC. 747A. TRAINING <> OPPORTUNITIES FOR DIRECT
    CARE WORKERS.

    ``(a) In General.--The <> Secretary shall award
    grants to eligible entities to enable such entities to provide new
    training opportunities for direct care workers who are employed in long-
    term care settings such as nursing homes (as defined in section
    1908(e)(1) of the Social Security Act (42 U.S.C. 1396g(e)(1)), assisted
    living facilities

    [[Page 618]]

    and skilled nursing facilities, intermediate care facilities for
    individuals with mental retardation, home and community based settings,
    and any other setting the Secretary determines to be appropriate.

    ``(b) Eligibility.--To be eligible to receive a grant under this
    section, an entity shall--
    ``(1) be an institution of higher education (as defined in
    section 102 of the Higher Education Act of 1965 (20 U.S.C.
    1002)) that--
    ``(A) is accredited by a nationally recognized
    accrediting agency or association listed under section
    101(c) of the Higher Education Act of 1965 (20 U.S.C.
    1001(c)); and
    ``(B) has established a public-private educational
    partnership with a nursing home or skilled nursing
    facility, agency or entity providing home and community
    based services to individuals with disabilities, or
    other long-term care provider; and
    ``(2) submit to the Secretary an application at such time,
    in such manner, and containing such information as the Secretary
    may require.

    ``(c) Use of Funds.--An eligible entity shall use amounts awarded
    under a grant under this section to provide assistance to eligible
    individuals to offset the cost of tuition and required fees for
    enrollment in academic programs provided by such entity.
    ``(d) Eligible Individual.--
    ``(1) Eligibility.--To be eligible for assistance under this
    section, an individual shall be enrolled in courses provided by
    a grantee under this subsection and maintain satisfactory
    academic progress in such courses.
    ``(2) Condition of assistance.--As a condition of receiving
    assistance under this section, an individual shall agree that,
    following completion of the assistance period, the individual
    will work in the field of geriatrics, disability services, long
    term services and supports, or chronic care management for a
    minimum of 2 years under guidelines set by the Secretary.

    ``(e) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section, $10,000,000 for the period of
    fiscal years 2011 through 2013.''.

    SEC. 5303. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTRY.

    Part C of Title VII of the Public Health Service Act (42 U.S.C. 293k
    et seq.) is amended by--
    (1) redesignating section 748, <> as
    amended by section 5103 of this Act, as section 749; and
    (2) inserting after section 747A, as added by section 5302,
    the following:

    ``SEC. 748. <> TRAINING IN GENERAL, PEDIATRIC, AND
    PUBLIC HEALTH DENTISTRY.

    ``(a) Support and Development of Dental Training Programs.--
    ``(1) In general.--The Secretary may make grants to, or
    enter into contracts with, a school of dentistry, public or
    nonprofit private hospital, or a public or private nonprofit
    entity which the Secretary has determined is capable of carrying
    out such grant or contract--
    ``(A) to plan, develop, and operate, or participate
    in, an approved professional training program in the
    field

    [[Page 619]]

    of general dentistry, pediatric dentistry, or public
    health dentistry for dental students, residents,
    practicing dentists, dental hygienists, or other
    approved primary care dental trainees, that emphasizes
    training for general, pediatric, or public health
    dentistry;
    ``(B) to provide financial assistance to dental
    students, residents, practicing dentists, and dental
    hygiene students who are in need thereof, who are
    participants in any such program, and who plan to work
    in the practice of general, pediatric, public heath
    dentistry, or dental hygiene;
    ``(C) to plan, develop, and operate a program for
    the training of oral health care providers who plan to
    teach in general, pediatric, public health dentistry, or
    dental hygiene;
    ``(D) to provide financial assistance in the form of
    traineeships and fellowships to dentists who plan to
    teach or are teaching in general, pediatric, or public
    health dentistry;
    ``(E) to meet the costs of projects to establish,
    maintain, or improve dental faculty development programs
    in primary care (which may be departments, divisions or
    other units);
    ``(F) to meet the costs of projects to establish,
    maintain, or improve predoctoral and postdoctoral
    training in primary care programs;
    ``(G) to create a loan repayment program for faculty
    in dental programs; and
    ``(H) to provide technical assistance to pediatric
    training programs in developing and implementing
    instruction regarding the oral health status, dental
    care needs, and risk-based clinical disease management
    of all pediatric populations with an emphasis on
    underserved children.
    ``(2) Faculty loan repayment.--
    ``(A) In general.--A grant or contract under
    subsection (a)(1)(G) may be awarded to a program of
    general, pediatric, or public health dentistry described
    in such subsection to plan, develop, and operate a loan
    repayment program under which--
    ``(i) individuals agree to serve full-time as
    faculty members; and
    ``(ii) the program of general, pediatric or
    public health dentistry agrees to pay the
    principal and interest on the outstanding student
    loans of the individuals.
    ``(B) Manner of payments.--With respect to the
    payments described in subparagraph (A)(ii), upon
    completion by an individual of each of the first,
    second, third, fourth, and fifth years of service, the
    program shall pay an amount equal to 10, 15, 20, 25, and
    30 percent, respectively, of the individual's student
    loan balance as calculated based on principal and
    interest owed at the initiation of the agreement.

    ``(b) Eligible Entity.--For purposes of this subsection, entities
    eligible for such grants or contracts in general, pediatric, or public
    health dentistry shall include entities that have programs in dental or
    dental hygiene schools, or approved residency or advanced education
    programs in the practice of general, pediatric, or public health
    dentistry. Eligible entities may partner with schools of public

    [[Page 620]]

    health to permit the education of dental students, residents, and dental
    hygiene students for a master's year in public health at a school of
    public health.
    ``(c) Priorities in Making Awards.--With respect to training
    provided for under this section, the Secretary shall give priority in
    awarding grants or contracts to the following:
    ``(1) Qualified applicants that propose collaborative
    projects between departments of primary care medicine and
    departments of general, pediatric, or public health dentistry.
    ``(2) Qualified applicants that have a record of training
    the greatest percentage of providers, or that have demonstrated
    significant improvements in the percentage of providers, who
    enter and remain in general, pediatric, or public health
    dentistry.
    ``(3) Qualified applicants that have a record of training
    individuals who are from a rural or disadvantaged background, or
    from underrepresented minorities.
    ``(4) Qualified applicants that establish formal
    relationships with Federally qualified health centers, rural
    health centers, or accredited teaching facilities and that
    conduct training of students, residents, fellows, or faculty at
    the center or facility.
    ``(5) Qualified applicants that conduct teaching programs
    targeting vulnerable populations such as older adults, homeless
    individuals, victims of abuse or trauma, individuals with mental
    health or substance-related disorders, individuals with
    disabilities, and individuals with HIV/AIDS, and in the risk-
    based clinical disease management of all populations.
    ``(6) Qualified applicants that include educational
    activities in cultural competency and health literacy.
    ``(7) Qualified applicants that have a high rate for placing
    graduates in practice settings that serve underserved areas or
    health disparity populations, or who achieve a significant
    increase in the rate of placing graduates in such settings.
    ``(8) Qualified applicants that intend to establish a
    special populations oral health care education center or
    training program for the didactic and clinical education of
    dentists, dental health professionals, and dental hygienists who
    plan to teach oral health care for people with developmental
    disabilities, cognitive impairment, complex medical problems,
    significant physical limitations, and vulnerable elderly.

    ``(d) Application.--An eligible entity desiring a grant under this
    section shall submit to the Secretary an application at such time, in
    such manner, and containing such information as the Secretary may
    require.
    ``(e) Duration of Award.--The period during which payments are made
    to an entity from an award of a grant or contract under subsection (a)
    shall be 5 years. The provision of such payments shall be subject to
    annual approval by the Secretary and subject to the availability of
    appropriations for the fiscal year involved to make the payments.
    ``(f) Authorizations of Appropriations.--For the purpose of carrying
    out subsections (a) and (b), there is authorized to be appropriated
    $30,000,000 for fiscal year 2010 and such sums as may be necessary for
    each of fiscal years 2011 through 2015.
    ``(g) Carryover Funds.--An entity that receives an award under this
    section may carry over funds from 1 fiscal year to another without
    obtaining approval from the Secretary. In no case

    [[Page 621]]

    may any funds be carried over pursuant to the preceding sentence for
    more than 3 years.''.

    SEC. 5304. ALTERNATIVE DENTAL HEALTH CARE PROVIDERS DEMONSTRATION
    PROJECT.

    Subpart X of part D of title III of the Public Health Service Act
    (42 U.S.C. 256f et seq.) is amended by adding at the end the following:

    ``SEC. 340G-1. <> DEMONSTRATION PROGRAM.

    ``(a) In General. <> --
    ``(1) Authorization.--The Secretary is authorized to award
    grants to 15 eligible entities to enable such entities to
    establish a demonstration program to establish training programs
    to train, or to employ, alternative dental health care providers
    in order to increase access to dental health care services in
    rural and other underserved communities.
    ``(2) Definition.--The term `alternative dental health care
    providers' includes community dental health coordinators,
    advance practice dental hygienists, independent dental
    hygienists, supervised dental hygienists, primary care
    physicians, dental therapists, dental health aides, and any
    other health professional that the Secretary determines
    appropriate.

    ``(b) Timeframe.--The demonstration projects funded under this
    section shall begin not later than 2 years after the date of enactment
    of this section, and shall conclude not later than 7 years after such
    date of enactment.
    ``(c) Eligible Entities.--To be eligible to receive a grant under
    subsection (a), an entity shall--
    ``(1) be--
    ``(A) an institution of higher education, including
    a community college;
    ``(B) a public-private partnership;
    ``(C) a federally qualified health center;
    ``(D) an Indian Health Service facility or a tribe
    or tribal organization (as such terms are defined in
    section 4 of the Indian Self-Determination and Education
    Assistance Act);
    ``(E) a State or county public health clinic, a
    health facility operated by an Indian tribe or tribal
    organization, or urban Indian organization providing
    dental services; or
    ``(F) a public hospital or health system;
    ``(2) be within a program accredited by the Commission on
    Dental Accreditation or within a dental education program in an
    accredited institution; and
    ``(3) shall submit an application to the Secretary at such
    time, in such manner, and containing such information as the
    Secretary may require.

    ``(d) Administrative Provisions.--
    ``(1) Amount of grant.--Each grant under this section shall
    be in an amount that is not less than $4,000,000 for the 5-year
    period during which the demonstration project being conducted.
    ``(2) Disbursement of funds.--
    ``(A) Preliminary disbursements. <> --Beginning 1 year after the enactment of this
    section, the Secretary may disperse to any entity
    receiving a grant under this section

    [[Page 622]]

    not more than 20 percent of the total funding awarded to
    such entity under such grant, for the purpose of
    enabling the entity to plan the demonstration project to
    be conducted under such grant.
    ``(B) Subsequent disbursements.--The remaining
    amount of grant funds not dispersed under subparagraph
    (A) shall be dispersed such that not less than 15
    percent of such remaining amount is dispersed each
    subsequent year.

    ``(e) Compliance With State Requirements.--Each entity receiving a
    grant under this section shall certify that it is in compliance with all
    applicable State licensing requirements.
    ``(f) <> Evaluation.--The Secretary shall contract
    with the Director of the Institute of Medicine to conduct a study of the
    demonstration programs conducted under this section that shall provide
    analysis, based upon quantitative and qualitative data, regarding access
    to dental health care in the United States.

    ``(g) Clarification Regarding Dental Health Aide Program.--Nothing
    in this section shall prohibit a dental health aide training program
    approved by the Indian Health Service from being eligible for a grant
    under this section.
    ``(h) Authorization of Appropriations.--There is authorized to be
    appropriated such sums as may be necessary to carry out this section.''.

    SEC. 5305. GERIATRIC EDUCATION AND TRAINING; CAREER AWARDS;
    COMPREHENSIVE GERIATRIC EDUCATION.

    (a) Workforce Development; Career Awards.--Section 753 of the Public
    Health Service Act (42 U.S.C. 294c) is amended by adding at the end the
    following:
    ``(d) Geriatric Workforce Development.--
    ``(1) In general. <> --The
    Secretary shall award grants or contracts under this subsection
    to entities that operate a geriatric education center pursuant
    to subsection (a)(1).
    ``(2) Application.--To be eligible for an award under
    paragraph (1), an entity described in such paragraph shall
    submit to the Secretary an application at such time, in such
    manner, and containing such information as the Secretary may
    require.
    ``(3) Use of funds.--Amounts awarded under a grant or
    contract under paragraph (1) shall be used to--
    ``(A) carry out the fellowship program described in
    paragraph (4); and
    ``(B) carry out 1 of the 2 activities described in
    paragraph (5).
    ``(4) Fellowship program.--
    ``(A) In general.--Pursuant to paragraph (3), a
    geriatric education center that receives an award under
    this subsection shall use such funds to offer short-term
    intensive courses (referred to in this subsection as a
    `fellowship') that focus on geriatrics, chronic care
    management, and long-term care that provide supplemental
    training for faculty members in medical schools and
    other health professions schools with programs in
    psychology, pharmacy, nursing, social work, dentistry,
    public health, allied health, or other health
    disciplines, as approved by the Secretary. Such a
    fellowship shall be open to current faculty, and

    [[Page 623]]

    appropriately credentialed volunteer faculty and
    practitioners, who do not have formal training in
    geriatrics, to upgrade their knowledge and clinical
    skills for the care of older adults and adults with
    functional limitations and to enhance their
    interdisciplinary teaching skills.
    ``(B) Location.--A fellowship shall be offered
    either at the geriatric education center that is
    sponsoring the course, in collaboration with other
    geriatric education centers, or at medical schools,
    schools of dentistry, schools of nursing, schools of
    pharmacy, schools of social work, graduate programs in
    psychology, or allied health and other health
    professions schools approved by the Secretary with which
    the geriatric education centers are affiliated.
    ``(C) CME credit.--Participation in a fellowship
    under this paragraph shall be accepted with respect to
    complying with continuing health profession education
    requirements. As a condition of such acceptance, the
    recipient shall agree to subsequently provide a minimum
    of 18 hours of voluntary instructional support through a
    geriatric education center that is providing clinical
    training to students or trainees in long-term care
    settings.
    ``(5) Additional required activities described.--Pursuant to
    paragraph (3), a geriatric education center that receives an
    award under this subsection shall use such funds to carry out 1
    of the following 2 activities.
    ``(A) Family caregiver and direct care provider
    training.--A geriatric education center that receives an
    award under this subsection shall offer at least 2
    courses each year, at no charge or nominal cost, to
    family caregivers and direct care providers that are
    designed to provide practical training for supporting
    frail elders and individuals with
    disabilities. <> The Secretary
    shall require such Centers to work with appropriate
    community partners to develop training program content
    and to publicize the availability of training courses in
    their service areas. All family caregiver and direct
    care provider training programs shall include
    instruction on the management of psychological and
    behavioral aspects of dementia, communication techniques
    for working with individuals who have dementia, and the
    appropriate, safe, and effective use of medications for
    older adults.
    ``(B) Incorporation of best practices.--A geriatric
    education center that receives an award under this
    subsection shall develop and include material on
    depression and other mental disorders common among older
    adults, medication safety issues for older adults, and
    management of the psychological and behavioral aspects
    of dementia and communication techniques with
    individuals who have dementia in all training courses,
    where appropriate.
    ``(6) Targets.--A geriatric education center that receives
    an award under this subsection shall meet targets approved by
    the Secretary for providing geriatric training to a certain
    number of faculty or practitioners during the term of the award,
    as well as other parameters established by the Secretary.
    ``(7) Amount of award.--An award under this subsection shall
    be in an amount of $150,000. Not more than 24 geriatric
    education centers may receive an award under this subsection.

    [[Page 624]]

    ``(8) Maintenance of effort.--A geriatric education center
    that receives an award under this subsection shall provide
    assurances to the Secretary that funds provided to the geriatric
    education center under this subsection will be used only to
    supplement, not to supplant, the amount of Federal, State, and
    local funds otherwise expended by the geriatric education
    center.
    ``(9) Authorization of appropriations.--In addition to any
    other funding available to carry out this section, there is
    authorized to be appropriated to carry out this subsection,
    $10,800,000 for the period of fiscal year 2011 through 2014.

    ``(e) Geriatric Career Incentive Awards.--
    ``(1) In general. <> --The
    Secretary shall award grants or contracts under this section to
    individuals described in paragraph (2) to foster greater
    interest among a variety of health professionals in entering the
    field of geriatrics, long-term care, and chronic care
    management.
    ``(2) Eligible individuals.--To be eligible to received an
    award under paragraph (1), an individual shall--
    ``(A) be an advanced practice nurse, a clinical
    social worker, a pharmacist, or student of psychology
    who is pursuing a doctorate or other advanced degree in
    geriatrics or related fields in an accredited health
    professions school; and
    ``(B) submit to the Secretary an application at such
    time, in such manner, and containing such information as
    the Secretary may require.
    ``(3) Condition of award.--As a condition of receiving an
    award under this subsection, an individual shall agree that,
    following completion of the award period, the individual will
    teach or practice in the field of geriatrics, long-term care, or
    chronic care management for a minimum of 5 years under
    guidelines set by the Secretary.
    ``(4) Authorization of appropriations.--There is authorized
    to be appropriated to carry out this subsection, $10,000,000 for
    the period of fiscal years 2011 through 2013.''.

    (b) Expansion of Eligibility for Geriatric Academic Career Awards;
    Payment to Institution.--Section 753(c) of the Public Health Service Act
    294(c)) <> is amended--
    (1) by redesignating paragraphs (4) and (5) as paragraphs
    (5) and (6), respectively;
    (2) by striking paragraph (2) through paragraph (3) and
    inserting the following:
    ``(2) Eligible individuals.--To be eligible to receive an
    Award under paragraph (1), an individual shall--
    ``(A) be board certified or board eligible in
    internal medicine, family practice, psychiatry, or
    licensed dentistry, or have completed any required
    training in a discipline and employed in an accredited
    health professions school that is approved by the
    Secretary;
    ``(B) have completed an approved fellowship program
    in geriatrics or have completed specialty training in
    geriatrics as required by the discipline and any
    addition geriatrics training as required by the
    Secretary; and
    ``(C) have a junior (non-tenured) faculty
    appointment at an accredited (as determined by the
    Secretary) school of medicine, osteopathic medicine,
    nursing, social work,

    [[Page 625]]

    psychology, dentistry, pharmacy, or other allied health
    disciplines in an accredited health professions school
    that is approved by the Secretary.
    ``(3) Limitations.--No Award under paragraph (1) may be made
    to an eligible individual unless the individual--
    ``(A) has submitted to the Secretary an application,
    at such time, in such manner, and containing such
    information as the Secretary may require, and the
    Secretary has approved such application;
    ``(B) provides, in such form and manner as the
    Secretary may require, assurances that the individual
    will meet the service requirement described in paragraph
    (6); and
    ``(C) provides, in such form and manner as the
    Secretary may require, assurances that the individual
    has a full-time faculty appointment in a health
    professions institution and documented commitment from
    such institution to spend 75 percent of the total time
    of such individual on teaching and developing skills in
    interdisciplinary education in geriatrics.
    ``(4) Maintenance of effort.--An eligible individual that
    receives an Award under paragraph (1) shall provide assurances
    to the Secretary that funds provided to the eligible individual
    under this subsection will be used only to supplement, not to
    supplant, the amount of Federal, State, and local funds
    otherwise expended by the eligible individual.''; and
    (3) in paragraph (5), as so designated--
    (A) in subparagraph (A)--
    (i) by inserting ``for individuals who are
    physicians'' after ``this section''; and
    (ii) <> by inserting
    after the period at the end the following: ``The
    Secretary shall determine the amount of an Award
    under this section for individuals who are not
    physicians.''; and
    (B) by adding at the end the following:
    ``(C) Payment to institution.--The Secretary shall
    make payments to institutions which include schools of
    medicine, osteopathic medicine, nursing, social work,
    psychology, dentistry, and pharmacy, or other allied
    health discipline in an accredited health professions
    school that is approved by the Secretary.''.

    (c) Comprehensive Geriatric Education.--Section 855 of the Public
    Health Service Act (42 U.S.C. 298) is amended--
    (1) in subsection (b)--
    (A) in paragraph (3), by striking ``or'' at the end;
    (B) in paragraph (4), by striking the period and
    inserting ``; or''; and
    (C) by adding at the end the following:
    ``(5) establish traineeships for individuals who are
    preparing for advanced education nursing degrees in geriatric
    nursing, long-term care, gero-psychiatric nursing or other
    nursing areas that specialize in the care of the elderly
    population.''; and
    (2) in subsection (e), by striking ``2003 through 2007'' and
    inserting ``2010 through 2014''.

    [[Page 626]]

    SEC. 5306. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND TRAINING GRANTS.

    (a) In General.--Part D of title VII (42 U.S.C. 294 et seq.) is
    amended by--
    (1) <> striking section 757;
    (2) <> redesignating section 756 (as
    amended by section 5103) as section 757; and
    (3) inserting after section 755 the following:

    ``SEC. 756. <> MENTAL AND BEHAVIORAL HEALTH
    EDUCATION AND TRAINING GRANTS.

    ``(a) Grants Authorized.--The Secretary may award grants to eligible
    institutions of higher education to support the recruitment of students
    for, and education and clinical experience of the students in--
    ``(1) baccalaureate, master's, and doctoral degree programs
    of social work, as well as the development of faculty in social
    work;
    ``(2) accredited master's, doctoral, internship, and post-
    doctoral residency programs of psychology for the development
    and implementation of interdisciplinary training of psychology
    graduate students for providing behavioral and mental health
    services, including substance abuse prevention and treatment
    services;
    ``(3) accredited institutions of higher education or
    accredited professional training programs that are establishing
    or expanding internships or other field placement programs in
    child and adolescent mental health in psychiatry, psychology,
    school psychology, behavioral pediatrics, psychiatric nursing,
    social work, school social work, substance abuse prevention and
    treatment, marriage and family therapy, school counseling, or
    professional counseling; and
    ``(4) State-licensed mental health nonprofit and for-profit
    organizations to enable such organizations to pay for programs
    for preservice or in-service training of paraprofessional child
    and adolescent mental health workers.

    ``(b) Eligibility Requirements.--To be eligible for a grant under
    this section, an institution shall demonstrate--
    ``(1) participation in the institutions' programs of
    individuals and groups from different racial, ethnic, cultural,
    geographic, religious, linguistic, and class backgrounds, and
    different genders and sexual orientations;
    ``(2) knowledge and understanding of the concerns of the
    individuals and groups described in subsection (a);
    ``(3) any internship or other field placement program
    assisted under the grant will prioritize cultural and linguistic
    competency;
    ``(4) the institution will provide to the Secretary such
    data, assurances, and information as the Secretary may require;
    and
    ``(5) with respect to any violation of the agreement between
    the Secretary and the institution, the institution will pay such
    liquidated damages as prescribed by the Secretary by regulation.

    ``(c) Institutional Requirement.--For grants authorized under
    subsection (a)(1), at least 4 of the grant recipients shall

    [[Page 627]]

    be historically black colleges or universities or other minority-serving
    institutions.
    ``(d) Priority.--
    ``(1) In selecting the grant recipients in social work under
    subsection (a)(1), the Secretary shall give priority to
    applicants that--
    ``(A) are accredited by the Council on Social Work
    Education;
    ``(B) have a graduation rate of not less than 80
    percent for social work students; and
    ``(C) exhibit an ability to recruit social workers
    from and place social workers in areas with a high need
    and high demand population.
    ``(2) In selecting the grant recipients in graduate
    psychology under subsection (a)(2), the Secretary shall give
    priority to institutions in which training focuses on the needs
    of vulnerable groups such as older adults and children,
    individuals with mental health or substance-related disorders,
    victims of abuse or trauma and of combat stress disorders such
    as posttraumatic stress disorder and traumatic brain injuries,
    homeless individuals, chronically ill persons, and their
    families.
    ``(3) In selecting the grant recipients in training programs
    in child and adolescent mental health under subsections (a)(3)
    and (a)(4), the Secretary shall give priority to applicants
    that--
    ``(A) have demonstrated the ability to collect data
    on the number of students trained in child and
    adolescent mental health and the populations served by
    such students after graduation or completion of
    preservice or in-service training;
    ``(B) have demonstrated familiarity with evidence-
    based methods in child and adolescent mental health
    services, including substance abuse prevention and
    treatment services;
    ``(C) have programs designed to increase the number
    of professionals and paraprofessionals serving high-
    priority populations and to applicants who come from
    high-priority communities and plan to serve medically
    underserved populations, in health professional shortage
    areas, or in medically underserved areas;
    ``(D) offer curriculum taught collaboratively with a
    family on the consumer and family lived experience or
    the importance of family-professional or family-
    paraprofessional partnerships; and
    ``(E) provide services through a community mental
    health program described in section 1913(b)(1).

    ``(e) Authorization of Appropriation.--For the fiscal years 2010
    through 2013, there is authorized to be appropriated to carry out this
    section--
    ``(1) $8,000,000 for training in social work in subsection
    (a)(1);
    ``(2) $12,000,000 for training in graduate psychology in
    subsection (a)(2), of which not less than $10,000,000 shall be
    allocated for doctoral, postdoctoral, and internship level
    training;
    ``(3) $10,000,000 for training in professional child and
    adolescent mental health in subsection (a)(3); and

    [[Page 628]]

    ``(4) $5,000,000 for training in paraprofessional child and
    adolescent work in subsection (a)(4).''.

    (b) Conforming Amendments.--Section 757(b)(2) of the Public Health
    Service Act, as redesignated by subsection (a) <> ,
    is amended by striking ``sections 751(a)(1)(A), 751(a)(1)(B), 753(b),
    754(3)(A), and 755(b)'' and inserting ``sections 751(b)(1)(A), 753(b),
    and 755(b)''.

    SEC. 5307. CULTURAL COMPETENCY, PREVENTION, AND PUBLIC HEALTH AND
    INDIVIDUALS WITH DISABILITIES TRAINING.

    (a) Title VII.--Section 741 of the Public Health Service Act (42
    U.S.C. 293e) is amended--
    (1) in subsection (a)--
    (A) by striking the subsection heading and inserting
    ``Cultural Competency, Prevention, and Public Health and
    Individuals With Disability Grants''; and
    (B) in paragraph (1), by striking ``for the purpose
    of'' and all that follows through the period at the end
    and inserting ``for the development, evaluation, and
    dissemination of research, demonstration projects, and
    model curricula for cultural competency, prevention,
    public health proficiency, reducing health disparities,
    and aptitude for working with individuals with
    disabilities training for use in health professions
    schools and continuing education programs, and for other
    purposes determined as appropriate by the Secretary.'';
    and
    (2) by striking subsection (b) and inserting the following:

    ``(b) Collaboration.--In carrying out subsection (a), the Secretary
    shall collaborate with health professional societies, licensing and
    accreditation entities, health professions schools, and experts in
    minority health and cultural competency, prevention, and public health
    and disability groups, community-based organizations, and other
    organizations as determined appropriate by the Secretary. The Secretary
    shall coordinate with curricula and research and demonstration projects
    developed under section 807.
    ``(c) Dissemination.--
    ``(1) In general.--Model curricula developed under this
    section shall be disseminated through the Internet Clearinghouse
    under section 270 and such other means as determined appropriate
    by the Secretary.
    ``(2) Evaluation.--The Secretary shall evaluate the adoption
    and the implementation of cultural competency, prevention, and
    public health, and working with individuals with a disability
    training curricula, and the facilitate inclusion of these
    competency measures in quality measurement systems as
    appropriate.

    ``(d) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section such sums as may be necessary for
    each of fiscal years 2010 through 2015.''.
    (b) Title VIII.--Section 807 of the Public Health Service Act (42
    U.S.C. 296e-1) is amended--
    (1) in subsection (a)--
    (A) by striking the subsection heading and inserting
    ``Cultural Competency, Prevention, and Public Health and
    Individuals With Disability Grants''; and
    (B) by striking ``for the purpose of'' and all that
    follows through ``health care.'' and inserting ``for the
    development,

    [[Page 629]]

    evaluation, and dissemination of research, demonstration
    projects, and model curricula for cultural competency,
    prevention, public health proficiency, reducing health
    disparities, and aptitude for working with individuals
    with disabilities training for use in health professions
    schools and continuing education programs, and for other
    purposes determined as appropriate by the Secretary.'';
    and
    (2) by redesignating subsection (b) as subsection (d);
    (3) by inserting after subsection (a) the following:

    ``(b) Collaboration.--In carrying out subsection (a), the Secretary
    shall collaborate with the entities described in section 741(b). The
    Secretary shall coordinate with curricula and research and demonstration
    projects developed under such section 741.
    ``(c) Dissemination.--Model curricula developed under this section
    shall be disseminated and evaluated in the same manner as model
    curricula developed under section 741, as described in subsection (c) of
    such section.''; and
    (4) in subsection (d), as so redesignated--
    (A) by striking ``subsection (a)'' and inserting
    ``this section''; and
    (B) by striking ``2001 through 2004'' and inserting
    ``2010 through 2015''.

    SEC. 5308. ADVANCED NURSING EDUCATION GRANTS.

    Section 811 of the Public Health Service Act (42 U.S.C. 296j) is
    amended--
    (1) in subsection (c)--
    (A) in the subsection heading, by striking ``and
    Nurse Midwifery Programs''; and
    (B) by striking ``and nurse midwifery'';
    (2) in subsection (f)--
    (A) by striking paragraph (2); and
    (B) by redesignating paragraph (3) as paragraph (2);
    and
    (3) by redesignating subsections (d), (e), and (f) as
    subsections (e), (f), and (g), respectively; and
    (4) by inserting after subsection (c), the following:

    ``(d) Authorized Nurse-midwifery Programs.--Midwifery programs that
    are eligible for support under this section are educational programs
    that--
    ``(1) have as their objective the education of midwives; and
    ``(2) are accredited by the American College of Nurse-
    Midwives Accreditation Commission for Midwifery Education.''.

    SEC. 5309. NURSE EDUCATION, PRACTICE, AND RETENTION GRANTS.

    (a) In General.--Section 831 of the Public Health Service Act (42
    U.S.C. 296p) is amended--
    (1) in the section heading, by striking ``retention'' and
    inserting ``quality'';
    (2) in subsection (a)--
    (A) in paragraph (1), by adding ``or'' after the
    semicolon;
    (B) by striking paragraph (2); and
    (C) by redesignating paragraph (3) as paragraph (2);
    (3) in subsection (b)(3), by striking ``managed care,
    quality improvement'' and inserting ``coordinated care'';
    (4) in subsection (g), by inserting ``, as defined in
    section 801(2),'' after ``school of nursing''; and

    [[Page 630]]

    (5) in subsection (h), by striking ``2003 through 2007'' and
    inserting ``2010 through 2014''.

    (b) Nurse Retention Grants.--Title VIII of the Public Health Service
    Act is amended by inserting after section 831 (42 U.S.C. 296b) the
    following:

    ``SEC. 831A. <> NURSE RETENTION GRANTS.

    ``(a) Retention Priority Areas.--The Secretary may award grants to,
    and enter into contracts with, eligible entities to enhance the nursing
    workforce by initiating and maintaining nurse retention programs
    pursuant to subsection (b) or (c).
    ``(b) Grants for Career Ladder Program.--The Secretary may award
    grants to, and enter into contracts with, eligible entities for
    programs--
    ``(1) to promote career advancement for individuals
    including licensed practical nurses, licensed vocational nurses,
    certified nurse assistants, home health aides, diploma degree or
    associate degree nurses, to become baccalaureate prepared
    registered nurses or advanced education nurses in order to meet
    the needs of the registered nurse workforce;
    ``(2) developing and implementing internships and residency
    programs in collaboration with an accredited school of nursing,
    as defined by section 801(2), to encourage mentoring and the
    development of specialties; or
    ``(3) to assist individuals in obtaining education and
    training required to enter the nursing profession and advance
    within such profession.

    ``(c) Enhancing Patient Care Delivery Systems.--
    ``(1) Grants.--The Secretary may award grants to eligible
    entities to improve the retention of nurses and enhance patient
    care that is directly related to nursing activities by enhancing
    collaboration and communication among nurses and other health
    care professionals, and by promoting nurse involvement in the
    organizational and clinical decision-making processes of a
    health care facility.
    ``(2) Priority.--In making awards of grants under this
    subsection, the Secretary shall give preference to applicants
    that have not previously received an award under this subsection
    (or section 831(c) as such section existed on the day before the
    date of enactment of this section).
    ``(3) Continuation of an award.--The Secretary shall make
    continuation of any award under this subsection beyond the
    second year of such award contingent on the recipient of such
    award having demonstrated to the Secretary measurable and
    substantive improvement in nurse retention or patient care.

    ``(d) Other Priority Areas.--The Secretary may award grants to, or
    enter into contracts with, eligible entities to address other areas that
    are of high priority to nurse retention, as determined by the Secretary.
    ``(e) Report.--The Secretary shall submit to the Congress before the
    end of each fiscal year a report on the grants awarded and the contracts
    entered into under this section. Each such report shall identify the
    overall number of such grants and contracts and provide an explanation
    of why each such grant or contract will meet the priority need of the
    nursing workforce.

    [[Page 631]]

    ``(f) Eligible Entity.--For purposes of this section, the term
    `eligible entity' includes an accredited school of nursing, as defined
    by section 801(2), a health care facility, or a partnership of such a
    school and facility.
    ``(g) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary for
    each of fiscal years 2010 through 2012.''.

    SEC. 5310. LOAN REPAYMENT AND SCHOLARSHIP PROGRAM.

    (a) Loan Repayments and Scholarships.--Section 846(a)(3) of the
    Public Health Service Act (42 U.S.C. 297n(a)(3)) is amended by inserting
    before the semicolon the following: ``, or in a accredited school of
    nursing, as defined by section 801(2), as nurse faculty''.
    (b) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296
    et seq.) is amended--
    (1) by redesignating section 810 <> (relating to prohibition against discrimination by
    schools on the basis of sex) as section 809 and moving such
    section so that it follows section 808;
    (2) in sections 835, 836, 838, 840, and 842, <>  by striking the term ``this
    subpart'' each place it appears and inserting ``this part'';
    (3) in section 836(h), <> by striking
    the last sentence;
    (4) in section 836, by redesignating subsection (l) as
    subsection (k);
    (5) in section 839, <> by striking
    ``839'' and all that follows through ``(a)'' and inserting
    ``839. (a)'';
    (6) in section 835(b), <> by striking
    ``841'' each place it appears and inserting ``871'';
    (7) by redesignating section 841 <> as
    section 871, moving part F to the end of the title, and
    redesignating such part as part I;
    (8) in part G--
    (A) by redesignating section 845 <>  as section 851; and
    (B) by redesignating part G as part F;
    (9) in part H--
    (A) by redesignating sections 851 and 852 <> as sections 861 and 862, respectively;
    and
    (B) by redesignating part H as part G; and
    (10) in part I--
    (A) by redesignating section 855, <>  as amended by section 5305, as section 865; and
    (B) by redesignating part I as part H.

    SEC. 5311. NURSE FACULTY LOAN PROGRAM.

    (a) In General.--Section 846A of the Public Health Service Act (42
    U.S.C. 297n-1) is amended--
    (1) in subsection (a)--
    (A) in the subsection heading, by striking
    ``Establishment'' and inserting ``School of Nursing
    Student Loan Fund''; and
    (B) by inserting ``accredited'' after ``agreement
    with any'';
    (2) in subsection (c)--
    (A) in paragraph (2), by striking ``$30,000'' and
    all that follows through the semicolon and inserting
    ``$35,500, during fiscal years 2010 and 2011 fiscal
    years (after fiscal year 2011, such amounts shall be
    adjusted to provide for

    [[Page 632]]

    a cost-of-attendance increase for the yearly loan rate
    and the aggregate loan;''; and
    (B) in paragraph (3)(A), by inserting ``an
    accredited'' after ``faculty member in'';
    (3) in subsection (e), by striking ``a school'' and
    inserting ``an accredited school''; and
    (4) in subsection (f), by striking ``2003 through 2007'' and
    inserting ``2010 through 2014''.

    (b) Eligible Individual Student Loan Repayment.--Title VIII of the
    Public Health Service Act is amended by inserting after section 846A (42
    U.S.C. 297n-1) the following:

    ``SEC. 847. <> ELIGIBLE INDIVIDUAL STUDENT LOAN
    REPAYMENT.

    ``(a) In General.--The Secretary, acting through the Administrator
    of the Health Resources and Services Administration, may enter into an
    agreement with eligible individuals for the repayment of education
    loans, in accordance with this section, to increase the number of
    qualified nursing faculty.
    ``(b) Agreements.--Each agreement entered into under this subsection
    shall require that the eligible individual shall serve as a full-time
    member of the faculty of an accredited school of nursing, for a total
    period, in the aggregate, of at least 4 years during the 6-year period
    beginning on the later of--
    ``(1) the date on which the individual receives a master's
    or doctorate nursing degree from an accredited school of
    nursing; or
    ``(2) the date on which the individual enters into an
    agreement under this subsection.

    ``(c) Agreement Provisions.--Agreements entered into pursuant to
    subsection (b) shall be entered into on such terms and conditions as the
    Secretary may determine, except that--
    ``(1) <> not more than 10 months after the
    date on which the 6-year period described under subsection (b)
    begins, but in no case before the individual starts as a full-
    time member of the faculty of an accredited school of nursing
    the Secretary shall begin making payments, for and on behalf of
    that individual, on the outstanding principal of, and interest
    on, any loan of that individual obtained to pay for such degree;
    ``(2) for an individual who has completed a master's in
    nursing or equivalent degree in nursing--
    ``(A) payments may not exceed $10,000 per calendar
    year; and
    ``(B) total payments may not exceed $40,000 during
    the 2010 and 2011 fiscal years (after fiscal year 2011,
    such amounts shall be adjusted to provide for a cost-of-
    attendance increase for the yearly loan rate and the
    aggregate loan); and
    ``(3) for an individual who has completed a doctorate or
    equivalent degree in nursing--
    ``(A) payments may not exceed $20,000 per calendar
    year; and
    ``(B) total payments may not exceed $80,000 during
    the 2010 and 2011 fiscal years (adjusted for subsequent
    fiscal years as provided for in the same manner as in
    paragraph (2)(B)).

    ``(d) Breach of Agreement.--

    [[Page 633]]

    ``(1) In general.--In the case of any agreement made under
    subsection (b), the individual is liable to the Federal
    Government for the total amount paid by the Secretary under such
    agreement, and for interest on such amount at the maximum legal
    prevailing rate, if the individual fails to meet the agreement
    terms required under such subsection.
    ``(2) Waiver or suspension of liability.--In the case of an
    individual making an agreement for purposes of paragraph (1),
    the Secretary shall provide for the waiver or suspension of
    liability under such paragraph if compliance by the individual
    with the agreement involved is impossible or would involve
    extreme hardship to the individual or if enforcement of the
    agreement with respect to the individual would be
    unconscionable.
    ``(3) Date certain for recovery.--Subject to paragraph (2),
    any amount that the Federal Government is entitled to recover
    under paragraph (1) shall be paid to the United States not later
    than the expiration of the 3-year period beginning on the date
    the United States becomes so entitled.
    ``(4) Availability.--Amounts recovered under paragraph (1)
    shall be available to the Secretary for making loan repayments
    under this section and shall remain available for such purpose
    until expended.

    ``(e) Eligible Individual Defined.--For purposes of this section,
    the term `eligible individual' means an individual who--
    ``(1) is a United States citizen, national, or lawful
    permanent resident;
    ``(2) holds an unencumbered license as a registered nurse;
    and
    ``(3) has either already completed a master's or doctorate
    nursing program at an accredited school of nursing or is
    currently enrolled on a full-time or part-time basis in such a
    program.

    ``(f) Priority.--For the purposes of this section and section 846A,
    funding priority will be awarded to School of Nursing Student Loans that
    support doctoral nursing students or Individual Student Loan Repayment
    that support doctoral nursing students.
    ``(g) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary for
    each of fiscal years 2010 through 2014.''.

    SEC. 5312. AUTHORIZATION OF APPROPRIATIONS FOR PARTS B THROUGH D OF
    TITLE VIII.

    Section 871 of the Public Health Service Act, as redesignated and
    moved by section 5310, is amended to read as follows:

    ``SEC. 871. <> AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out parts B, C, and D (subject to
    section 851(g)), there are authorized to be appropriated $338,000,000
    for fiscal year 2010, and such sums as may be necessary for each of the
    fiscal years 2011 through 2016.''.

    SEC. 5313. GRANTS TO PROMOTE THE COMMUNITY HEALTH WORKFORCE.

    (a) In General.--Part P of title III of the Public Health Service
    Act (42 U.S.C. 280g et seq.) is amended by adding at the end the
    following:

    [[Page 634]]

    ``SEC. 399V. <> GRANTS TO PROMOTE POSITIVE HEALTH
    BEHAVIORS AND OUTCOMES.

    ``(a) Grants Authorized.--The Director of the Centers for Disease
    Control and Prevention, in collaboration with the Secretary, shall award
    grants to eligible entities to promote positive health behaviors and
    outcomes for populations in medically underserved communities through
    the use of community health workers.
    ``(b) Use of Funds.--Grants awarded under subsection (a) shall be
    used to support community health workers--
    ``(1) to educate, guide, and provide outreach in a community
    setting regarding health problems prevalent in medically
    underserved communities, particularly racial and ethnic minority
    populations;
    ``(2) to educate and provide guidance regarding effective
    strategies to promote positive health behaviors and discourage
    risky health behaviors;
    ``(3) to educate and provide outreach regarding enrollment
    in health insurance including the Children's Health Insurance
    Program under title XXI of the Social Security Act, Medicare
    under title XVIII of such Act and Medicaid under title XIX of
    such Act;
    ``(4) to identify, educate, refer, and enroll underserved
    populations to appropriate healthcare agencies and community-
    based programs and organizations in order to increase access to
    quality healthcare services and to eliminate duplicative care;
    or
    ``(5) to educate, guide, and provide home visitation
    services regarding maternal health and prenatal care.

    ``(c) Application.--Each eligible entity that desires to receive a
    grant under subsection (a) shall submit an application to the Secretary,
    at such time, in such manner, and accompanied by such information as the
    Secretary may require.
    ``(d) Priority.--In awarding grants under subsection (a), the
    Secretary shall give priority to applicants that--
    ``(1) propose to target geographic areas--
    ``(A) with a high percentage of residents who are
    eligible for health insurance but are uninsured or
    underinsured;
    ``(B) with a high percentage of residents who suffer
    from chronic diseases; or
    ``(C) with a high infant mortality rate;
    ``(2) have experience in providing health or health-related
    social services to individuals who are underserved with respect
    to such services; and
    ``(3) have documented community activity and experience with
    community health workers.

    ``(e) Collaboration With Academic Institutions and the One-stop
    Delivery System.--The Secretary shall encourage community health worker
    programs receiving funds under this section to collaborate with academic
    institutions and one-stop delivery systems under section 134(c) of the
    Workforce Investment Act of 1998. Nothing in this section shall be
    construed to require such collaboration.
    ``(f) Evidence-based Interventions.--The Secretary shall encourage
    community health worker programs receiving funding under this section to
    implement a process or an outcome-based

    [[Page 635]]

    payment system that rewards community health workers for connecting
    underserved populations with the most appropriate services at the most
    appropriate time. Nothing in this section shall be construed to require
    such a payment.
    ``(g) Quality Assurance and Cost
    Effectiveness. <> --The Secretary shall establish
    guidelines for assuring the quality of the training and supervision of
    community health workers under the programs funded under this section
    and for assuring the cost-effectiveness of such programs.

    ``(h) Monitoring.--The Secretary shall monitor community health
    worker programs identified in approved applications under this section
    and shall determine whether such programs are in compliance with the
    guidelines established under subsection (g).
    ``(i) Technical Assistance.--The Secretary may provide technical
    assistance to community health worker programs identified in approved
    applications under this section with respect to planning, developing,
    and operating programs under the grant.
    ``(j) Authorization of Appropriations.--There are authorized to be
    appropriated, such sums as may be necessary to carry out this section
    for each of fiscal years 2010 through 2014.
    ``(k) Definitions.--In this section:
    ``(1) Community health worker.--The term `community health
    worker', as defined by the Department of Labor as Standard
    Occupational Classification [21-1094] means an individual who
    promotes health or nutrition within the community in which the
    individual resides--
    ``(A) by serving as a liaison between communities
    and healthcare agencies;
    ``(B) by providing guidance and social assistance to
    community residents;
    ``(C) by enhancing community residents' ability to
    effectively communicate with healthcare providers;
    ``(D) by providing culturally and linguistically
    appropriate health or nutrition education;
    ``(E) by advocating for individual and community
    health;
    ``(F) by providing referral and follow-up services
    or otherwise coordinating care; and
    ``(G) by proactively identifying and enrolling
    eligible individuals in Federal, State, local, private
    or nonprofit health and human services programs.
    ``(2) Community setting.--The term `community setting' means
    a home or a community organization located in the neighborhood
    in which a participant in the program under this section
    resides.
    ``(3) Eligible entity.--The term `eligible entity' means a
    public or nonprofit private entity (including a State or public
    subdivision of a State, a public health department, a free
    health clinic, a hospital, or a Federally-qualified health
    center (as defined in section 1861(aa) of the Social Security
    Act)), or a consortium of any such entities.
    ``(4) Medically underserved community.--The term `medically
    underserved community' means a community identified by a State--
    ``(A) that has a substantial number of individuals
    who are members of a medically underserved population,
    as defined by section 330(b)(3); and

    [[Page 636]]

    ``(B) a significant portion of which is a health
    professional shortage area as designated under section
    332.''.

    SEC. 5314. FELLOWSHIP TRAINING IN PUBLIC HEALTH.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 294n
    et seq.), as amended by section 5206, is further amended by adding at
    the end the following:

    ``SEC. 778. <> FELLOWSHIP TRAINING IN APPLIED
    PUBLIC HEALTH EPIDEMIOLOGY, PUBLIC HEALTH LABORATORY
    SCIENCE, PUBLIC HEALTH INFORMATICS, AND EXPANSION OF THE
    EPIDEMIC INTELLIGENCE SERVICE.

    ``(a) In General.--The Secretary may carry out activities to address
    documented workforce shortages in State and local health departments in
    the critical areas of applied public health epidemiology and public
    health laboratory science and informatics and may expand the Epidemic
    Intelligence Service.
    ``(b) Specific Uses.--In carrying out subsection (a), the Secretary
    shall provide for the expansion of existing fellowship programs operated
    through the Centers for Disease Control and Prevention in a manner that
    is designed to alleviate shortages of the type described in subsection
    (a).
    ``(c) Other Programs.--The Secretary may provide for the expansion
    of other applied epidemiology training programs that meet objectives
    similar to the objectives of the programs described in subsection (b).
    ``(d) Work Obligation.--Participation in fellowship training
    programs under this section shall be deemed to be service for purposes
    of satisfying work obligations stipulated in contracts under section
    338I(j).
    ``(e) General Support.--Amounts may be used from grants awarded
    under this section to expand the Public Health Informatics Fellowship
    Program at the Centers for Disease Control and Prevention to better
    support all public health systems at all levels of government.
    ``(f) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section $39,500,000 for each of fiscal
    years 2010 through 2013, of which--
    ``(1) $5,000,000 shall be made available in each such fiscal
    year for epidemiology fellowship training program activities
    under subsections (b) and (c);
    ``(2) $5,000,000 shall be made available in each such fiscal
    year for laboratory fellowship training programs under
    subsection (b);
    ``(3) $5,000,000 shall be made available in each such fiscal
    year for the Public Health Informatics Fellowship Program under
    subsection (e); and
    ``(4) $24,500,000 shall be made available for expanding the
    Epidemic Intelligence Service under subsection (a).''.

    SEC. 5315. UNITED STATES PUBLIC HEALTH SCIENCES TRACK.

    Title II of the Public Health Service Act (42 U.S.C. 202 et seq.) is
    amended by adding at the end the following:

    [[Page 637]]

    ``PART D--UNITED STATES PUBLIC HEALTH SCIENCES TRACK

    ``SEC. 271. <> ESTABLISHMENT.

    ``(a) United States Public Health Services Track.--
    ``(1) In general.--There is hereby authorized to be
    established a United States Public Health Sciences Track
    (referred to in this part as the `Track'), at sites to be
    selected by the Secretary, with authority to grant appropriate
    advanced degrees in a manner that uniquely emphasizes team-based
    service, public health, epidemiology, and emergency preparedness
    and response. It shall be so organized as to graduate not less
    than--
    ``(A) 150 medical students annually, 10 of whom
    shall be awarded studentships to the Uniformed Services
    University of Health Sciences;
    ``(B) 100 dental students annually;
    ``(C) 250 nursing students annually;
    ``(D) 100 public health students annually;
    ``(E) 100 behavioral and mental health professional
    students annually;
    ``(F) 100 physician assistant or nurse practitioner
    students annually; and
    ``(G) 50 pharmacy students annually.
    ``(2) Locations.--The Track shall be located at existing and
    accredited, affiliated health professions education training
    programs at academic health centers located in regions of the
    United States determined appropriate by the Surgeon General, in
    consultation with the National Health Care Workforce Commission
    established in section 5101 of the Patient Protection and
    Affordable Care Act.

    ``(b) Number of Graduates.--Except as provided in subsection (a),
    the number of persons to be graduated from the Track shall be prescribed
    by the Secretary. In so prescribing the number of persons to be
    graduated from the Track, the Secretary shall institute actions
    necessary to ensure the maximum number of first-year enrollments in the
    Track consistent with the academic capacity of the affiliated sites and
    the needs of the United States for medical, dental, and nursing
    personnel.
    ``(c) Development.--The development of the Track may be by such
    phases as the Secretary may prescribe subject to the requirements of
    subsection (a).
    ``(d) Integrated Longitudinal Plan.--The Surgeon General shall
    develop an integrated longitudinal plan for health professions
    continuing education throughout the continuum of health-related
    education, training, and practice. Training under such plan shall
    emphasize patient-centered, interdisciplinary, and care coordination
    skills. Experience with deployment of emergency response teams shall be
    included during the clinical experiences.
    ``(e) Faculty Development.--The Surgeon General shall develop
    faculty development programs and curricula in decentralized venues of
    health care, to balance urban, tertiary, and inpatient venues.

    ``SEC. 272. <> ADMINISTRATION.

    ``(a) In General.--The business of the Track shall be conducted by
    the Surgeon General with funds appropriated for and provided

    [[Page 638]]

    by the Department of Health and Human Services. The National Health Care
    Workforce Commission shall assist the Surgeon General in an advisory
    capacity.
    ``(b) Faculty.--
    ``(1) In general.--The Surgeon General, after considering
    the recommendations of the National Health Care Workforce
    Commission, shall obtain the services of such professors,
    instructors, and administrative and other employees as may be
    necessary to operate the Track, but utilize when possible,
    existing affiliated health professions training institutions.
    Members of the faculty and staff shall be employed under salary
    schedules and granted retirement and other related benefits
    prescribed by the Secretary so as to place the employees of the
    Track faculty on a comparable basis with the employees of fully
    accredited schools of the health professions within the United
    States.
    ``(2) Titles.--The Surgeon General may confer academic
    titles, as appropriate, upon the members of the faculty.
    ``(3) Nonapplication of provisions.--The limitations in
    section 5373 of title 5, United States Code, shall not apply to
    the authority of the Surgeon General under paragraph (1) to
    prescribe salary schedules and other related benefits.

    ``(c) Agreements.--The Surgeon General may negotiate agreements with
    agencies of the Federal Government to utilize on a reimbursable basis
    appropriate existing Federal medical resources located in the United
    States (or locations selected in accordance with section 271(a)(2)).
    Under such agreements the facilities concerned will retain their
    identities and basic missions. The Surgeon General may negotiate
    affiliation agreements with accredited universities and health
    professions training institutions in the United States. Such agreements
    may include provisions for payments for educational services provided
    students participating in Department of Health and Human Services
    educational programs.
    ``(d) Programs.--The Surgeon General may establish the following
    educational programs for Track students:
    ``(1) Postdoctoral, postgraduate, and technological
    programs.
    ``(2) A cooperative program for medical, dental, physician
    assistant, pharmacy, behavioral and mental health, public
    health, and nursing students.
    ``(3) Other programs that the Surgeon General determines
    necessary in order to operate the Track in a cost-effective
    manner.

    ``(e) Continuing Medical Education.--The Surgeon General shall
    establish programs in continuing medical education for members of the
    health professions to the end that high standards of health care may be
    maintained within the United States.
    ``(f) Authority of the Surgeon General.--
    ``(1) <> In general.--The Surgeon
    General is authorized--
    ``(A) to enter into contracts with, accept grants
    from, and make grants to any nonprofit entity for the
    purpose of carrying out cooperative enterprises in
    medical, dental, physician assistant, pharmacy,
    behavioral and mental health, public health, and nursing
    research, consultation, and education;
    ``(B) to enter into contracts with entities under
    which the Surgeon General may furnish the services of
    such

    [[Page 639]]

    professional, technical, or clerical personnel as may be
    necessary to fulfill cooperative enterprises undertaken
    by the Track;
    ``(C) to accept, hold, administer, invest, and spend
    any gift, devise, or bequest of personal property made
    to the Track, including any gift, devise, or bequest for
    the support of an academic chair, teaching, research, or
    demonstration project;
    ``(D) to enter into agreements with entities that
    may be utilized by the Track for the purpose of
    enhancing the activities of the Track in education,
    research, and technological applications of knowledge;
    and
    ``(E) to accept the voluntary services of guest
    scholars and other persons.
    ``(2) Limitation.--The Surgeon General may not enter into
    any contract with an entity if the contract would obligate the
    Track to make outlays in advance of the enactment of budget
    authority for such outlays.
    ``(3) Scientists.--Scientists or other medical, dental, or
    nursing personnel utilized by the Track under an agreement
    described in paragraph (1) may be appointed to any position
    within the Track and may be permitted to perform such duties
    within the Track as the Surgeon General may approve.
    ``(4) Volunteer services.--A person who provides voluntary
    services under the authority of subparagraph (E) of paragraph
    (1) shall be considered to be an employee of the Federal
    Government for the purposes of chapter 81 of title 5, relating
    to compensation for work-related injuries, and to be an employee
    of the Federal Government for the purposes of chapter 171 of
    title 28, relating to tort claims. Such a person who is not
    otherwise employed by the Federal Government shall not be
    considered to be a Federal employee for any other purpose by
    reason of the provision of such services.

    ``SEC. 273. <> STUDENTS; SELECTION; OBLIGATION.

    ``(a) Student Selection.--
    ``(1) In general.--Medical, dental, physician assistant,
    pharmacy, behavioral and mental health, public health, and
    nursing students at the Track shall be selected under procedures
    prescribed by the Surgeon General. In so prescribing, the
    Surgeon General shall consider the recommendations of the
    National Health Care Workforce Commission.
    ``(2) Priority.--In developing admissions procedures under
    paragraph (1), the Surgeon General shall ensure that such
    procedures give priority to applicant medical, dental, physician
    assistant, pharmacy, behavioral and mental health, public
    health, and nursing students from rural communities and
    underrepresented minorities.

    ``(b) Contract and Service Obligation.--
    ``(1) Contract.--Upon being admitted to the Track, a
    medical, dental, physician assistant, pharmacy, behavioral and
    mental health, public health, or nursing student shall enter
    into a written contract with the Surgeon General that shall
    contain--
    ``(A) an agreement under which--
    ``(i) subject to subparagraph (B), the Surgeon
    General agrees to provide the student with tuition
    (or

    [[Page 640]]

    tuition remission) and a student stipend
    (described in paragraph (2)) in each school year
    for a period of years (not to exceed 4 school
    years) determined by the student, during which
    period the student is enrolled in the Track at an
    affiliated or other participating health
    professions institution pursuant to an agreement
    between the Track and such institution; and
    ``(ii) subject to subparagraph (B), the
    student agrees--
    ``(I) to accept the provision of
    such tuition and student stipend to the
    student;
    ``(II) to maintain enrollment at the
    Track until the student completes the
    course of study involved;
    ``(III) while enrolled in such
    course of study, to maintain an
    acceptable level of academic standing
    (as determined by the Surgeon General);
    ``(IV) if pursuing a degree from a
    school of medicine or osteopathic
    medicine, dental, public health, or
    nursing school or a physician assistant,
    pharmacy, or behavioral and mental
    health professional program, to complete
    a residency or internship in a specialty
    that the Surgeon General determines is
    appropriate; and
    ``(V) to serve for a period of time
    (referred to in this part as the `period
    of obligated service') within the
    Commissioned Corps of the Public Health
    Service equal to 2 years for each school
    year during which such individual was
    enrolled at the College, reduced as
    provided for in paragraph (3);
    ``(B) a provision that any financial obligation of
    the United States arising out of a contract entered into
    under this part and any obligation of the student which
    is conditioned thereon, is contingent upon funds being
    appropriated to carry out this part;
    ``(C) a statement of the damages to which the United
    States is entitled for the student's breach of the
    contract; and
    ``(D) such other statements of the rights and
    liabilities of the Secretary and of the individual, not
    inconsistent with the provisions of this part.
    ``(2) Tuition and student stipend.--
    ``(A) Tuition remission rates.--The Surgeon General,
    based on the recommendations of the National Health Care
    Workforce Commission, shall establish Federal tuition
    remission rates to be used by the Track to provide
    reimbursement to affiliated and other participating
    health professions institutions for the cost of
    educational services provided by such institutions to
    Track students. The agreement entered into by such
    participating institutions under paragraph (1)(A)(i)
    shall contain an agreement to accept as payment in full
    the established remission rate under this subparagraph.
    ``(B) Stipend.--The Surgeon General, based on the
    recommendations of the National Health Care Workforce

    [[Page 641]]

    Commission, shall establish and update Federal stipend
    rates for payment to students under this part.
    ``(3) Reductions in the period of obligated service.--The
    period of obligated service under paragraph (1)(A)(ii)(V) shall
    be reduced--
    ``(A) in the case of a student who elects to
    participate in a high-needs speciality residency (as
    determined by the National Health Care Workforce
    Commission), by 3 months for each year of such
    participation (not to exceed a total of 12 months); and
    ``(B) in the case of a student who, upon completion
    of their residency, elects to practice in a Federal
    medical facility (as defined in section 781(e)) that is
    located in a health professional shortage area (as
    defined in section 332), by 3 months for year of full-
    time practice in such a facility (not to exceed a total
    of 12 months).

    ``(c) Second 2 Years of Service.--During the third and fourth years
    in which a medical, dental, physician assistant, pharmacy, behavioral
    and mental health, public health, or nursing student is enrolled in the
    Track, training should be designed to prioritize clinical rotations in
    Federal medical facilities in health professional shortage areas, and
    emphasize a balance of hospital and community-based experiences, and
    training within interdisciplinary teams.
    ``(d) Dentist, Physician Assistant, Pharmacist, Behavioral and
    Mental Health Professional, Public Health Professional, and Nurse
    Training.--The Surgeon General shall establish provisions applicable
    with respect to dental, physician assistant, pharmacy, behavioral and
    mental health, public health, and nursing students that are comparable
    to those for medical students under this section, including service
    obligations, tuition support, and stipend support. The Surgeon General
    shall give priority to health professions training institutions that
    train medical, dental, physician assistant, pharmacy, behavioral and
    mental health, public health, and nursing students for some significant
    period of time together, but at a minimum have a discrete and shared
    core curriculum.
    ``(e) <> Elite Federal Disaster Teams.--The Surgeon
    General, in consultation with the Secretary, the Director of the Centers
    for Disease Control and Prevention, and other appropriate military and
    Federal government agencies, shall develop criteria for the appointment
    of highly qualified Track faculty, medical, dental, physician assistant,
    pharmacy, behavioral and mental health, public health, and nursing
    students, and graduates to elite Federal disaster preparedness teams to
    train and to respond to public health emergencies, natural disasters,
    bioterrorism events, and other emergencies.

    ``(f) <> Student Dropped From Track in Affiliate
    School.--A medical, dental, physician assistant, pharmacy, behavioral
    and mental health, public health, or nursing student who, under
    regulations prescribed by the Surgeon General, is dropped from the Track
    in an affiliated school for deficiency in conduct or studies, or for
    other reasons, shall be liable to the United States for all tuition and
    stipend support provided to the student.

    [[Page 642]]

    ``SEC. 274. <> FUNDING.

    ``Beginning <> with fiscal year 2010, the
    Secretary shall transfer from the Public Health and Social Services
    Emergency Fund such sums as may be necessary to carry out this part.''.

    Subtitle E--Supporting the Existing Health Care Workforce

    SEC. 5401. CENTERS OF EXCELLENCE.

    Section 736 of the Public Health Service Act (42 U.S.C. 293) is
    amended by striking subsection (h) and inserting the following:
    ``(h) <> Formula for Allocations.--
    ``(1) <> Allocations.--Based on the
    amount appropriated under subsection (i) for a fiscal year, the
    following subparagraphs shall apply as appropriate:
    ``(A) In general.--If the amounts appropriated under
    subsection (i) for a fiscal year are $24,000,000 or
    less--
    ``(i) the Secretary shall make available
    $12,000,000 for grants under subsection (a) to
    health professions schools that meet the
    conditions described in subsection (c)(2)(A); and
    ``(ii) and available after grants are made
    with funds under clause (i), the Secretary shall
    make available--
    ``(I) 60 percent of such amount for
    grants under subsection (a) to health
    professions schools that meet the
    conditions described in paragraph (3) or
    (4) of subsection (c) (including meeting
    the conditions under subsection (e));
    and
    ``(II) 40 percent of such amount for
    grants under subsection (a) to health
    professions schools that meet the
    conditions described in subsection
    (c)(5).
    ``(B) Funding in excess of $24,000,000.--If amounts
    appropriated under subsection (i) for a fiscal year
    exceed $24,000,000 but are less than $30,000,000--
    ``(i) 80 percent of such excess amounts shall
    be made available for grants under subsection (a)
    to health professions schools that meet the
    requirements described in paragraph (3) or (4) of
    subsection (c) (including meeting conditions
    pursuant to subsection (e)); and
    ``(ii) 20 percent of such excess amount shall
    be made available for grants under subsection (a)
    to health professions schools that meet the
    conditions described in subsection (c)(5).
    ``(C) Funding in excess of $30,000,000.--If amounts
    appropriated under subsection (i) for a fiscal year
    exceed $30,000,000 but are less than $40,000,000, the
    Secretary shall make available--
    ``(i) not less than $12,000,000 for grants
    under subsection (a) to health professions schools
    that meet the conditions described in subsection
    (c)(2)(A);
    ``(ii) not less than $12,000,000 for grants
    under subsection (a) to health professions schools
    that meet the conditions described in paragraph
    (3) or (4) of

    [[Page 643]]

    subsection (c) (including meeting conditions
    pursuant to subsection (e));
    ``(iii) not less than $6,000,000 for grants
    under subsection (a) to health professions schools
    that meet the conditions described in subsection
    (c)(5); and
    ``(iv) after grants are made with funds under
    clauses (i) through (iii), any remaining excess
    amount for grants under subsection (a) to health
    professions schools that meet the conditions
    described in paragraph (2)(A), (3), (4), or (5) of
    subsection (c).
    ``(D) Funding in excess of $40,000,000.--If amounts
    appropriated under subsection (i) for a fiscal year are
    $40,000,000 or more, the Secretary shall make
    available--
    ``(i) not less than $16,000,000 for grants
    under subsection (a) to health professions schools
    that meet the conditions described in subsection
    (c)(2)(A);
    ``(ii) not less than $16,000,000 for grants
    under subsection (a) to health professions schools
    that meet the conditions described in paragraph
    (3) or (4) of subsection (c) (including meeting
    conditions pursuant to subsection (e));
    ``(iii) not less than $8,000,000 for grants
    under subsection (a) to health professions schools
    that meet the conditions described in subsection
    (c)(5); and
    ``(iv) after grants are made with funds under
    clauses (i) through (iii), any remaining funds for
    grants under subsection (a) to health professions
    schools that meet the conditions described in
    paragraph (2)(A), (3), (4), or (5) of subsection
    (c).
    ``(2) No limitation.--Nothing in this subsection shall be
    construed as limiting the centers of excellence referred to in
    this section to the designated amount, or to preclude such
    entities from competing for grants under this section.
    ``(3) Maintenance of effort.--
    ``(A) In general.--With respect to activities for
    which a grant made under this part are authorized to be
    expended, the Secretary may not make such a grant to a
    center of excellence for any fiscal year unless the
    center agrees to maintain expenditures of non-Federal
    amounts for such activities at a level that is not less
    than the level of such expenditures maintained by the
    center for the fiscal year preceding the fiscal year for
    which the school receives such a grant.
    ``(B) Use of federal funds.--With respect to any
    Federal amounts received by a center of excellence and
    available for carrying out activities for which a grant
    under this part is authorized to be expended, the center
    shall, before expending the grant, expend the Federal
    amounts obtained from sources other than the grant,
    unless given prior approval from the Secretary.

    ``(i) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section--
    ``(1) $50,000,000 for each of the fiscal years 2010 through
    2015; and
    ``(2) and such sums as are necessary for each subsequent
    fiscal year.''.

    [[Page 644]]

    SEC. 5402. HEALTH CARE PROFESSIONALS TRAINING FOR DIVERSITY.

    (a) Loan Repayments and Fellowships Regarding Faculty Positions.--
    Section 738(a)(1) of the Public Health Service Act (42 U.S.C.
    293b(a)(1)) is amended by striking ``$20,000 of the principal and
    interest of the educational loans of such individuals.'' and inserting
    ``$30,000 of the principal and interest of the educational loans of such
    individuals.''.
    (b) Scholarships for Disadvantaged Students.--Section 740(a) of such
    Act (42 U.S.C. 293d(a)) is amended by striking ``$37,000,000'' and all
    that follows through ``2002'' and inserting ``$51,000,000 for fiscal
    year 2010, and such sums as may be necessary for each of the fiscal
    years 2011 through 2014''.
    (c) Reauthorization for Loan Repayments and Fellowships Regarding
    Faculty Positions.--Section 740(b) of such Act (42 U.S.C. 293d(b)) is
    amended by striking ``appropriated'' and all that follows through the
    period at the end and inserting ``appropriated, $5,000,000 for each of
    the fiscal years 2010 through 2014.''.
    (d) Reauthorization for Educational Assistance in the Health
    Professions Regarding Individuals From a Disadvantaged Background.--
    Section 740(c) of such Act (42 U.S.C. 293d(c)) is amended by striking
    the first sentence and inserting the following: ``For the purpose of
    grants and contracts under section 739(a)(1), there is authorized to be
    appropriated $60,000,000 for fiscal year 2010 and such sums as may be
    necessary for each of the fiscal years 2011 through 2014.''

    SEC. 5403. INTERDISCIPLINARY, COMMUNITY-BASED LINKAGES.

    (a) Area Health Education Centers.--Section 751 of the Public Health
    Service Act (42 U.S.C. 294a) is amended to read as follows:

    ``SEC. 751. AREA HEALTH EDUCATION CENTERS.

    ``(a) Establishment of Awards.--The Secretary shall make the
    following 2 types of awards in accordance with this section:
    ``(1) Infrastructure development award.--The Secretary shall
    make awards to eligible entities to enable such entities to
    initiate health care workforce educational programs or to
    continue to carry out comparable programs that are operating at
    the time the award is made by planning, developing, operating,
    and evaluating an area health education center program.
    ``(2) Point of service maintenance and enhancement award.--
    The Secretary shall make awards to eligible entities to maintain
    and improve the effectiveness and capabilities of an existing
    area health education center program, and make other
    modifications to the program that are appropriate due to changes
    in demographics, needs of the populations served, or other
    similar issues affecting the area health education center
    program. For the purposes of this section, the term `Program'
    refers to the area health education center program.

    ``(b) Eligible Entities; Application.--
    ``(1) <> Eligible entities.--
    ``(A) Infrastructure development.--For purposes of
    subsection (a)(1), the term `eligible entity' means a
    school of medicine or osteopathic medicine, an
    incorporated consortium of such schools, or the parent
    institutions of such a school. With respect to a State
    in which no area

    [[Page 645]]

    health education center program is in operation, the
    Secretary may award a grant or contract under subsection
    (a)(1) to a school of nursing.
    ``(B) Point of service maintenance and
    enhancement.--For purposes of subsection (a)(2), the
    term `eligible entity' means an entity that has received
    funds under this section, is operating an area health
    education center program, including an area health
    education center or centers, and has a center or centers
    that are no longer eligible to receive financial
    assistance under subsection (a)(1).
    ``(2) Application.--An eligible entity desiring to receive
    an award under this section shall submit to the Secretary an
    application at such time, in such manner, and containing such
    information as the Secretary may require.

    ``(c) Use of Funds.--
    ``(1) Required activities. <> --An eligible
    entity shall use amounts awarded under a grant under subsection
    (a)(1) or (a)(2) to carry out the following activities:
    ``(A) Develop and implement strategies, in
    coordination with the applicable one-stop delivery
    system under section 134(c) of the Workforce Investment
    Act of 1998, to recruit individuals from
    underrepresented minority populations or from
    disadvantaged or rural backgrounds into health
    professions, and support such individuals in attaining
    such careers.
    ``(B) Develop and implement strategies to foster and
    provide community-based training and education to
    individuals seeking careers in health professions within
    underserved areas for the purpose of developing and
    maintaining a diverse health care workforce that is
    prepared to deliver high-quality care, with an emphasis
    on primary care, in underserved areas or for health
    disparity populations, in collaboration with other
    Federal and State health care workforce development
    programs, the State workforce agency, and local
    workforce investment boards, and in health care safety
    net sites.
    ``(C) Prepare individuals to more effectively
    provide health services to underserved areas and health
    disparity populations through field placements or
    preceptorships in conjunction with community-based
    organizations, accredited primary care residency
    training programs, Federally qualified health centers,
    rural health clinics, public health departments, or
    other appropriate facilities.
    ``(D) Conduct and participate in interdisciplinary
    training that involves physicians, physician assistants,
    nurse practitioners, nurse midwives, dentists,
    psychologists, pharmacists, optometrists, community
    health workers, public and allied health professionals,
    or other health professionals, as practicable.
    ``(E) Deliver or facilitate continuing education and
    information dissemination programs for health care
    professionals, with an emphasis on individuals providing
    care in underserved areas and for health disparity
    populations.
    ``(F) Propose and implement effective program and
    outcomes measurement and evaluation strategies.

    [[Page 646]]

    ``(G) Establish a youth public health program to
    expose and recruit high school students into health
    careers, with a focus on careers in public health.
    ``(2) Innovative opportunities.--An eligible entity may use
    amounts awarded under a grant under subsection (a)(1) or
    subsection (a)(2) to carry out any of the following activities:
    ``(A) Develop and implement innovative curricula in
    collaboration with community-based accredited primary
    care residency training programs, Federally qualified
    health centers, rural health clinics, behavioral and
    mental health facilities, public health departments, or
    other appropriate facilities, with the goal of
    increasing the number of primary care physicians and
    other primary care providers prepared to serve in
    underserved areas and health disparity populations.
    ``(B) Coordinate community-based participatory
    research with academic health centers, and facilitate
    rapid flow and dissemination of evidence-based health
    care information, research results, and best practices
    to improve quality, efficiency, and effectiveness of
    health care and health care systems within community
    settings.
    ``(C) Develop and implement other strategies to
    address identified workforce needs and increase and
    enhance the health care workforce in the area served by
    the area health education center program.

    ``(d) Requirements.--
    ``(1) Area health education center program.--In carrying out
    this section, the Secretary shall ensure the following:
    ``(A) An entity that receives an award under this
    section shall conduct at least 10 percent of clinical
    education required for medical students in community
    settings that are removed from the primary teaching
    facility of the contracting institution for grantees
    that operate a school of medicine or osteopathic
    medicine. In States in which an entity that receives an
    award under this section is a nursing school or its
    parent institution, the Secretary shall alternatively
    ensure that--
    ``(i) the nursing school conducts at least 10
    percent of clinical education required for nursing
    students in community settings that are remote
    from the primary teaching facility of the school;
    and
    ``(ii) the entity receiving the award
    maintains a written agreement with a school of
    medicine or osteopathic medicine to place students
    from that school in training sites in the area
    health education center program area.
    ``(B) An entity receiving funds under subsection
    (a)(2) does not distribute such funding to a center that
    is eligible to receive funding under subsection (a)(1).
    ``(2) Area health education center.--The Secretary shall
    ensure that each area health education center program includes
    at least 1 area health education center, and that each such
    center--
    ``(A) is a public or private organization whose
    structure, governance, and operation is independent from
    the awardee and the parent institution of the awardee;

    [[Page 647]]

    ``(B) is not a school of medicine or osteopathic
    medicine, the parent institution of such a school, or a
    branch campus or other subunit of a school of medicine
    or osteopathic medicine or its parent institution, or a
    consortium of such entities;
    ``(C) designates an underserved area or population
    to be served by the center which is in a location
    removed from the main location of the teaching
    facilities of the schools participating in the program
    with such center and does not duplicate, in whole or in
    part, the geographic area or population served by any
    other center;
    ``(D) fosters networking and collaboration among
    communities and between academic health centers and
    community-based centers;
    ``(E) serves communities with a demonstrated need of
    health professionals in partnership with academic
    medical centers;
    ``(F) addresses the health care workforce needs of
    the communities served in coordination with the public
    workforce investment system; and
    ``(G) has a community-based governing or advisory
    board that reflects the diversity of the communities
    involved.

    ``(e) Matching Funds.--With respect to the costs of operating a
    program through a grant under this section, to be eligible for financial
    assistance under this section, an entity shall make available (directly
    or through contributions from State, county or municipal governments, or
    the private sector) recurring non-Federal contributions in cash or in
    kind, toward such costs in an amount that is equal to not less than 50
    percent of such costs. At least 25 percent of the total required non-
    Federal contributions shall be in cash. An entity may apply to the
    Secretary for a waiver of not more than 75 percent of the matching fund
    amount required by the entity for each of the first 3 years the entity
    is funded through a grant under subsection (a)(1).
    ``(f) Limitation.--Not less than 75 percent of the total amount
    provided to an area health education center program under subsection
    (a)(1) or (a)(2) shall be allocated to the area health education centers
    participating in the program under this section. <>  To provide needed flexibility to newly funded area health
    education center programs, the Secretary may waive the requirement in
    the sentence for the first 2 years of a new area health education center
    program funded under subsection (a)(1).

    ``(g) Award.--An award to an entity under this section shall be not
    less than $250,000 annually per area health education center included in
    the program involved. If amounts appropriated to carry out this section
    are not sufficient to comply with the preceding sentence, the Secretary
    may reduce the per center amount provided for in such sentence as
    necessary, provided the distribution established in subsection (j)(2) is
    maintained.
    ``(h) Project Terms.--
    ``(1) In general.--Except as provided in paragraph (2), the
    period during which payments may be made under an award under
    subsection (a)(1) may not exceed--
    ``(A) in the case of a program, 12 years; or
    ``(B) in the case of a center within a program, 6
    years.

    [[Page 648]]

    ``(2) Exception.--The periods described in paragraph (1)
    shall not apply to programs receiving point of service
    maintenance and enhancement awards under subsection (a)(2) to
    maintain existing centers and activities.

    ``(i) Inapplicability of Provision.--Notwithstanding any other
    provision of this title, section 791(a) shall not apply to an area
    health education center funded under this section.
    ``(j) Authorization of Appropriations.--
    ``(1) In general.--There is authorized to be appropriated to
    carry out this section $125,000,000 for each of the fiscal years
    2010 through 2014.
    ``(2) Requirements.--Of the amounts appropriated for a
    fiscal year under paragraph (1)--
    ``(A) not more than 35 percent shall be used for
    awards under subsection (a)(1);
    ``(B) not less than 60 percent shall be used for
    awards under subsection (a)(2);
    ``(C) not more than 1 percent shall be used for
    grants and contracts to implement outcomes evaluation
    for the area health education centers; and
    ``(D) not more than 4 percent shall be used for
    grants and contracts to provide technical assistance to
    entities receiving awards under this section.
    ``(3) Carryover funds.--An entity that receives an award
    under this section may carry over funds from 1 fiscal year to
    another without obtaining approval from the Secretary. In no
    case may any funds be carried over pursuant to the preceding
    sentence for more than 3 years.

    ``(k) Sense of Congress.--It is the sense of the Congress that every
    State have an area health education center program in effect under this
    section.''.
    (b) Continuing Educational Support for Health Professionals Serving
    in Underserved Communities.--Part D of title VII of the Public Health
    Service Act (42 U.S.C. 294 et seq.) is amended by striking section
    752 <> and inserting the following:

    ``SEC. 752. CONTINUING EDUCATIONAL SUPPORT FOR HEALTH PROFESSIONALS
    SERVING IN UNDERSERVED COMMUNITIES.

    ``(a) In General. <> --The Secretary shall
    make grants to, and enter into contracts with, eligible entities to
    improve health care, increase retention, increase representation of
    minority faculty members, enhance the practice environment, and provide
    information dissemination and educational support to reduce professional
    isolation through the timely dissemination of research findings using
    relevant resources.

    ``(b) Eligible Entities. <> --For purposes of
    this section, the term `eligible entity' means an entity described in
    section 799(b).

    ``(c) Application.--An eligible entity desiring to receive an award
    under this section shall submit to the Secretary an application at such
    time, in such manner, and containing such information as the Secretary
    may require.
    ``(d) Use of Funds.--An eligible entity shall use amounts awarded
    under a grant or contract under this section to provide

    [[Page 649]]

    innovative supportive activities to enhance education through distance
    learning, continuing educational activities, collaborative conferences,
    and electronic and telelearning activities, with priority for primary
    care.
    ``(e) Authorization.--There is authorized to be appropriated to
    carry out this section $5,000,000 for each of the fiscal years 2010
    through 2014, and such sums as may be necessary for each subsequent
    fiscal year.''.

    SEC. 5404. WORKFORCE DIVERSITY GRANTS.

    Section 821 of the Public Health Service Act (42 U.S.C. 296m) is
    amended--
    (1) in subsection (a)--
    (A) by striking ``The Secretary may'' and inserting
    the following:
    ``(1) Authority.--The Secretary may'';
    (B) by striking ``pre-entry preparation, and
    retention activities'' and inserting the following:
    ``stipends for diploma or associate degree nurses to
    enter a bridge or degree completion program, student
    scholarships or stipends for accelerated nursing degree
    programs, pre-entry preparation, advanced education
    preparation, and retention activities''; and
    (2) in subsection (b)--
    (A) by striking ``First'' and all that follows
    through ``including the'' and inserting ``National
    Advisory Council on Nurse Education and Practice and
    consult with nursing associations including the National
    Coalition of Ethnic Minority Nurse Associations,''; and
    (B) by inserting before the period the following:
    ``, and other organizations determined appropriate by
    the Secretary''.

    SEC. 5405. PRIMARY CARE EXTENSION PROGRAM.

    Part P of title III of the Public Health Service Act (42 U.S.C. 280g
    et seq.), as amended by section 5313, is further amended by adding at
    the end the following:

    ``SEC. 399W. <> PRIMARY CARE EXTENSION PROGRAM.

    ``(a) Establishment, Purpose and Definition.--
    ``(1) In general.--The Secretary, acting through the
    Director of the Agency for Healthcare Research and Quality,
    shall establish a Primary Care Extension Program.
    ``(2) Purpose.--The Primary Care Extension Program shall
    provide support and assistance to primary care providers to
    educate providers about preventive medicine, health promotion,
    chronic disease management, mental and behavioral health
    services (including substance abuse prevention and treatment
    services), and evidence-based and evidence-informed therapies
    and techniques, in order to enable providers to incorporate such
    matters into their practice and to improve community health by
    working with community-based health connectors (referred to in
    this section as `Health Extension Agents').
    ``(3) Definitions.--In this section:
    ``(A) Health extension agent.--The term `Health
    Extension Agent' means any local, community-based health
    worker who facilitates and provides assistance to
    primary care practices by implementing quality
    improvement or

    [[Page 650]]

    system redesign, incorporating the principles of the
    patient-centered medical home to provide high-quality,
    effective, efficient, and safe primary care and to
    provide guidance to patients in culturally and
    linguistically appropriate ways, and linking practices
    to diverse health system resources.
    ``(B) Primary care provider.--The term `primary care
    provider' means a clinician who provides integrated,
    accessible health care services and who is accountable
    for addressing a large majority of personal health care
    needs, including providing preventive and health
    promotion services for men, women, and children of all
    ages, developing a sustained partnership with patients,
    and practicing in the context of family and community,
    as recognized by a State licensing or regulatory
    authority, unless otherwise specified in this section.

    ``(b) Grants To Establish State Hubs and Local Primary Care
    Extension Agencies.--
    ``(1) Grants.--The Secretary shall award competitive grants
    to States for the establishment of State- or multistate-level
    primary care Primary Care Extension Program State Hubs (referred
    to in this section as `Hubs').
    ``(2) Composition of hubs.--A Hub established by a State
    pursuant to paragraph (1)--
    ``(A) shall consist of, at a minimum, the State
    health department, the entity responsible for
    administering the State Medicaid program (if other than
    the State health department), the State-level entity
    administering the Medicare program, and the departments
    of 1 or more health professions schools in the State
    that train providers in primary care; and
    ``(B) may include entities such as hospital
    associations, primary care practice-based research
    networks, health professional societies, State primary
    care associations, State licensing boards, organizations
    with a contract with the Secretary under section 1153 of
    the Social Security Act, consumer groups, and other
    appropriate entities.

    ``(c) State and Local Activities.--
    ``(1) Hub activities.--Hubs established under a grant under
    subsection (b) shall--
    ``(A) <> submit to the Secretary a
    plan to coordinate functions with quality improvement
    organizations and area health education centers if such
    entities are members of the Hub not described in
    subsection (b)(2)(A);
    ``(B) <> contract with a county-
    or local-level entity that shall serve as the Primary
    Care Extension Agency to administer the services
    described in paragraph (2);
    ``(C) organize and administer grant funds to county-
    or local-level Primary Care Extension Agencies that
    serve a catchment area, as determined by the State; and
    ``(D) organize State-wide or multistate networks of
    local-level Primary Care Extension Agencies to share and
    disseminate information and practices.
    ``(2) Local primary care extension agency activities.--
    ``(A) Required activities.--Primary Care Extension
    Agencies established by a Hub under paragraph (1)
    shall--

    [[Page 651]]

    ``(i) assist primary care providers to
    implement a patient-centered medical home to
    improve the accessibility, quality, and efficiency
    of primary care services, including health homes;
    ``(ii) develop and support primary care
    learning communities to enhance the dissemination
    of research findings for evidence-based practice,
    assess implementation of practice improvement,
    share best practices, and involve community
    clinicians in the generation of new knowledge and
    identification of important questions for
    research;
    ``(iii) participate in a national network of
    Primary Care Extension Hubs and propose how the
    Primary Care Extension Agency will share and
    disseminate lessons learned and best practices;
    and
    ``(iv) <> develop a plan for
    financial sustainability involving State, local,
    and private contributions, to provide for the
    reduction in Federal funds that is expected after
    an initial 6-year period of program establishment,
    infrastructure development, and planning.
    ``(B) Discretionary activities.--Primary Care
    Extension Agencies established by a Hub under paragraph
    (1) may--
    ``(i) provide technical assistance, training,
    and organizational support for community health
    teams established under section 3602 of the
    Patient Protection and Affordable Care Act;
    ``(ii) collect data and provision of primary
    care provider feedback from standardized
    measurements of processes and outcomes to aid in
    continuous performance improvement;
    ``(iii) collaborate with local health
    departments, community health centers, tribes and
    tribal entities, and other community agencies to
    identify community health priorities and local
    health workforce needs, and participate in
    community-based efforts to address the social and
    primary determinants of health, strengthen the
    local primary care workforce, and eliminate health
    disparities;
    ``(iv) develop measures to monitor the impact
    of the proposed program on the health of practice
    enrollees and of the wider community served; and
    ``(v) participate in other activities, as
    determined appropriate by the Secretary.

    ``(d) Federal Program Administration.--
    ``(1) Grants; types.--Grants awarded under subsection (b)
    shall be--
    ``(A) program grants, that are awarded to State or
    multistate entities that submit fully-developed plans
    for the implementation of a Hub, for a period of 6
    years; or
    ``(B) planning grants, that are awarded to State or
    multistate entities with the goal of developing a plan
    for a Hub, for a period of 2 years.
    ``(2) Applications.--To be eligible for a grant under
    subsection (b), a State or multistate entity shall submit to the

    [[Page 652]]

    Secretary an application, at such time, in such manner, and
    containing such information as the Secretary may require.
    ``(3) <> Evaluation.--A State that
    receives a grant under subsection (b) shall be evaluated at the
    end of the grant period by an evaluation panel appointed by the
    Secretary.
    ``(4) Continuing support.--After the sixth year in which
    assistance is provided to a State under a grant awarded under
    subsection (b), the State may receive additional support under
    this section if the State program has received satisfactory
    evaluations with respect to program performance and the merits
    of the State sustainability plan, as determined by the
    Secretary.
    ``(5) Limitation.--A State shall not use in excess of 10
    percent of the amount received under a grant to carry out
    administrative activities under this section. Funds awarded
    pursuant to this section shall not be used for funding direct
    patient care.

    ``(e) Requirements on the Secretary. <> --In
    carrying out this section, the Secretary shall consult with the heads of
    other Federal agencies with demonstrated experience and expertise in
    health care and preventive medicine, such as the Centers for Disease
    Control and Prevention, the Substance Abuse and Mental Health
    Administration, the Health Resources and Services Administration, the
    National Institutes of Health, the Office of the National Coordinator
    for Health Information Technology, the Indian Health Service, the
    Agricultural Cooperative Extension Service of the Department of
    Agriculture, and other entities, as the Secretary determines
    appropriate.

    ``(f) Authorization of Appropriations.--To awards grants as provided
    in subsection (d), there are authorized to be appropriated $120,000,000
    for each of fiscal years 2011 and 2012, and such sums as may be
    necessary to carry out this section for each of fiscal years 2013
    through 2014.''.

    Subtitle F--Strengthening Primary Care and Other Workforce Improvements

    SEC. 5501. EXPANDING ACCESS TO PRIMARY CARE SERVICES AND GENERAL SURGERY
    SERVICES.

    (a) Incentive Payment Program for Primary Care Services.--
    (1) In general.--Section 1833 of the Social Security Act (42
    U.S.C. 1395l) is amended by adding at the end the following new
    subsection:

    ``(x) Incentive Payments for Primary Care Services.--
    ``(1) In general. <> --In the case of
    primary care services furnished on or after January 1, 2011, and
    before January 1, 2016, by a primary care practitioner, in
    addition to the amount of payment that would otherwise be made
    for such services under this part, there also shall be paid (on
    a monthly or quarterly basis) an amount equal to 10 percent of
    the payment amount for the service under this part.
    ``(2) Definitions.--In this subsection:
    ``(A) Primary care practitioner.--The term `primary
    care practitioner' means an individual--
    ``(i) who--

    [[Page 653]]

    ``(I) is a physician (as described
    in section 1861(r)(1)) who has a primary
    specialty designation of family
    medicine, internal medicine, geriatric
    medicine, or pediatric medicine; or
    ``(II) is a nurse practitioner,
    clinical nurse specialist, or physician
    assistant (as those terms are defined in
    section 1861(aa)(5)); and
    ``(ii) for whom primary care services
    accounted for at least 60 percent of the allowed
    charges under this part for such physician or
    practitioner in a prior period as determined
    appropriate by the Secretary.
    ``(B) Primary care services.--The term `primary care
    services' means services identified, as of January 1,
    2009, by the following HCPCS codes (and as subsequently
    modified by the Secretary):
    ``(i) 99201 through 99215.
    ``(ii) 99304 through 99340.
    ``(iii) 99341 through 99350.
    ``(3) <> Coordination with other
    payments.--The amount of the additional payment for a service
    under this subsection and subsection (m) shall be determined
    without regard to any additional payment for the service under
    subsection (m) and this subsection, respectively.
    ``(4) Limitation on review.--There shall be no
    administrative or judicial review under section 1869, 1878, or
    otherwise, respecting the identification of primary care
    practitioners under this subsection.''.
    (2) Conforming amendment.--Section 1834(g)(2)(B) of the
    Social Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by
    adding at the end the following sentence: ``Section 1833(x)
    shall not be taken into account in determining the amounts that
    would otherwise be paid pursuant to the preceding sentence.''.

    (b) Incentive Payment Program for Major Surgical Procedures
    Furnished in Health Professional Shortage Areas.--
    (1) In general. <> --Section 1833 of the
    Social Security Act (42 U.S.C. 1395l), as amended by subsection
    (a)(1), is amended by adding at the end the following new
    subsection:

    ``(y) Incentive Payments for Major Surgical Procedures Furnished in
    Health Professional Shortage Areas.--
    ``(1) In general.--In the case of major surgical procedures
    furnished on or after January 1, 2011, and before January 1,
    2016, by a general surgeon in an area that is designated (under
    section 332(a)(1)(A) of the Public Health Service Act) as a
    health professional shortage area as identified by the Secretary
    prior to the beginning of the year involved, in addition to the
    amount of payment that would otherwise be made for such services
    under this part, there also shall be paid (on a monthly or
    quarterly basis) an amount equal to 10 percent of the payment
    amount for the service under this part.
    ``(2) Definitions.--In this subsection:
    ``(A) General surgeon.--In this subsection, the term
    `general surgeon' means a physician (as described in
    section 1861(r)(1)) who has designated CMS specialty
    code 02-General Surgery as their primary specialty code
    in the physician's enrollment under section 1866(j).
    ``(B) Major surgical procedures.--The term `major
    surgical procedures' means physicians' services which
    are

    [[Page 654]]

    surgical procedures for which a 10-day or 90-day global
    period is used for payment under the fee schedule under
    section 1848(b).
    ``(3) Coordination with other payments.--The amount of the
    additional payment for a service under this subsection and
    subsection (m) shall be determined without regard to any
    additional payment for the service under subsection (m) and this
    subsection, respectively.
    ``(4) Application.--The provisions of paragraph (2) and (4)
    of subsection (m) shall apply to the determination of additional
    payments under this subsection in the same manner as such
    provisions apply to the determination of additional payments
    under subsection (m).''.
    (2) Conforming amendment.--Section 1834(g)(2)(B) of the
    Social Security Act (42 U.S.C. 1395m(g)(2)(B)), as amended by
    subsection (a)(2), is amended by striking ``Section 1833(x)''
    and inserting ``Subsections (x) and (y) of section 1833'' in the
    last sentence.

    (c) Budget-neutrality Adjustment.--Section 1848(c)(2)(B) of the
    Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)) is amended by adding at
    the end the following new clause:
    ``(vii) Adjustment for certain physician
    incentive payments. <> --
    Fifty percent of the additional expenditures under
    this part attributable to subsections (x) and (y)
    of section 1833 for a year (as estimated by the
    Secretary) shall be taken into account in applying
    clause (ii)(II) for 2011 and subsequent years. In
    lieu of applying the budget-neutrality adjustments
    required under clause (ii)(II) to relative value
    units to account for such costs for the year, the
    Secretary shall apply such budget-neutrality
    adjustments to the conversion factor otherwise
    determined for the year. For 2011 and subsequent
    years, the Secretary shall increase the incentive
    payment otherwise applicable under section 1833(m)
    by a percent estimated to be equal to the
    additional expenditures estimated under the first
    sentence of this clause for such year that is
    applicable to physicians who primarily furnish
    services in areas designated (under section
    332(a)(1)(A) of the Public Health Service Act) as
    health professional shortage areas.''.

    SEC. 5502. MEDICARE FEDERALLY QUALIFIED HEALTH CENTER IMPROVEMENTS.

    (a)  Expansion of Medicare-Covered Preventive Services at Federally
    Qualified Health Centers.--
    (1) In general.--Section 1861(aa)(3)(A) of the Social
    Security Act <> (42 U.S.C. 1395w
    (aa)(3)(A)) is amended to read as follows:
    ``(A) services of the type described subparagraphs
    (A) through (C) of paragraph (1) and preventive services
    (as defined in section 1861(ddd)(3)); and''.
    (2) Effective date. <> --The amendment made by paragraph (1) shall apply to
    services furnished on or after January 1, 2011.

    (b) Prospective Payment System for Federally Qualified Health
    Centers.--Section 1834 of the Social Security Act (42

    [[Page 655]]

    U.S.C. 1395m) is amended by adding at the end the following new
    subsection:
    ``(n) Development and Implementation of Prospective Payment
    System.--
    ``(1) Development.--
    ``(A) In general.--The Secretary shall develop a
    prospective payment system for payment for Federally
    qualified health services furnished by Federally
    qualified health centers under this title. Such system
    shall include a process for appropriately describing the
    services furnished by Federally qualified health
    centers.
    ``(B) Collection of data and evaluation.--The
    Secretary shall require Federally qualified health
    centers to submit to the Secretary such information as
    the Secretary may require in order to develop and
    implement the prospective payment system under this
    paragraph and paragraph (2), respectively, including the
    reporting of services using HCPCS codes.
    ``(2) Implementation.--
    ``(A) In general. <> --
    Notwithstanding section 1833(a)(3)(B), the Secretary
    shall provide, for cost reporting periods beginning on
    or after October 1, 2014, for payments for Federally
    qualified health services furnished by Federally
    qualified health centers under this title in accordance
    with the prospective payment system developed by the
    Secretary under paragraph (1).
    ``(B) Payments.--
    ``(i) Initial payments.--The Secretary shall
    implement such prospective payment system so that
    the estimated amount of expenditures under this
    title for Federally qualified health services in
    the first year that the prospective payment system
    is implemented is equal to 103 percent of the
    estimated amount of expenditures under this title
    that would have occurred for such services in such
    year if the system had not been implemented.
    ``(ii) Payments in subsequent years.--In the
    year after the first year of implementation of
    such system, and in each subsequent year, the
    payment rate for Federally qualified health
    services furnished in the year shall be equal to
    the payment rate established for such services
    furnished in the preceding year under this
    subparagraph increased by the percentage increase
    in the MEI (as defined in 1842(i)(3)) for the year
    involved.''.

    SEC. 5503. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

    (a) In General.--Section 1886(h) of the Social Security Act (42
    U.S.C. 1395ww(h)) is amended--
    (1) in paragraph (4)(F)(i), by striking ``paragraph (7)''
    and inserting ``paragraphs (7) and (8)'';
    (2) in paragraph (4)(H)(i), by striking ``paragraph (7)''
    and inserting ``paragraphs (7) and (8)'';
    (3) in paragraph (7)(E), by inserting ``or paragraph (8)''
    before the period at the end; and
    (4) by adding at the end the following new paragraph:
    ``(8) Distribution of additional residency positions.--

    [[Page 656]]

    ``(A) Reductions in limit based on unused
    positions.--
    ``(i) <> In general.--
    Except as provided in clause (ii), if a hospital's
    reference resident level (as defined in
    subparagraph (H)(i)) is less than the otherwise
    applicable resident limit (as defined in
    subparagraph (H)(iii)), effective for portions of
    cost reporting periods occurring on or after July
    1, 2011, the otherwise applicable resident limit
    shall be reduced by 65 percent of the difference
    between such otherwise applicable resident limit
    and such reference resident level.
    ``(ii) Exceptions.--This subparagraph shall
    not apply to--
    ``(I) a hospital located in a rural
    area (as defined in subsection
    (d)(2)(D)(ii)) with fewer than 250 acute
    care inpatient beds;
    ``(II) <> a
    hospital that was part of a qualifying
    entity which had a voluntary residency
    reduction plan approved under paragraph
    (6)(B) or under the authority of section
    402 of Public Law 90-248, if the
    hospital demonstrates to the Secretary
    that it has a specified plan in place
    for filling the unused positions by not
    later than 2 years after the date of
    enactment of this paragraph; or
    ``(III) a hospital described in
    paragraph (4)(H)(v).
    ``(B) Distribution.--
    ``(i) In general.--The Secretary shall
    increase the otherwise applicable resident limit
    for each qualifying hospital that submits an
    application under this subparagraph by such number
    as the Secretary may approve for portions of cost
    reporting periods occurring on or after July 1,
    2011. The aggregate number of increases in the
    otherwise applicable resident limit under this
    subparagraph shall be equal to the aggregate
    reduction in such limits attributable to
    subparagraph (A) (as estimated by the Secretary).
    ``(ii) Requirements.--Subject to clause (iii),
    a hospital that receives an increase in the
    otherwise applicable resident limit under this
    subparagraph shall ensure, during the 5-year
    period beginning on the date of such increase,
    that--
    ``(I) the number of full-time
    equivalent primary care residents, as
    defined in paragraph (5)(H) (as
    determined by the Secretary), excluding
    any additional positions under subclause
    (II), is not less than the average
    number of full-time equivalent primary
    care residents (as so determined) during
    the 3 most recent cost reporting periods
    ending prior to the date of enactment of
    this paragraph; and
    ``(II) not less than 75 percent of
    the positions attributable to such
    increase are in a primary care or
    general surgery residency (as determined
    by the Secretary).

    [[Page 657]]

    The Secretary may determine whether a hospital has
    met the requirements under this clause during such
    5-year period in such manner and at such time as
    the Secretary determines appropriate, including at
    the end of such 5-year period.
    ``(iii) Redistribution of positions if
    hospital no longer meets certain requirements.--In
    the case where the Secretary determines that a
    hospital described in clause (ii) does not meet
    either of the requirements under subclause (I) or
    (II) of such clause, the Secretary shall--
    ``(I) reduce the otherwise
    applicable resident limit of the
    hospital by the amount by which such
    limit was increased under this
    paragraph; and
    ``(II) provide for the distribution
    of positions attributable to such
    reduction in accordance with the
    requirements of this paragraph.
    ``(C) Considerations in redistribution.--In
    determining for which hospitals the increase in the
    otherwise applicable resident limit is provided under
    subparagraph (B), the Secretary shall take into
    account--
    ``(i) <> the
    demonstration likelihood of the hospital filling
    the positions made available under this paragraph
    within the first 3 cost reporting periods
    beginning on or after July 1, 2011, as determined
    by the Secretary; and
    ``(ii) whether the hospital has an accredited
    rural training track (as described in paragraph
    (4)(H)(iv)).
    ``(D) Priority for certain areas.--In determining
    for which hospitals the increase in the otherwise
    applicable resident limit is provided under subparagraph
    (B), subject to subparagraph (E), the Secretary shall
    distribute the increase to hospitals based on the
    following factors:
    ``(i) Whether the hospital is located in a
    State with a resident-to-population ratio in the
    lowest quartile (as determined by the Secretary).
    ``(ii) Whether the hospital is located in a
    State, a territory of the United States, or the
    District of Columbia that is among the top 10
    States, territories, or Districts in terms of the
    ratio of--
    ``(I) the total population of the
    State, territory, or District living in
    an area designated (under such section
    332(a)(1)(A)) as a health professional
    shortage area (as of the date of
    enactment of this paragraph); to
    ``(II) the total population of the
    State, territory, or District (as
    determined by the Secretary based on the
    most recent available population data
    published by the Bureau of the Census).
    ``(iii) Whether the hospital is located in a
    rural area (as defined in subsection
    (d)(2)(D)(ii)).
    ``(E) Reservation of positions for certain
    hospitals.--
    ``(i) In general.--Subject to clause (ii), the
    Secretary shall reserve the positions available
    for distribution under this paragraph as follows:

    [[Page 658]]

    ``(I) 70 percent of such positions
    for distribution to hospitals described
    in clause (i) of subparagraph (D).
    ``(II) 30 percent of such positions
    for distribution to hospitals described
    in clause (ii) and (iii) of such
    subparagraph.
    ``(ii) Exception if positions not
    redistributed by july 1,
    2011. <> --In the case where the
    Secretary does not distribute positions to
    hospitals in accordance with clause (i) by July 1,
    2011, the Secretary shall distribute such
    positions to other hospitals in accordance with
    the considerations described in subparagraph (C)
    and the priority described in subparagraph (D).
    ``(F) Limitation.--A hospital may not receive more
    than 75 full-time equivalent additional residency
    positions under this paragraph.
    ``(G) Application of per resident amounts for
    primary care and nonprimary care.--With respect to
    additional residency positions in a hospital
    attributable to the increase provided under this
    paragraph, the approved FTE per resident amounts are
    deemed to be equal to the hospital per resident amounts
    for primary care and nonprimary care computed under
    paragraph (2)(D) for that hospital.
    ``(H) Definitions.--In this paragraph:
    ``(i) Reference resident level.--The term
    `reference resident level' means, with respect to
    a hospital, the highest resident level for any of
    the 3 most recent cost reporting periods (ending
    before the date of the enactment of this
    paragraph) of the hospital for which a cost report
    has been settled (or, if not, submitted (subject
    to audit)), as determined by the Secretary.
    ``(ii) Resident level.--The term `resident
    level' has the meaning given such term in
    paragraph (7)(C)(i).
    ``(iii) Otherwise applicable resident limit.--
    The term `otherwise applicable resident limit'
    means, with respect to a hospital, the limit
    otherwise applicable under subparagraphs (F)(i)
    and (H) of paragraph (4) on the resident level for
    the hospital determined without regard to this
    paragraph but taking into account paragraph
    (7)(A).''.

    (b) IME.--
    (1) In general.--Section 1886(d)(5)(B)(v) of the Social
    Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second
    sentence, is amended--
    (A) by striking ``subsection (h)(7)'' and inserting
    ``subsections (h)(7) and (h)(8)''; and
    (B) by striking ``it applies'' and inserting ``they
    apply''.
    (2) Conforming amendment.--Section 1886(d)(5)(B) of the
    Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by
    adding at the end the following clause:
    ``(x) <> For discharges occurring on
    or after July 1, 2011, insofar as an additional payment amount
    under this subparagraph is attributable to resident positions
    distributed to a hospital under subsection (h)(8)(B), the
    indirect teaching adjustment factor shall be computed in the
    same manner as provided under clause (ii) with respect to such
    resident positions.''.

    [[Page 659]]

    (c) Conforming Amendment.--Section 422(b)(2) of the Medicare
    Prescription Drug, Improvement, and Modernization Act of 2003 (Public
    Law 108-173) <> is amended by striking
    ``section 1886(h)(7)'' and all that follows and inserting ``paragraphs
    (7) and (8) of subsection (h) of section 1886 of the Social Security
    Act''.

    SEC. 5504. <>  COUNTING RESIDENT TIME IN
    NONPROVIDER SETTINGS.

    (a) GME.--Section 1886(h)(4)(E) of the Social Security Act (42
    U.S.C. 1395ww(h)(4)(E)) is amended--
    (1) by striking ``shall be counted and that all the time''
    and inserting ``shall be counted and that--
    ``(i) effective for cost reporting periods
    beginning before July 1, 2010, all the time;'';
    (2) in clause (i), as inserted by paragraph (1), by striking
    the period at the end and inserting ``; and'';
    (3) by inserting after clause (i), as so inserted, the
    following new clause:
    ``(ii) effective for cost reporting periods
    beginning on or after July 1, 2010, all the time
    so spent by a resident shall be counted towards
    the determination of full-time equivalency,
    without regard to the setting in which the
    activities are performed, if a hospital incurs the
    costs of the stipends and fringe benefits of the
    resident during the time the resident spends in
    that setting. If more than one hospital incurs
    these costs, either directly or through a third
    party, such hospitals shall count a proportional
    share of the time, as determined by written
    agreement between the hospitals, that a resident
    spends training in that setting.''; and
    (4) <> by adding at the end the following
    flush sentence:
    ``Any hospital claiming under this subparagraph for time
    spent in a nonprovider setting shall maintain and make
    available to the Secretary records regarding the amount
    of such time and such amount in comparison with amounts
    of such time in such base year as the Secretary shall
    specify.''.

    (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42
    U.S.C. 1395ww(d)(5)) is amended--
    (1) by striking ``(iv) Effective for discharges occurring on
    or after October 1, 1997'' and inserting <> ``(iv)(I) Effective for discharges occurring on or
    after October 1, 1997, and before July 1, 2010''; and
    (2) by inserting after clause (I), as inserted by paragraph
    (1), the following new subparagraph:
    ``(II) Effective for discharges occurring on or after July
    1, 2010, all the time spent by an intern or resident in patient
    care activities in a nonprovider setting shall be counted
    towards the determination of full-time equivalency if a hospital
    incurs the costs of the stipends and fringe benefits of the
    intern or resident during the time the intern or resident spends
    in that setting. If more than one hospital incurs these costs,
    either directly or through a third party, such hospitals shall
    count a proportional share of the time, as determined by written
    agreement between the hospitals, that a resident spends training
    in that setting.''.

    [[Page 660]]

    (c) Application. <> --The amendments made
    by this section shall not be applied in a manner that requires reopening
    of any settled hospital cost reports as to which there is not a
    jurisdictionally proper appeal pending as of the date of the enactment
    of this Act on the issue of payment for indirect costs of medical
    education under section 1886(d)(5)(B) of the Social Security Act (42
    U.S.C. 1395ww(d)(5)(B)) or for direct graduate medical education costs
    under section 1886(h) of such Act (42 U.S.C. 1395ww(h)).

    SEC. 5505. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY
    ACTIVITIES AND OTHER ACTIVITIES.

    (a) GME.--Section 1886(h) of the Social Security Act (42 U.S.C.
    1395ww(h)), as amended by section 5504, is amended--
    (1) in paragraph (4)--
    (A) in subparagraph (E), by striking ``Such rules''
    and inserting ``Subject to subparagraphs (J) and (K),
    such rules''; and
    (B) by adding at the end the following new
    subparagraphs:
    ``(J) Treatment of certain nonprovider and didactic
    activities.--Such rules shall provide that all time
    spent by an intern or resident in an approved medical
    residency training program in a nonprovider setting that
    is primarily engaged in furnishing patient care (as
    defined in paragraph (5)(K)) in non-patient care
    activities, such as didactic conferences and seminars,
    but not including research not associated with the
    treatment or diagnosis of a particular patient, as such
    time and activities are defined by the Secretary, shall
    be counted toward the determination of full-time
    equivalency.
    ``(K) <> Treatment of certain
    other activities.--In determining the hospital's number
    of full-time equivalent residents for purposes of this
    subsection, all the time that is spent by an intern or
    resident in an approved medical residency training
    program on vacation, sick leave, or other approved
    leave, as such time is defined by the Secretary, and
    that does not prolong the total time the resident is
    participating in the approved program beyond the normal
    duration of the program shall be counted toward the
    determination of full-time equivalency.''; and
    (2) in paragraph (5), by adding at the end the following new
    subparagraph:
    ``(K) Nonprovider setting that is primarily engaged
    in furnishing patient care.--The term `nonprovider
    setting that is primarily engaged in furnishing patient
    care' means a nonprovider setting in which the primary
    activity is the care and treatment of patients, as
    defined by the Secretary.''.

    (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42
    U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following
    new clause:
    ``(x)(I) <> The
    provisions of subparagraph (K) of subsection
    (h)(4) shall apply under this subparagraph in the
    same manner as they apply under such subsection.
    ``(II) In determining the hospital's number of
    full-time equivalent residents for purposes of
    this subparagraph, all the time spent by an intern
    or resident

    [[Page 661]]

    in an approved medical residency training program
    in non-patient care activities, such as didactic
    conferences and seminars, as such time and
    activities are defined by the Secretary, that
    occurs in the hospital shall be counted toward the
    determination of full-time equivalency if the
    hospital--
    ``(aa) is recognized as a subsection
    (d) hospital;
    ``(bb) is recognized as a subsection
    (d) Puerto Rico hospital;
    ``(cc) is reimbursed under a
    reimbursement system authorized under
    section 1814(b)(3); or
    ``(dd) is a provider-based hospital
    outpatient department.
    ``(III) In determining the hospital's number
    of full-time equivalent residents for purposes of
    this subparagraph, all the time spent by an intern
    or resident in an approved medical residency
    training program in research activities that are
    not associated with the treatment or diagnosis of
    a particular patient, as such time and activities
    are defined by the Secretary, shall not be counted
    toward the determination of full-time
    equivalency.''.

    (c) <>  Effective Dates.--
    (1) In general.--Except as otherwise provided, the Secretary
    of Health and Human Services shall implement the amendments made
    by this section in a manner so as to apply to cost reporting
    periods beginning on or after January 1, 1983.
    (2) GME.--Section 1886(h)(4)(J) of the Social Security Act,
    as added by subsection (a)(1)(B), shall apply to cost reporting
    periods beginning on or after July 1, 2009.
    (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social
    Security Act, as added by subsection (b), shall apply to cost
    reporting periods beginning on or after October 1, 2001. Such
    section, as so added, shall not give rise to any inference as to
    how the law in effect prior to such date should be interpreted.

    SEC. 5506. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED HOSPITALS.

    (a) GME.--Section 1886(h)(4)(H) of the Social Security Act (42
    U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the
    following new clause:
    ``(vi) Redistribution of residency slots after
    a hospital closes.--
    ``(I) <> In
    general.--Subject to the succeeding
    provisions of this clause, the Secretary
    shall, by regulation, establish a
    process under which, in the case where a
    hospital (other than a hospital
    described in clause (v)) with an
    approved medical residency program
    closes on or after a date that is 2
    years before the date of enactment of
    this clause, the Secretary shall
    increase the otherwise applicable
    resident limit under this paragraph for
    other hospitals in accordance with this
    clause.
    ``(II) Priority for hospitals in
    certain areas.--Subject to the
    succeeding provisions of this clause, in
    determining for which hospitals the

    [[Page 662]]

    increase in the otherwise applicable
    resident limit is provided under such
    process, the Secretary shall distribute
    the increase to hospitals in the
    following priority order (with
    preference given within each category to
    hospitals that are members of the same
    affiliated group (as defined by the
    Secretary under clause (ii)) as the
    closed hospital):
    ``(aa) First, to hospitals
    located in the same core-based
    statistical area as, or a core-
    based statistical area
    contiguous to, the hospital that
    closed.
    ``(bb) Second, to hospitals
    located in the same State as the
    hospital that closed.
    ``(cc) Third, to hospitals
    located in the same region of
    the country as the hospital that
    closed.
    ``(dd) Fourth, only if the
    Secretary is not able to
    distribute the increase to
    hospitals described in item
    (cc), to qualifying hospitals in
    accordance with the provisions
    of paragraph (8).
    ``(III) Requirement hospital likely
    to fill position within certain time
    period. <> --The
    Secretary may only increase the
    otherwise applicable resident limit of a
    hospital under such process if the
    Secretary determines the hospital has
    demonstrated a likelihood of filling the
    positions made available under this
    clause within 3 years.
    ``(IV) Limitation.--The aggregate
    number of increases in the otherwise
    applicable resident limits for hospitals
    under this clause shall be equal to the
    number of resident positions in the
    approved medical residency programs that
    closed on or after the date described in
    subclause (I).
    ``(V) Administration.--Chapter 35 of
    title 44, United States Code, shall not
    apply to the implementation of this
    clause.''.

    (b) IME.--Section 1886(d)(5)(B)(v) of the Social Security Act (42
    U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, as amended by
    section 5503, is amended by striking ``subsections (h)(7) and (h)(8)''
    and inserting ``subsections (h)(4)(H)(vi), (h)(7), and (h)(8)''.
    (c) <> Application.--The amendments made
    by this section shall not be applied in a manner that requires reopening
    of any settled hospital cost reports as to which there is not a
    jurisdictionally proper appeal pending as of the date of the enactment
    of this Act on the issue of payment for indirect costs of medical
    education under section 1886(d)(5)(B) of the Social Security Act (42
    U.S.C. 1395ww(d)(5)(B)) or for direct graduate medical education costs
    under section 1886(h) of such Act (42 U.S.C. Section 1395ww(h)).

    (d) <> Effect on Temporary FTE Cap
    Adjustments.--The Secretary of Health and Human Services shall give
    consideration to the effect of the amendments made by this section on
    any temporary adjustment to a hospital's FTE cap under section 413.79(h)
    of title 42, Code of Federal Regulations (as in effect on the date of
    enactment of this Act) in order to ensure that there is no duplication
    of FTE slots. Such amendments shall not affect the

    [[Page 663]]

    application of section 1886(h)(4)(H)(v) of the Social Security Act (42
    U.S.C. 1395ww(h)(4)(H)(v)).

    (e) Conforming Amendment.--Section 1886(h)(7)(E) of the Social
    Security Act (42 U.S.C. 1395ww(h)(7)(E)), as amended by section 5503(a),
    is amended by striking ``paragraph or paragraph (8)'' and inserting
    ``this paragraph, paragraph (8), or paragraph (4)(H)(vi)''.

    SEC. 5507. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFESSIONS
    WORKFORCE NEEDS; EXTENSION OF FAMILY-TO-FAMILY HEALTH
    INFORMATION CENTERS.

    (a) Authority To Conduct Demonstration Projects.--Title XX of the
    Social Security Act (42 U.S.C. 1397 et seq.) is amended by adding at the
    end the following:

    ``SEC. 2008. <> DEMONSTRATION PROJECTS TO ADDRESS
    HEALTH PROFESSIONS WORKFORCE NEEDS.

    ``(a) Demonstration Projects To Provide Low-Income Individuals With
    Opportunities for Education, Training, and Career Advancement To Address
    Health Professions Workforce Needs.--
    ``(1) Authority to award grants.--The Secretary, in
    consultation with the Secretary of Labor, shall award grants to
    eligible entities to conduct demonstration projects that are
    designed to provide eligible individuals with the opportunity to
    obtain education and training for occupations in the health care
    field that pay well and are expected to either experience labor
    shortages or be in high demand.
    ``(2) Requirements.--
    ``(A) Aid and supportive services.--
    ``(i) In general.--A demonstration project
    conducted by an eligible entity awarded a grant
    under this section shall, if appropriate, provide
    eligible individuals participating in the project
    with financial aid, child care, case management,
    and other supportive services.
    ``(ii) Treatment.--Any aid, services, or
    incentives provided to an eligible beneficiary
    participating in a demonstration project under
    this section shall not be considered income, and
    shall not be taken into account for purposes of
    determining the individual's eligibility for, or
    amount of, benefits under any means-tested
    program.
    ``(B) Consultation and coordination.--An eligible
    entity applying for a grant to carry out a demonstration
    project under this section shall demonstrate in the
    application that the entity has consulted with the State
    agency responsible for administering the State TANF
    program, the local workforce investment board in the
    area in which the project is to be conducted (unless the
    applicant is such board), the State workforce investment
    board established under section 111 of the Workforce
    Investment Act of 1998, and the State Apprenticeship
    Agency recognized under the Act of August 16, 1937
    (commonly known as the `National Apprenticeship Act')
    (or if no agency has been recognized in the State, the
    Office of Apprenticeship of the Department of Labor) and
    that the project will be carried out in coordination
    with such entities.

    [[Page 664]]

    ``(C) Assurance of opportunities for indian
    populations. <> --The Secretary shall
    award at least 3 grants under this subsection to an
    eligible entity that is an Indian tribe, tribal
    organization, or Tribal College or University.
    ``(3) Reports and evaluation.--
    ``(A) Eligible entities.--An eligible entity awarded
    a grant to conduct a demonstration project under this
    subsection shall submit interim reports to the Secretary
    on the activities carried out under the project and a
    final report on such activities upon the conclusion of
    the entities' participation in the project. Such reports
    shall include assessments of the effectiveness of such
    activities with respect to improving outcomes for the
    eligible individuals participating in the project and
    with respect to addressing health professions workforce
    needs in the areas in which the project is conducted.
    ``(B) <> Evaluation.--The
    Secretary shall, by grant, contract, or interagency
    agreement, evaluate the demonstration projects conducted
    under this subsection. Such evaluation shall include
    identification of successful activities for creating
    opportunities for developing and sustaining,
    particularly with respect to low-income individuals and
    other entry-level workers, a health professions
    workforce that has accessible entry points, that meets
    high standards for education, training, certification,
    and professional development, and that provides
    increased wages and affordable benefits, including
    health care coverage, that are responsive to the
    workforce's needs.
    ``(C) Report to congress.--The Secretary shall
    submit interim reports and, based on the evaluation
    conducted under subparagraph (B), a final report to
    Congress on the demonstration projects conducted under
    this subsection.
    ``(4) Definitions.--In this subsection:
    ``(A) Eligible entity.--The term `eligible entity'
    means a State, an Indian tribe or tribal organization,
    an institution of higher education, a local workforce
    investment board established under section 117 of the
    Workforce Investment Act of 1998, a sponsor of an
    apprenticeship program registered under the National
    Apprenticeship Act or a community-based organization.
    ``(B) Eligible individual.--
    ``(i) In general.--The term `eligible
    individual' means a individual receiving
    assistance under the State TANF program.
    ``(ii) Other low-income individuals.--Such
    term may include other low-income individuals
    described by the eligible entity in its
    application for a grant under this section.
    ``(C) Indian tribe; tribal organization.--The terms
    `Indian tribe' and `tribal organization' have the
    meaning given such terms in section 4 of the Indian
    Self-Determination and Education Assistance Act (25
    U.S.C. 450b).
    ``(D) Institution of higher education.--The term
    `institution of higher education' has the meaning given
    that term in section 101 of the Higher Education Act of
    1965 (20 U.S.C. 1001).

    [[Page 665]]

    ``(E) State.--The term `State' means each of the 50
    States, the District of Columbia, the Commonwealth of
    Puerto Rico, the United States Virgin Islands, Guam, and
    American Samoa.
    ``(F) State tanf program.--The term `State TANF
    program' means the temporary assistance for needy
    families program funded under part A of title IV.
    ``(G) Tribal college or university.--The term
    `Tribal College or University' has the meaning given
    that term in section 316(b) of the Higher Education Act
    of 1965 (20 U.S.C. 1059c(b)).

    ``(b) Demonstration Project To Develop Training and Certification
    Programs for Personal or Home Care Aides.--
    ``(1) Authority to award grants. <> --Not
    later than 18 months after the date of enactment of this
    section, the Secretary shall award grants to eligible entities
    that are States to conduct demonstration projects for purposes
    of developing core training competencies and certification
    programs for personal or home care aides. The Secretary shall--
    ``(A) <> evaluate the efficacy of
    the core training competencies described in paragraph
    (3)(A) for newly hired personal or home care aides and
    the methods used by States to implement such core
    training competencies in accordance with the issues
    specified in paragraph (3)(B); and
    ``(B) ensure that the number of hours of training
    provided by States under the demonstration project with
    respect to such core training competencies are not less
    than the number of hours of training required under any
    applicable State or Federal law or regulation.
    ``(2) Duration.--A demonstration project shall be conducted
    under this subsection for not less than 3 years.
    ``(3) Core training competencies for personal or home care
    aides.--
    ``(A) In general.--The core training competencies
    for personal or home care aides described in this
    subparagraph include competencies with respect to the
    following areas:
    ``(i) The role of the personal or home care
    aide (including differences between a personal or
    home care aide employed by an agency and a
    personal or home care aide employed directly by
    the health care consumer or an independent
    provider).
    ``(ii) Consumer rights, ethics, and
    confidentiality (including the role of proxy
    decision-makers in the case where a health care
    consumer has impaired decision-making capacity).
    ``(iii) Communication, cultural and linguistic
    competence and sensitivity, problem solving,
    behavior management, and relationship skills.
    ``(iv) Personal care skills.
    ``(v) Health care support.
    ``(vi) Nutritional support.
    ``(vii) Infection control.
    ``(viii) Safety and emergency training.
    ``(ix) Training specific to an individual
    consumer's needs (including older individuals,
    younger individuals with disabilities, individuals
    with developmental

    [[Page 666]]

    disabilities, individuals with dementia, and
    individuals with mental and behavioral health
    needs).
    ``(x) Self-Care.
    ``(B) Implementation.--The implementation issues
    specified in this subparagraph include the following:
    ``(i) The length of the training.
    ``(ii) The appropriate trainer to student
    ratio.
    ``(iii) The amount of instruction time spent
    in the classroom as compared to on-site in the
    home or a facility.
    ``(iv) Trainer qualifications.
    ``(v) Content for a `hands-on' and written
    certification exam.
    ``(vi) Continuing education requirements.
    ``(4) Application and selection criteria.--
    ``(A) In general.--
    ``(i) Number of
    states. <> --The Secretary shall
    enter into agreements with not more than 6 States
    to conduct demonstration projects under this
    subsection.
    ``(ii) Requirements for states.--An agreement
    entered into under clause (i) shall require that a
    participating State--
    ``(I) implement the core training
    competencies described in paragraph
    (3)(A); and
    ``(II) develop written materials and
    protocols for such core training
    competencies, including the development
    of a certification test for personal or
    home care aides who have completed such
    training competencies.
    ``(iii) Consultation and collaboration with
    community and vocational colleges.--The Secretary
    shall encourage participating States to consult
    with community and vocational colleges regarding
    the development of curricula to implement the
    project with respect to activities, as applicable,
    which may include consideration of such colleges
    as partners in such implementation.
    ``(B) Application and eligibility.--A State seeking
    to participate in the project shall--
    ``(i) submit an application to the Secretary
    containing such information and at such time as
    the Secretary may specify;
    ``(ii) meet the selection criteria established
    under subparagraph (C); and
    ``(iii) meet such additional criteria as the
    Secretary may specify.
    ``(C) Selection criteria.--In selecting States to
    participate in the program, the Secretary shall
    establish criteria to ensure (if applicable with respect
    to the activities involved)--
    ``(i) geographic and demographic diversity;
    ``(ii) that participating States offer medical
    assistance for personal care services under the
    State Medicaid plan;
    ``(iii) that the existing training standards
    for personal or home care aides in each
    participating State--

    [[Page 667]]

    ``(I) are different from such
    standards in the other participating
    States; and
    ``(II) are different from the core
    training competencies described in
    paragraph (3)(A);
    ``(iv) that participating States do not reduce
    the number of hours of training required under
    applicable State law or regulation after being
    selected to participate in the project; and
    ``(v) that participating States recruit a
    minimum number of eligible health and long-term
    care providers to participate in the project.
    ``(D) Technical assistance.--The Secretary shall
    provide technical assistance to States in developing
    written materials and protocols for such core training
    competencies.
    ``(5) Evaluation and report.--
    ``(A) <> Evaluation.--The
    Secretary shall develop an experimental or control group
    testing protocol in consultation with an independent
    evaluation contractor selected by the Secretary. Such
    contractor shall evaluate--
    ``(i) the impact of core training competencies
    described in paragraph (3)(A), including curricula
    developed to implement such core training
    competencies, for personal or home care aides
    within each participating State on job
    satisfaction, mastery of job skills, beneficiary
    and family caregiver satisfaction with services,
    and additional measures determined by the
    Secretary in consultation with the expert panel;
    ``(ii) the impact of providing such core
    training competencies on the existing training
    infrastructure and resources of States; and
    ``(iii) whether a minimum number of hours of
    initial training should be required for personal
    or home care aides and, if so, what minimum number
    of hours should be required.
    ``(B) Reports.--
    ``(i) Report on initial implementation.--Not
    later than 2 years after the date of enactment of
    this section, the Secretary shall submit to
    Congress a report on the initial implementation of
    activities conducted under the demonstration
    project, including any available results of the
    evaluation conducted under subparagraph (A) with
    respect to such activities, together with such
    recommendations for legislation or administrative
    action as the Secretary determines appropriate.
    ``(ii) Final report.--Not later than 1 year
    after the completion of the demonstration project,
    the Secretary shall submit to Congress a report
    containing the results of the evaluation conducted
    under subparagraph (A), together with such
    recommendations for legislation or administrative
    action as the Secretary determines appropriate.
    ``(6) Definitions.--In this subsection:
    ``(A) Eligible health and long-term care provider.--
    The term `eligible health and long-term care provider'
    means a personal or home care agency (including personal
    or home care public authorities), a nursing home, a home
    health agency (as defined in section 1861(o)), or

    [[Page 668]]

    any other health care provider the Secretary determines
    appropriate which--
    ``(i) is licensed or authorized to provide
    services in a participating State; and
    ``(ii) receives payment for services under
    title XIX.
    ``(B) Personal care services.--The term `personal
    care services' has the meaning given such term for
    purposes of title XIX.
    ``(C) Personal or home care aide.--The term
    `personal or home care aide' means an individual who
    helps individuals who are elderly, disabled, ill, or
    mentally disabled (including an individual with
    Alzheimer's disease or other dementia) to live in their
    own home or a residential care facility (such as a
    nursing home, assisted living facility, or any other
    facility the Secretary determines appropriate) by
    providing routine personal care services and other
    appropriate services to the individual.
    ``(D) State.--The term `State' has the meaning given
    that term for purposes of title XIX.

    ``(c) Funding.--
    ``(1) In general.--Subject to paragraph (2), out of any
    funds in the Treasury not otherwise appropriated, there are
    appropriated to the Secretary to carry out subsections (a) and
    (b), $85,000,000 for each of fiscal years 2010 through 2014.
    ``(2) Training and certification programs for personal and
    home care aides.--With respect to the demonstration projects
    under subsection (b), the Secretary shall use $5,000,000 of the
    amount appropriated under paragraph (1) for each of fiscal years
    2010 through 2012 to carry out such projects. No funds
    appropriated under paragraph (1) shall be used to carry out
    demonstration projects under subsection (b) after fiscal year
    2012.

    ``(d) Nonapplication.--
    ``(1) In general.--Except as provided in paragraph (2), the
    preceding sections of this title shall not apply to grant
    awarded under this section.
    ``(2) Limitations on use of
    grants. <> --Section 2005(a) (other than
    paragraph (6)) shall apply to a grant awarded under this section
    to the same extent and in the same manner as such section
    applies to payments to States under this title.''.

    (b) Extension of Family-To-Family Health Information Centers.--
    Section 501(c)(1)(A)(iii) of the Social Security Act (42 U.S.C.
    701(c)(1)(A)(iii)) is amended by striking ``fiscal year 2009'' and
    inserting ``each of fiscal years 2009 through 2012''.

    SEC. 5508. INCREASING TEACHING CAPACITY.

    (a) Teaching Health Centers Training and Enhancement.--Part C of
    title VII of the Public Health Service Act (42 U.S.C. 293k et. seq.), as
    amended by section 5303, is further amended by inserting after section
    749 the following:

    ``SEC. 749A. <> TEACHING HEALTH CENTERS
    DEVELOPMENT GRANTS.

    ``(a) Program Authorized.--The Secretary may award grants under this
    section to teaching health centers for the purpose of establishing new
    accredited or expanded primary care residency programs.

    [[Page 669]]

    ``(b) Amount and Duration.--Grants awarded under this section shall
    be for a term of not more than 3 years and the maximum award may not be
    more than $500,000.
    ``(c) Use of Funds.--Amounts provided under a grant under this
    section shall be used to cover the costs of--
    ``(1) establishing or expanding a primary care residency
    training program described in subsection (a), including costs
    associated with--
    ``(A) curriculum development;
    ``(B) recruitment, training and retention of
    residents and faculty:
    ``(C) accreditation by the Accreditation Council for
    Graduate Medical Education (ACGME), the American Dental
    Association (ADA), or the American Osteopathic
    Association (AOA); and
    ``(D) faculty salaries during the development phase;
    and
    ``(2) technical assistance provided by an eligible entity.

    ``(d) Application.--A teaching health center seeking a grant under
    this section shall submit an application to the Secretary at such time,
    in such manner, and containing such information as the Secretary may
    require.
    ``(e) Preference for Certain Applications.--In selecting recipients
    for grants under this section, the Secretary shall give preference to
    any such application that documents an existing affiliation agreement
    with an area health education center program as defined in sections 751
    and 799B.
    ``(f) Definitions.--In this section:
    ``(1) Eligible entity.--The term `eligible entity' means an
    organization capable of providing technical assistance including
    an area health education center program as defined in sections
    751 and 799B.
    ``(2) Primary care residency program.--The term `primary
    care residency program' means an approved graduate medical
    residency training program (as defined in section 340H) in
    family medicine, internal medicine, pediatrics, internal
    medicine-pediatrics, obstetrics and gynecology, psychiatry,
    general dentistry, pediatric dentistry, and geriatrics.
    ``(3) Teaching health center.--
    ``(A) In general.--The term `teaching health center'
    means an entity that--
    ``(i) is a community based, ambulatory patient
    care center; and
    ``(ii) operates a primary care residency
    program.
    ``(B) Inclusion of certain entities.--Such term
    includes the following:
    ``(i) A Federally qualified health center (as
    defined in section 1905(l)(2)(B), of the Social
    Security Act).
    ``(ii) A community mental health center (as
    defined in section 1861(ff)(3)(B) of the Social
    Security Act).
    ``(iii) A rural health clinic, as defined in
    section 1861(aa) of the Social Security Act.
    ``(iv) A health center operated by the Indian
    Health Service, an Indian tribe or tribal
    organization, or an urban Indian organization (as
    defined in section 4 of the Indian Health Care
    Improvement Act).

    [[Page 670]]

    ``(v) An entity receiving funds under title X
    of the Public Health Service Act.

    ``(g) Authorization of Appropriations.--There is authorized to be
    appropriated, $25,000,000 for fiscal year 2010, $50,000,000 for fiscal
    year 2011, $50,000,000 for fiscal year 2012, and such sums as may be
    necessary for each fiscal year thereafter to carry out this section. Not
    to exceed $5,000,000 annually may be used for technical assistance
    program grants.''.
    (b) National Health Service Corps Teaching Capacity.--Section
    338C(a) of the Public Health Service Act (42 U.S.C. 254m(a)) is amended
    to read as follows:
    ``(a) <> Service in Full-time Clinical Practice.--
    Except as provided in section 338D, each individual who has entered into
    a written contract with the Secretary under section 338A or 338B shall
    provide service in the full-time clinical practice of such individual's
    profession as a member of the Corps for the period of obligated service
    provided in such contract. For the purpose of calculating time spent in
    full-time clinical practice under this subsection, up to 50 percent of
    time spent teaching by a member of the Corps may be counted toward his
    or her service obligation.''.

    (c) Payments to Qualified Teaching Health Centers.--Part D of title
    III of the Public Health Service Act (42 U.S.C. 254b et seq.) is amended
    by adding at the end the following:

    ``Subpart XI--Support of Graduate Medical Education in Qualified
    Teaching Health Centers

    ``SEC. 340H. <> PROGRAM OF PAYMENTS TO TEACHING
    HEALTH CENTERS THAT OPERATE GRADUATE MEDICAL EDUCATION
    PROGRAMS.

    ``(a) Payments.--Subject to subsection (h)(2), the Secretary shall
    make payments under this section for direct expenses and for indirect
    expenses to qualified teaching health centers that are listed as
    sponsoring institutions by the relevant accrediting body for expansion
    of existing or establishment of new approved graduate medical residency
    training programs.
    ``(b) Amount of Payments.--
    ``(1) In general.--Subject to paragraph (2), the amounts
    payable under this section to qualified teaching health centers
    for an approved graduate medical residency training program for
    a fiscal year are each of the following amounts:
    ``(A) Direct expense amount.--The amount determined
    under subsection (c) for direct expenses associated with
    sponsoring approved graduate medical residency training
    programs.
    ``(B) Indirect expense amount.--The amount
    determined under subsection (d) for indirect expenses
    associated with the additional costs relating to
    teaching residents in such programs.
    ``(2) Capped amount.--
    ``(A) In general.--The total of the payments made to
    qualified teaching health centers under paragraph (1)(A)
    or paragraph (1)(B) in a fiscal year shall not exceed
    the amount of funds appropriated under subsection (g)
    for such payments for that fiscal year.
    ``(B) Limitation.--The Secretary shall limit the
    funding of full-time equivalent residents in order to
    ensure

    [[Page 671]]

    the direct and indirect payments as determined under
    subsection (c) and (d) do not exceed the total amount of
    funds appropriated in a fiscal year under subsection
    (g).

    ``(c) Amount of Payment for Direct Graduate Medical Education.--
    ``(1) In general.--The amount determined under this
    subsection for payments to qualified teaching health centers for
    direct graduate expenses relating to approved graduate medical
    residency training programs for a fiscal year is equal to the
    product of--
    ``(A) the updated national per resident amount for
    direct graduate medical education, as determined under
    paragraph (2); and
    ``(B) the average number of full-time equivalent
    residents in the teaching health center's graduate
    approved medical residency training programs as
    determined under section 1886(h)(4) of the Social
    Security Act (without regard to the limitation under
    subparagraph (F) of such section) during the fiscal
    year.
    ``(2) Updated national per resident amount for direct
    graduate medical education.--The updated per resident amount for
    direct graduate medical education for a qualified teaching
    health center for a fiscal year is an amount determined as
    follows:
    ``(A) Determination of qualified teaching health
    center per resident amount.--The Secretary shall compute
    for each individual qualified teaching health center a
    per resident amount--
    ``(i) by dividing the national average per
    resident amount computed under section
    340E(c)(2)(D) into a wage-related portion and a
    non-wage related portion by applying the
    proportion determined under subparagraph (B);
    ``(ii) by multiplying the wage-related portion
    by the factor applied under section 1886(d)(3)(E)
    of the Social Security Act (but without
    application of section 4410 of the Balanced Budget
    Act of 1997 (42 U.S.C. 1395ww note)) during the
    preceding fiscal year for the teaching health
    center's area; and
    ``(iii) by adding the non-wage-related portion
    to the amount computed under clause (ii).
    ``(B) Updating rate.--The Secretary shall update
    such per resident amount for each such qualified
    teaching health center as determined appropriate by the
    Secretary.

    ``(d) Amount of Payment for Indirect Medical Education.--
    ``(1) <> In general.--The amount
    determined under this subsection for payments to qualified
    teaching health centers for indirect expenses associated with
    the additional costs of teaching residents for a fiscal year is
    equal to an amount determined appropriate by the Secretary.
    ``(2) Factors.--In determining the amount under paragraph
    (1), the Secretary shall--
    ``(A) evaluate indirect training costs relative to
    supporting a primary care residency program in qualified
    teaching health centers; and
    ``(B) based on this evaluation, assure that the
    aggregate of the payments for indirect expenses under
    this section

    [[Page 672]]

    and the payments for direct graduate medical education
    as determined under subsection (c) in a fiscal year do
    not exceed the amount appropriated for such expenses as
    determined in subsection (g).
    ``(3) Interim payment.--Before the Secretary makes a payment
    under this subsection pursuant to a determination of indirect
    expenses under paragraph (1), the Secretary may provide to
    qualified teaching health centers a payment, in addition to any
    payment made under subsection (c), for expected indirect
    expenses associated with the additional costs of teaching
    residents for a fiscal year, based on an estimate by the
    Secretary.

    ``(e) Clarification Regarding Relationship to Other Payments for
    Graduate Medical Education.--Payments under this section--
    ``(1) shall be in addition to any payments--
    ``(A) for the indirect costs of medical education
    under section 1886(d)(5)(B) of the Social Security Act;
    ``(B) for direct graduate medical education costs
    under section 1886(h) of such Act; and
    ``(C) for direct costs of medical education under
    section 1886(k) of such Act;
    ``(2) shall not be taken into account in applying the
    limitation on the number of total full-time equivalent residents
    under subparagraphs (F) and (G) of section 1886(h)(4) of such
    Act and clauses (v), (vi)(I), and (vi)(II) of section
    1886(d)(5)(B) of such Act for the portion of time that a
    resident rotates to a hospital; and
    ``(3) shall not include the time in which a resident is
    counted toward full-time equivalency by a hospital under
    paragraph (2) or under section 1886(d)(5)(B)(iv) of the Social
    Security Act, section 1886(h)(4)(E) of such Act, or section 340E
    of this Act.

    ``(f) <> Reconciliation.--The Secretary shall
    determine any changes to the number of residents reported by a hospital
    in the application of the hospital for the current fiscal year to
    determine the final amount payable to the hospital for the current
    fiscal year for both direct expense and indirect expense amounts. Based
    on such determination, the Secretary shall recoup any overpayments made
    to pay any balance due to the extent possible. The final amount so
    determined shall be considered a final intermediary determination for
    the purposes of section 1878 of the Social Security Act and shall be
    subject to administrative and judicial review under that section in the
    same manner as the amount of payment under section 1186(d) of such Act
    is subject to review under such section.

    ``(g) Funding.--To carry out this section, there are appropriated
    such sums as may be necessary, not to exceed $230,000,000, for the
    period of fiscal years 2011 through 2015.
    ``(h) Annual Reporting Required.--
    ``(1) Annual report.--The report required under this
    paragraph for a qualified teaching health center for a fiscal
    year is a report that includes (in a form and manner specified
    by the Secretary) the following information for the residency
    academic year completed immediately prior to such fiscal year:
    ``(A) The types of primary care resident approved
    training programs that the qualified teaching health
    center provided for residents.

    [[Page 673]]

    ``(B) The number of approved training positions for
    residents described in paragraph (4).
    ``(C) The number of residents described in paragraph
    (4) who completed their residency training at the end of
    such residency academic year and care for vulnerable
    populations living in underserved areas.
    ``(D) Other information as deemed appropriate by the
    Secretary.
    ``(2) Audit authority; limitation on payment.--
    ``(A) Audit authority.--The Secretary may audit a
    qualified teaching health center to ensure the accuracy
    and completeness of the information submitted in a
    report under paragraph (1).
    ``(B) Limitation on payment.--A teaching health
    center may only receive payment in a cost reporting
    period for a number of such resident positions that is
    greater than the base level of primary care resident
    positions, as determined by the Secretary. For purposes
    of this subparagraph, the `base level of primary care
    residents' for a teaching health center is the level of
    such residents as of a base period.
    ``(3) Reduction in payment for failure to report.--
    ``(A) <> In general.--The
    amount payable under this section to a qualified
    teaching health center for a fiscal year shall be
    reduced by at least 25 percent if the Secretary
    determines that--
    ``(i) the qualified teaching health center has
    failed to provide the Secretary, as an addendum to
    the qualified teaching health center's application
    under this section for such fiscal year, the
    report required under paragraph (1) for the
    previous fiscal year; or
    ``(ii) such report fails to provide complete
    and accurate information required under any
    subparagraph of such paragraph.
    ``(B) Notice and opportunity to provide accurate and
    missing information. <> --Before
    imposing a reduction under subparagraph (A) on the basis
    of a qualified teaching health center's failure to
    provide complete and accurate information described in
    subparagraph (A)(ii), the Secretary shall provide notice
    to the teaching health center of such failure and the
    Secretary's intention to impose such reduction and shall
    provide the teaching health center with the opportunity
    to provide the required information within the period of
    30 days beginning on the date of such notice. If the
    teaching health center provides such information within
    such period, no reduction shall be made under
    subparagraph (A) on the basis of the previous failure to
    provide such information.
    ``(4) Residents.--The residents described in this paragraph
    are those who are in part-time or full-time equivalent resident
    training positions at a qualified teaching health center in any
    approved graduate medical residency training program.

    ``(i) Regulations.--The Secretary shall promulgate regulations to
    carry out this section.
    ``(j) Definitions.--In this section:
    ``(1) Approved graduate medical residency training
    program.--The term `approved graduate medical residency

    [[Page 674]]

    training program' means a residency or other postgraduate
    medical training program--
    ``(A) participation in which may be counted toward
    certification in a specialty or subspecialty and
    includes formal postgraduate training programs in
    geriatric medicine approved by the Secretary; and
    ``(B) that meets criteria for accreditation (as
    established by the Accreditation Council for Graduate
    Medical Education, the American Osteopathic Association,
    or the American Dental Association).
    ``(2) Primary care residency program.--The term `primary
    care residency program' has the meaning given that term in
    section 749A.
    ``(3) Qualified teaching health center.--The term `qualified
    teaching health center' has the meaning given the term `teaching
    health center' in section 749A.''.

    SEC. 5509. <> GRADUATE NURSE EDUCATION
    DEMONSTRATION.

    (a) In General.--
    (1) Establishment.--
    (A) In general.--The Secretary shall establish a
    graduate nurse education demonstration under title XVIII
    of the Social Security Act (42 U.S.C. 1395 et seq.)
    under which an eligible hospital may receive payment for
    the hospital's reasonable costs (described in paragraph
    (2)) for the provision of qualified clinical training to
    advance practice nurses.
    (B) Number.--The demonstration shall include up to 5
    eligible hospitals.
    (C) Written agreements.--Eligible hospitals selected
    to participate in the demonstration shall enter into
    written agreements pursuant to subsection (b) in order
    to reimburse the eligible partners of the hospital the
    share of the costs attributable to each partner.
    (2) Costs described.--
    (A) In general.--Subject to subparagraph (B) and
    subsection (d), the costs described in this paragraph
    are the reasonable costs (as described in section
    1861(v) of the Social Security Act (42 U.S.C. 1395x(v)))
    of each eligible hospital for the clinical training
    costs (as determined by the Secretary) that are
    attributable to providing advanced practice registered
    nurses with qualified training.
    (B) <> Limitation.--With respect
    to a year, the amount reimbursed under subparagraph (A)
    may not exceed the amount of costs described in
    subparagraph (A) that are attributable to an increase in
    the number of advanced practice registered nurses
    enrolled in a program that provides qualified training
    during the year and for which the hospital is being
    reimbursed under the demonstration, as compared to the
    average number of advanced practice registered nurses
    who graduated in each year during the period beginning
    on January 1, 2006, and ending on December 31, 2010 (as
    determined by the Secretary) from the graduate nursing
    education program operated by the applicable school of
    nursing that is an eligible partner of the hospital for
    purposes of the demonstration.

    [[Page 675]]

    (3) Waiver authority.--The Secretary may waive such
    requirements of titles XI and XVIII of the Social Security Act
    as may be necessary to carry out the demonstration.
    (4) Administration.--Chapter 35 of title 44, United States
    Code, shall not apply to the implementation of this section.

    (b) Written Agreements With Eligible Partners.--No payment shall be
    made under this section to an eligible hospital unless such hospital has
    in effect a written agreement with the eligible partners of the
    hospital. Such written agreement shall describe, at a minimum--
    (1) the obligations of the eligible partners with respect to
    the provision of qualified training; and
    (2) the obligation of the eligible hospital to reimburse
    such eligible partners applicable (in a timely manner) for the
    costs of such qualified training attributable to partner.

    (c) <> Evaluation.--Not later than October
    17, 2017, the Secretary shall submit to Congress a report on the
    demonstration. Such report shall include an analysis of the following:
    (1) The growth in the number of advanced practice registered
    nurses with respect to a specific base year as a result of the
    demonstration.
    (2) The growth for each of the specialties described in
    subparagraphs (A) through (D) of subsection (e)(1).
    (3) The costs to the Medicare program under title XVIII of
    the Social Security Act as a result of the demonstration.
    (4) Other items the Secretary determines appropriate and
    relevant.

    (d) Funding.--
    (1) In general.--There is hereby appropriated to the
    Secretary, out of any funds in the Treasury not otherwise
    appropriated, $50,000,000 for each of fiscal years 2012 through
    2015 to carry out this section, including the design,
    implementation, monitoring, and evaluation of the demonstration.
    (2) Proration.--If the aggregate payments to eligible
    hospitals under the demonstration exceed $50,000,000 for a
    fiscal year described in paragraph (1), the Secretary shall
    prorate the payment amounts to each eligible hospital in order
    to ensure that the aggregate payments do not exceed such amount.
    (3) Without fiscal year limitation.--Amounts appropriated
    under this subsection shall remain available without fiscal year
    limitation.

    (e) Definitions.--In this section:
    (1) Advanced practice registered nurse.--The term ``advanced
    practice registered nurse'' includes the following:
    (A) A clinical nurse specialist (as defined in
    subsection (aa)(5) of section 1861 of the Social
    Security Act (42 U.S.C. 1395x)).
    (B) A nurse practitioner (as defined in such
    subsection).
    (C) A certified registered nurse anesthetist (as
    defined in subsection (bb)(2) of such section).
    (D) A certified nurse-midwife (as defined in
    subsection (gg)(2) of such section).
    (2) Applicable non-hospital community-based care setting.--
    The term ``applicable non-hospital community-based care
    setting'' means a non-hospital community-based care setting
    which has entered into a written agreement (as described in
    subsection (b)) with the eligible hospital participating in the

    [[Page 676]]

    demonstration. Such settings include Federally qualified health
    centers, rural health clinics, and other non-hospital settings
    as determined appropriate by the Secretary.
    (3) Applicable school of nursing.--The term ``applicable
    school of nursing'' means an accredited school of nursing (as
    defined in section 801 of the Public Health Service Act) which
    has entered into a written agreement (as described in subsection
    (b)) with the eligible hospital participating in the
    demonstration.
    (4) Demonstration.--The term ``demonstration'' means the
    graduate nurse education demonstration established under
    subsection (a).
    (5) Eligible hospital.--The term ``eligible hospital'' means
    a hospital (as defined in subsection (e) of section 1861 of the
    Social Security Act (42 U.S.C. 1395x)) or a critical access
    hospital (as defined in subsection (mm)(1) of such section) that
    has a written agreement in place with--
    (A) 1 or more applicable schools of nursing; and
    (B) 2 or more applicable non-hospital community-
    based care settings.
    (6) Eligible partners.--The term ``eligible partners''
    includes the following:
    (A) An applicable non-hospital community-based care
    setting.
    (B) An applicable school of nursing.
    (7) Qualified training.--
    (A) In general.--The term ``qualified training''
    means training--
    (i) that provides an advanced practice
    registered nurse with the clinical skills
    necessary to provide primary care, preventive
    care, transitional care, chronic care management,
    and other services appropriate for individuals
    entitled to, or enrolled for, benefits under part
    A of title XVIII of the Social Security Act, or
    enrolled under part B of such title; and
    (ii) subject to subparagraph (B), at least
    half of which is provided in a non-hospital
    community-based care setting.
    (B) Waiver of requirement half of training be
    provided in non-hospital community-based care setting in
    certain areas.--The Secretary may waive the requirement
    under subparagraph (A)(ii) with respect to eligible
    hospitals located in rural or medically underserved
    areas.
    (8) Secretary.--The term ``Secretary'' means the Secretary
    of Health and Human Services.

    Subtitle G--Improving Access to Health Care Services

    SEC. 5601. SPENDING FOR FEDERALLY QUALIFIED HEALTH CENTERS (FQHCS).

    (a) In General.--Section 330(r) of the Public Health Service Act (42
    U.S.C. 254b(r)) is amended by striking paragraph (1) and inserting the
    following:

    [[Page 677]]

    ``(1) General amounts for grants.--For the purpose of
    carrying out this section, in addition to the amounts authorized
    to be appropriated under subsection (d), there is authorized to
    be appropriated the following:
    ``(A) For fiscal year 2010, $2,988,821,592.
    ``(B) For fiscal year 2011, $3,862,107,440.
    ``(C) For fiscal year 2012, $4,990,553,440.
    ``(D) For fiscal year 2013, $6,448,713,307.
    ``(E) For fiscal year 2014, $7,332,924,155.
    ``(F) For fiscal year 2015, $8,332,924,155.
    ``(G) For fiscal year 2016, and each subsequent
    fiscal year, the amount appropriated for the preceding
    fiscal year adjusted by the product of--
    ``(i) one plus the average percentage increase
    in costs incurred per patient served; and
    ``(ii) one plus the average percentage
    increase in the total number of patients
    served.''.

    (b) Rule of Construction.--Section 330(r) of the Public Health
    Service Act (42 U.S.C. 254b(r)) is amended by adding at the end the
    following:
    ``(4) Rule of construction with respect to rural health
    clinics.--
    ``(A) In general.--Nothing in this section shall be
    construed to prevent a community health center from
    contracting with a Federally certified rural health
    clinic (as defined in section 1861(aa)(2) of the Social
    Security Act), a low-volume hospital (as defined for
    purposes of section 1886 of such Act), a critical access
    hospital, a sole community hospital (as defined for
    purposes of section 1886(d)(5)(D)(iii) of such Act), or
    a medicare-dependent share hospital (as defined for
    purposes of section 1886(d)(5)(G)(iv) of such Act) for
    the delivery of primary health care services that are
    available at the clinic or hospital to individuals who
    would otherwise be eligible for free or reduced cost
    care if that individual were able to obtain that care at
    the community health center. Such services may be
    limited in scope to those primary health care services
    available in that clinic or hospitals.
    ``(B) Assurances.--In order for a clinic or hospital
    to receive funds under this section through a contract
    with a community health center under subparagraph (A),
    such clinic or hospital shall establish policies to
    ensure--
    ``(i) nondiscrimination based on the ability
    of a patient to pay; and
    ``(ii) the establishment of a sliding fee
    scale for low-income patients.''.

    SEC. 5602. <> NEGOTIATED RULEMAKING
    FOR DEVELOPMENT OF METHODOLOGY AND CRITERIA FOR DESIGNATING
    MEDICALLY UNDERSERVED POPULATIONS AND HEALTH PROFESSIONS
    SHORTAGE AREAS.

    (a) Establishment.--
    (1) In general.--The Secretary of Health and Human Services
    (in this section referred to as the ``Secretary'') shall
    establish, through a negotiated rulemaking process under
    subchapter 3 of chapter 5 of title 5, United States Code, a
    comprehensive methodology and criteria for designation of--

    [[Page 678]]

    (A) medically underserved populations in accordance
    with section 330(b)(3) of the Public Health Service Act
    (42 U.S.C. 254b(b)(3));
    (B) health professions shortage areas under section
    332 of the Public Health Service Act (42 U.S.C. 254e).
    (2) Factors to consider.--In establishing the methodology
    and criteria under paragraph (1), the Secretary--
    (A) shall consult with relevant stakeholders who
    will be significantly affected by a rule (such as
    national, State and regional organizations representing
    affected entities), State health offices, community
    organizations, health centers and other affected
    entities, and other interested parties; and
    (B) shall take into account--
    (i) the timely availability and
    appropriateness of data used to determine a
    designation to potential applicants for such
    designations;
    (ii) the impact of the methodology and
    criteria on communities of various types and on
    health centers and other safety net providers;
    (iii) the degree of ease or difficulty that
    will face potential applicants for such
    designations in securing the necessary data; and
    (iv) the extent to which the methodology
    accurately measures various barriers that confront
    individuals and population groups in seeking
    health care services.

    (b) <> Publication of Notice.--In carrying out the
    rulemaking process under this subsection, the Secretary shall publish
    the notice provided for under section 564(a) of title 5, United States
    Code, by not later than 45 days after the date of the enactment of this
    Act.

    (c) Target Date for Publication of Rule.--As part of the notice
    under subsection (b), and for purposes of this subsection, the ``target
    date for publication'', as referred to in section 564(a)(5) of title 5,
    United Sates Code, shall be July 1, 2010.
    (d) <> Appointment of Negotiated Rulemaking
    Committee and Facilitator.--The Secretary shall provide for--
    (1) the appointment of a negotiated rulemaking committee
    under section 565(a) of title 5, United States Code, by not
    later than 30 days after the end of the comment period provided
    for under section 564(c) of such title; and
    (2) the nomination of a facilitator under section 566(c) of
    such title 5 by not later than 10 days after the date of
    appointment of the committee.

    (e) Preliminary Committee Report.--The negotiated rulemaking
    committee appointed under subsection (d) shall report to the Secretary,
    by not later than April 1, 2010, regarding the committee's progress on
    achieving a consensus with regard to the rulemaking proceeding and
    whether such consensus is likely to occur before one month before the
    target date for publication of the rule. If the committee reports that
    the committee has failed to make significant progress toward such
    consensus or is unlikely to reach such consensus by the target date, the
    Secretary may terminate such process and provide for the publication of
    a rule under this section through such other methods as the Secretary
    may provide.

    [[Page 679]]

    (f) Final Committee Report.--If the committee is not terminated
    under subsection (e), the rulemaking committee shall submit a report
    containing a proposed rule by not later than one month before the target
    publication date.
    (g) <> Interim
    Final Effect.--The Secretary shall publish a rule under this section in
    the Federal Register by not later than the target publication
    date. <> Such rule shall be
    effective and final immediately on an interim basis, but is subject to
    change and revision after public notice and opportunity for a period (of
    not less than 90 days) for public comment. In connection with such rule,
    the Secretary shall specify the process for the timely review and
    approval of applications for such designations pursuant to such rules
    and consistent with this section.

    (h) Publication of Rule After Public Comment.--The Secretary shall
    provide for consideration of such comments and republication of such
    rule by not later than 1 year after the target publication date.

    SEC. 5603. REAUTHORIZATION OF THE WAKEFIELD EMERGENCY MEDICAL SERVICES
    FOR CHILDREN PROGRAM.

    Section 1910 of the Public Health Service Act (42 U.S.C. 300w-9) is
    amended--
    (1) in subsection (a), by striking ``3-year period (with an
    optional 4th year'' and inserting ``4-year period (with an
    optional 5th year''; and
    (2) in subsection (d)--
    (A) by striking ``and such sums'' and inserting
    ``such sums''; and
    (B) by inserting before the period the following:
    ``, $25,000,000 for fiscal year 2010, $26,250,000 for
    fiscal year 2011, $27,562,500 for fiscal year 2012,
    $28,940,625 for fiscal year 2013, and $30,387,656 for
    fiscal year 2014''.

    SEC. 5604. CO-LOCATING PRIMARY AND SPECIALTY CARE IN COMMUNITY-BASED
    MENTAL HEALTH SETTINGS.

    Subpart 3 of part B of title V of the Public Health Service Act (42
    U.S.C. 290bb-31 et seq.) is amended by adding at the end the following:

    ``SEC. 520K. <> AWARDS FOR CO-LOCATING PRIMARY
    AND SPECIALTY CARE IN COMMUNITY-BASED MENTAL HEALTH
    SETTINGS.

    ``(a) Definitions.--In this section:
    ``(1) Eligible entity.--The term `eligible entity' means a
    qualified community mental health program defined under section
    1913(b)(1).
    ``(2) Special populations.--The term `special populations'
    means adults with mental illnesses who have co-occurring primary
    care conditions and chronic diseases.

    ``(b) <> Program Authorized.--The
    Secretary, acting through the Administrator shall award grants and
    cooperative agreements to eligible entities to establish demonstration
    projects for the provision of coordinated and integrated services to
    special populations through the co-location of primary and specialty
    care services in community-based mental and behavioral health settings.

    ``(c) Application.--To be eligible to receive a grant or cooperative
    agreement under this section, an eligible entity shall submit an
    application to the Administrator at such time, in such manner,

    [[Page 680]]

    and accompanied by such information as the Administrator may require,
    including a description of partnerships, or other arrangements with
    local primary care providers, including community health centers, to
    provide services to special populations.
    ``(d) Use of Funds.--
    ``(1) In general.--For the benefit of special populations,
    an eligible entity shall use funds awarded under this section
    for--
    ``(A) the provision, by qualified primary care
    professionals, of on site primary care services;
    ``(B) reasonable costs associated with medically
    necessary referrals to qualified specialty care
    professionals, other coordinators of care or, if
    permitted by the terms of the grant or cooperative
    agreement, by qualified specialty care professionals on
    a reasonable cost basis on site at the eligible entity;
    ``(C) information technology required to accommodate
    the clinical needs of primary and specialty care
    professionals; or
    ``(D) facility modifications needed to bring primary
    and specialty care professionals on site at the eligible
    entity.
    ``(2) Limitation.--Not to exceed 15 percent of grant or
    cooperative agreement funds may be used for activities described
    in subparagraphs (C) and (D) of paragraph (1).

    ``(e) <> Evaluation.--Not later than 90 days after
    a grant or cooperative agreement awarded under this section expires, an
    eligible entity shall submit to the Secretary the results of an
    evaluation to be conducted by the entity concerning the effectiveness of
    the activities carried out under the grant or agreement.

    ``(f) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section, $50,000,000 for fiscal year 2010
    and such sums as may be necessary for each of fiscal years 2011 through
    2014.''.

    SEC. 5605. <> KEY NATIONAL INDICATORS.

    (a) Definitions.--In this section:
    (1) Academy.--The term ``Academy'' means the National
    Academy of Sciences.
    (2) Commission.--The term ``Commission'' means the
    Commission on Key National Indicators established under
    subsection (b).
    (3) Institute.--The term ``Institute'' means a Key National
    Indicators Institute as designated under subsection (c)(3).

    (b) Commission on Key National Indicators.--
    (1) Establishment.--There is established a ``Commission on
    Key National Indicators''.
    (2) Membership.--
    (A) Number and appointment.--The Commission shall be
    composed of 8 members, to be appointed equally by the
    majority and minority leaders of the Senate and the
    Speaker and minority leader of the House of
    Representatives.
    (B) Prohibited appointments.--Members of the
    Commission shall not include Members of Congress or
    other elected Federal, State, or local government
    officials.
    (C) Qualifications.--In making appointments under
    subparagraph (A), the majority and minority leaders of

    [[Page 681]]

    the Senate and the Speaker and minority leader of the
    House of Representatives shall appoint individuals who
    have shown a dedication to improving civic dialogue and
    decision-making through the wide use of scientific
    evidence and factual information.
    (D) Period of appointment.--Each member of the
    Commission shall be appointed for a 2-year term, except
    that 1 initial appointment shall be for 3 years. Any
    vacancies shall not affect the power and duties of the
    Commission but shall be filled in the same manner as the
    original appointment and shall last only for the
    remainder of that term.
    (E) Date.--Members of the Commission shall be
    appointed by not later than 30 days after the date of
    enactment of this Act.
    (F) Initial organizing period.---Not later than 60
    days after the date of enactment of this Act, the
    Commission shall develop and implement a schedule for
    completion of the review and reports required under
    subsection (d).
    (G) Co-chairpersons.--The Commission shall select 2
    Co-Chairpersons from among its members.

    (c) Duties of the Commission.--
    (1) In general.--The Commission shall--
    (A) conduct comprehensive oversight of a newly
    established key national indicators system consistent
    with the purpose described in this subsection;
    (B) make recommendations on how to improve the key
    national indicators system;
    (C) coordinate with Federal Government users and
    information providers to assure access to relevant and
    quality data; and
    (D) <> enter into contracts with
    the Academy.
    (2) Reports.--
    (A) Annual report to congress.--Not later than 1
    year after the selection of the 2 Co-Chairpersons of the
    Commission, and each subsequent year thereafter, the
    Commission shall prepare and submit to the appropriate
    Committees of Congress and the President a report that
    contains a detailed statement of the recommendations,
    findings, and conclusions of the Commission on the
    activities of the Academy and a designated Institute
    related to the establishment of a Key National Indicator
    System.
    (B) Annual report to the academy.--
    (i) In general.--Not later than 6 months after
    the selection of the 2 Co-Chairpersons of the
    Commission, and each subsequent year thereafter,
    the Commission shall prepare and submit to the
    Academy and a designated Institute a report making
    recommendations concerning potential issue areas
    and key indicators to be included in the Key
    National Indicators.
    (ii) Limitation.--The Commission shall not
    have the authority to direct the Academy or, if
    established, the Institute, to adopt, modify, or
    delete any key indicators.
    (3) Contract with the national academy of sciences.--
    (A) In general.---As soon as practicable after the
    selection of the 2 Co-Chairpersons of the Commission,
    the

    [[Page 682]]

    Co-Chairpersons shall enter into an arrangement with the
    National Academy of Sciences under which the Academy
    shall--
    (i) review available public and private sector
    research on the selection of a set of key national
    indicators;
    (ii) determine how best to establish a key
    national indicator system for the United States,
    by either creating its own institutional
    capability or designating an independent private
    nonprofit organization as an Institute to
    implement a key national indicator system;
    (iii) if the Academy designates an independent
    Institute under clause (ii), provide scientific
    and technical advice to the Institute and create
    an appropriate governance mechanism that balances
    Academy involvement and the independence of the
    Institute; and
    (iv) <> provide an annual
    report to the Commission addressing scientific and
    technical issues related to the key national
    indicator system and, if established, the
    Institute, and governance of the Institute's
    budget and operations.
    (B) Participation.--In executing the arrangement
    under subparagraph (A), the National Academy of Sciences
    shall convene a multi-sector, multi-disciplinary process
    to define major scientific and technical issues
    associated with developing, maintaining, and evolving a
    Key National Indicator System and, if an Institute is
    established, to provide it with scientific and technical
    advice.
    (C) Establishment of a key national indicator
    system.--
    (i) In general.--In executing the arrangement
    under subparagraph (A), the National Academy of
    Sciences shall enable the establishment of a key
    national indicator system by--
    (I) creating its own institutional
    capability; or
    (II) partnering with an independent
    private nonprofit organization as an
    Institute to implement a key national
    indicator system.
    (ii) Institute.--If the Academy designates an
    Institute under clause (i)(II), such Institute
    shall be a non-profit entity (as defined for
    purposes of section 501(c)(3) of the Internal
    Revenue Code of 1986) with an educational mission,
    a governance structure that emphasizes
    independence, and characteristics that make such
    entity appropriate for establishing a key national
    indicator system.
    (iii) Responsibilities.--Either the Academy or
    the Institute designated under clause (i)(II)
    shall be responsible for the following:
    (I) Identifying and selecting issue
    areas to be represented by the key
    national indicators.
    (II) Identifying and selecting the
    measures used for key national
    indicators within the issue areas under
    subclause (I).

    [[Page 683]]

    (III) Identifying and selecting data
    to populate the key national indicators
    described under subclause (II).
    (IV) Designing, publishing, and
    maintaining a public website that
    contains a freely accessible database
    allowing public access to the key
    national indicators.
    (V) Developing a quality assurance
    framework to ensure rigorous and
    independent processes and the selection
    of quality data.
    (VI) Developing a budget for the
    construction and management of a
    sustainable, adaptable, and evolving key
    national indicator system that reflects
    all Commission funding of Academy and,
    if an Institute is established,
    Institute activities.
    (VII) <> Reporting
    annually to the Commission regarding its
    selection of issue areas, key
    indicators, data, and progress toward
    establishing a web-accessible database.
    (VIII) Responding directly to the
    Commission in response to any Commission
    recommendations and to the Academy
    regarding any inquiries by the Academy.
    (iv) Governance.--Upon the establishment of a
    key national indicator system, the Academy shall
    create an appropriate governance mechanism that
    incorporates advisory and control functions. If an
    Institute is designated under clause (i)(II), the
    governance mechanism shall balance appropriate
    Academy involvement and the independence of the
    Institute.
    (v) Modification and changes.--The Academy
    shall retain the sole discretion, at any time, to
    alter its approach to the establishment of a key
    national indicator system or, if an Institute is
    designated under clause (i)(II), to alter any
    aspect of its relationship with the Institute or
    to designate a different non-profit entity to
    serve as the Institute.
    (vi) Construction.--Nothing in this section
    shall be construed to limit the ability of the
    Academy or the Institute designated under clause
    (i)(II) to receive private funding for activities
    related to the establishment of a key national
    indicator system.
    (D) Annual report.--As part of the arrangement under
    subparagraph (A), the National Academy of Sciences
    shall, not later than 270 days after the date of
    enactment of this Act, and annually thereafter, submit
    to the Co-Chairpersons of the Commission a report that
    contains the findings and recommendations of the
    Academy.

    (d) Government Accountability Office Study and Report.--
    (1) GAO study.--The Comptroller General of the United States
    shall conduct a study of previous work conducted by all public
    agencies, private organizations, or foreign countries with
    respect to best practices for a key national indicator system.
    The study shall be submitted to the appropriate authorizing
    committees of Congress.

    [[Page 684]]

    (2) GAO financial audit.--If an Institute is established
    under this section, the Comptroller General shall conduct an
    annual audit of the financial statements of the Institute, in
    accordance with generally accepted government auditing standards
    and submit a report on such audit to the Commission and the
    appropriate authorizing committees of Congress.
    (3) GAO programmatic review.--The Comptroller General of the
    United States shall conduct programmatic assessments of the
    Institute established under this section as determined necessary
    by the Comptroller General and report the findings to the
    Commission and to the appropriate authorizing committees of
    Congress.

    (e) Authorization of Appropriations.--
    (1) In general.---There are authorized to be appropriated to
    carry out the purposes of this section, $10,000,000 for fiscal
    year 2010, and $7,500,000 for each of fiscal year 2011 through
    2018.
    (2) Availability.---Amounts appropriated under paragraph (1)
    shall remain available until expended.

    Subtitle H--General Provisions

    SEC. 5701. <> REPORTS.

    (a) Reports by Secretary of Health and Human Services.--On an annual
    basis, the Secretary of Health and Human Services shall submit to the
    appropriate Committees of Congress a report on the activities carried
    out under the amendments made by this title, and the effectiveness of
    such activities.
    (b) Reports by Recipients of Funds.--The Secretary of Health and
    Human Services may require, as a condition of receiving funds under the
    amendments made by this title, that the entity receiving such award
    submit to such Secretary such reports as the such Secretary may require
    on activities carried out with such award, and the effectiveness of such
    activities.

    TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY

    Subtitle A--Physician Ownership and Other Transparency

    SEC. 6001. LIMITATION ON MEDICARE EXCEPTION TO THE PROHIBITION ON
    CERTAIN PHYSICIAN REFERRALS FOR HOSPITALS.

    (a) In General.--Section 1877 of the Social Security Act (42 U.S.C.
    1395nn) is amended--
    (1) in subsection (d)(2)--
    (A) in subparagraph (A), by striking ``and'' at the
    end;
    (B) in subparagraph (B), by striking the period at
    the end and inserting ``; and''; and
    (C) by adding at the end the following new
    subparagraph:
    ``(C) in the case where the entity is a hospital,
    the hospital meets the requirements of paragraph
    (3)(D).'';

    [[Page 685]]

    (2) in subsection (d)(3)--
    (A) in subparagraph (B), by striking ``and'' at the
    end;
    (B) in subparagraph (C), by striking the period at
    the end and inserting ``; and''; and
    (C) by adding at the end the following new
    subparagraph:
    ``(D) <> the hospital meets the
    requirements described in subsection (i)(1) not later
    than 18 months after the date of the enactment of this
    subparagraph.''; and
    (3) by adding at the end the following new subsection:

    ``(i) Requirements for Hospitals To Qualify for Rural Provider and
    Hospital Exception to Ownership or Investment Prohibition.--
    ``(1) Requirements described.--For purposes of subsection
    (d)(3)(D), the requirements described in this paragraph for a
    hospital are as follows:
    ``(A) Provider agreement.--The hospital had--
    ``(i) physician ownership or investment on
    February 1, 2010; and
    ``(ii) a provider agreement under section 1866
    in effect on such date.
    ``(B) Limitation on expansion of facility
    capacity.--Except as provided in paragraph (3), the
    number of operating rooms, procedure rooms, and beds for
    which the hospital is licensed at any time on or after
    the date of the enactment of this subsection is no
    greater than the number of operating rooms, procedure
    rooms, and beds for which the hospital is licensed as of
    such date.
    ``(C) Preventing conflicts of interest.--
    ``(i) <> The hospital submits
    to the Secretary an annual report containing a
    detailed description of--
    ``(I) the identity of each physician
    owner or investor and any other owners
    or investors of the hospital; and
    ``(II) the nature and extent of all
    ownership and investment interests in
    the hospital.
    ``(ii) The hospital has procedures in place to
    require that any referring physician owner or
    investor discloses to the patient being referred,
    by a time that permits the patient to make a
    meaningful decision regarding the receipt of care,
    as determined by the Secretary--
    ``(I) the ownership or investment
    interest, as applicable, of such
    referring physician in the hospital; and
    ``(II) if applicable, any such
    ownership or investment interest of the
    treating physician.
    ``(iii) The hospital does not condition any
    physician ownership or investment interests either
    directly or indirectly on the physician owner or
    investor making or influencing referrals to the
    hospital or otherwise generating business for the
    hospital.
    ``(iv) The hospital discloses the fact that
    the hospital is partially owned or invested in by
    physicians--
    ``(I) on any public website for the
    hospital; and
    ``(II) in any public advertising for
    the hospital.
    ``(D) Ensuring bona fide investment.--

    [[Page 686]]

    ``(i) The percentage of the total value of the
    ownership or investment interests held in the
    hospital, or in an entity whose assets include the
    hospital, by physician owners or investors in the
    aggregate does not exceed such percentage as of
    the date of enactment of this subsection.
    ``(ii) Any ownership or investment interests
    that the hospital offers to a physician owner or
    investor are not offered on more favorable terms
    than the terms offered to a person who is not a
    physician owner or investor.
    ``(iii) The hospital (or any owner or investor
    in the hospital) does not directly or indirectly
    provide loans or financing for any investment in
    the hospital by a physician owner or investor.
    ``(iv) The hospital (or any owner or investor
    in the hospital) does not directly or indirectly
    guarantee a loan, make a payment toward a loan, or
    otherwise subsidize a loan, for any individual
    physician owner or investor or group of physician
    owners or investors that is related to acquiring
    any ownership or investment interest in the
    hospital.
    ``(v) Ownership or investment returns are
    distributed to each owner or investor in the
    hospital in an amount that is directly
    proportional to the ownership or investment
    interest of such owner or investor in the
    hospital.
    ``(vi) Physician owners and investors do not
    receive, directly or indirectly, any guaranteed
    receipt of or right to purchase other business
    interests related to the hospital, including the
    purchase or lease of any property under the
    control of other owners or investors in the
    hospital or located near the premises of the
    hospital.
    ``(vii) The hospital does not offer a
    physician owner or investor the opportunity to
    purchase or lease any property under the control
    of the hospital or any other owner or investor in
    the hospital on more favorable terms than the
    terms offered to an individual who is not a
    physician owner or investor.
    ``(E) Patient safety.--
    ``(i) Insofar as the hospital admits a patient
    and does not have any physician available on the
    premises to provide services during all hours in
    which the hospital is providing services to such
    patient, before admitting the patient--
    ``(I) the hospital discloses such
    fact to a patient; and
    ``(II) following such disclosure,
    the hospital receives from the patient a
    signed acknowledgment that the patient
    understands such fact.
    ``(ii) The hospital has the capacity to--
    ``(I) provide assessment and initial
    treatment for patients; and
    ``(II) refer and transfer patients
    to hospitals with the capability to
    treat the needs of the patient involved.

    [[Page 687]]

    ``(F) Limitation on application to certain converted
    facilities.--The hospital was not converted from an
    ambulatory surgical center to a hospital on or after the
    date of enactment of this subsection.
    ``(2) <> Publication of
    information reported.--The Secretary shall publish, and update
    on an annual basis, the information submitted by hospitals under
    paragraph (1)(C)(i) on the public Internet website of the
    Centers for Medicare & Medicaid Services.
    ``(3) Exception to prohibition on expansion of facility
    capacity.--
    ``(A) Process.--
    ``(i) Establishment.--The Secretary shall
    establish and implement a process under which an
    applicable hospital (as defined in subparagraph
    (E)) may apply for an exception from the
    requirement under paragraph (1)(B).
    ``(ii) Opportunity for community input.--The
    process under clause (i) shall provide individuals
    and entities in the community in which the
    applicable hospital applying for an exception is
    located with the opportunity to provide input with
    respect to the application.
    ``(iii) Timing for implementation.--The
    Secretary shall implement the process under clause
    (i) on August 1, 2011.
    ``(iv) <> Regulations.--Not
    later than July 1, 2011, the Secretary shall
    promulgate regulations to carry out the process
    under clause (i).
    ``(B) Frequency.--The process described in
    subparagraph (A) shall permit an applicable hospital to
    apply for an exception up to once every 2 years.
    ``(C) Permitted increase.--
    ``(i) In general.--Subject to clause (ii) and
    subparagraph (D), an applicable hospital granted
    an exception under the process described in
    subparagraph (A) may increase the number of
    operating rooms, procedure rooms, and beds for
    which the applicable hospital is licensed above
    the baseline number of operating rooms, procedure
    rooms, and beds of the applicable hospital (or, if
    the applicable hospital has been granted a
    previous exception under this paragraph, above the
    number of operating rooms, procedure rooms, and
    beds for which the hospital is licensed after the
    application of the most recent increase under such
    an exception).
    ``(ii) 100 percent increase limitation.--The
    Secretary shall not permit an increase in the
    number of operating rooms, procedure rooms, and
    beds for which an applicable hospital is licensed
    under clause (i) to the extent such increase would
    result in the number of operating rooms, procedure
    rooms, and beds for which the applicable hospital
    is licensed exceeding 200 percent of the baseline
    number of operating rooms, procedure rooms, and
    beds of the applicable hospital.
    ``(iii) Baseline number of operating rooms,
    procedure rooms, and beds.--In this paragraph, the
    term `baseline number of operating rooms,
    procedure

    [[Page 688]]

    rooms, and beds' means the number of operating
    rooms, procedure rooms, and beds for which the
    applicable hospital is licensed as of the date of
    enactment of this subsection.
    ``(D) Increase limited to facilities on the main
    campus of the hospital.--Any increase in the number of
    operating rooms, procedure rooms, and beds for which an
    applicable hospital is licensed pursuant to this
    paragraph may only occur in facilities on the main
    campus of the applicable hospital.
    ``(E) Applicable hospital.--In this paragraph, the
    term `applicable hospital' means a hospital--
    ``(i) that is located in a county in which the
    percentage increase in the population during the
    most recent 5-year period (as of the date of the
    application under subparagraph (A)) is at least
    150 percent of the percentage increase in the
    population growth of the State in which the
    hospital is located during that period, as
    estimated by Bureau of the Census;
    ``(ii) whose annual percent of total inpatient
    admissions that represent inpatient admissions
    under the program under title XIX is equal to or
    greater than the average percent with respect to
    such admissions for all hospitals located in the
    county in which the hospital is located;
    ``(iii) that does not discriminate against
    beneficiaries of Federal health care programs and
    does not permit physicians practicing at the
    hospital to discriminate against such
    beneficiaries;
    ``(iv) that is located in a State in which the
    average bed capacity in the State is less than the
    national average bed capacity; and
    ``(v) that has an average bed occupancy rate
    that is greater than the average bed occupancy
    rate in the State in which the hospital is
    located.
    ``(F) Procedure rooms.--In this subsection, the term
    `procedure rooms' includes rooms in which
    catheterizations, angiographies, angiograms, and
    endoscopies are performed, except such term shall not
    include emergency rooms or departments (exclusive of
    rooms in which catheterizations, angiographies,
    angiograms, and endoscopies are performed).
    ``(G) <> Publication of final decisions.--Not
    later than 60 days after receiving a complete
    application under this paragraph, the Secretary shall
    publish in the Federal Register the final decision with
    respect to such application.
    ``(H) Limitation on review.--There shall be no
    administrative or judicial review under section 1869,
    section 1878, or otherwise of the process under this
    paragraph (including the establishment of such process).
    ``(4) Collection of ownership and investment information.--
    For purposes of subparagraphs (A)(i) and (D)(i) of paragraph
    (1), the Secretary shall collect physician ownership and
    investment information for each hospital.
    ``(5) Physician owner or investor defined.--For purposes of
    this subsection, the term `physician owner or investor' means a
    physician (or an immediate family member of such

    [[Page 689]]

    physician) with a direct or an indirect ownership or investment
    interest in the hospital.
    ``(6) Clarification.--Nothing in this subsection shall be
    construed as preventing the Secretary from revoking a hospital's
    provider agreement if not in compliance with regulations
    implementing section 1866.''.

    (b) Enforcement.--
    (1) <> Ensuring
    compliance.--The Secretary of Health and Human Services shall
    establish policies and procedures to ensure compliance with the
    requirements described in subsection (i)(1) of section 1877 of
    the Social Security Act, as added by subsection (a)(3),
    beginning on the date such requirements first apply. Such
    policies and procedures may include unannounced site reviews of
    hospitals.
    (2) <> Audits.--Beginning not later than
    November 1, 2011, the Secretary of Health and Human Services
    shall conduct audits to determine if hospitals violate the
    requirements referred to in paragraph (1).

    SEC. 6002. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP OR
    INVESTMENT INTERESTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et
    seq.) is amended by inserting after section 1128F the following new
    section:

    ``SEC. 1128G. <> TRANSPARENCY
    REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP OR INVESTMENT
    INTERESTS.

    ``(a) Transparency Reports.--
    ``(1) Payments or other transfers of value.--
    ``(A) In general.--On March 31, 2013, and on the
    90th day of each calendar year beginning thereafter, any
    applicable manufacturer that provides a payment or other
    transfer of value to a covered recipient (or to an
    entity or individual at the request of or designated on
    behalf of a covered recipient), shall submit to the
    Secretary, in such electronic form as the Secretary
    shall require, the following information with respect to
    the preceding calendar year:
    ``(i) The name of the covered recipient.
    ``(ii) The business address of the covered
    recipient and, in the case of a covered recipient
    who is a physician, the specialty and National
    Provider Identifier of the covered recipient.
    ``(iii) The amount of the payment or other
    transfer of value.
    ``(iv) The dates on which the payment or other
    transfer of value was provided to the covered
    recipient.
    ``(v) A description of the form of the payment
    or other transfer of value, indicated (as
    appropriate for all that apply) as--
    ``(I) cash or a cash equivalent;
    ``(II) in-kind items or services;
    ``(III) stock, a stock option, or
    any other ownership interest, dividend,
    profit, or other return on investment;
    or
    ``(IV) any other form of payment or
    other transfer of value (as defined by
    the Secretary).

    [[Page 690]]

    ``(vi) A description of the nature of the
    payment or other transfer of value, indicated (as
    appropriate for all that apply) as--
    ``(I) consulting fees;
    ``(II) compensation for services
    other than consulting;
    ``(III) honoraria;
    ``(IV) gift;
    ``(V) entertainment;
    ``(VI) food;
    ``(VII) travel (including the
    specified destinations);
    ``(VIII) education;
    ``(IX) research;
    ``(X) charitable contribution;
    ``(XI) royalty or license;
    ``(XII) current or prospective
    ownership or investment interest;
    ``(XIII) direct compensation for
    serving as faculty or as a speaker for a
    medical education program;
    ``(XIV) grant; or
    ``(XV) any other nature of the
    payment or other transfer of value (as
    defined by the Secretary).
    ``(vii) If the payment or other transfer of
    value is related to marketing, education, or
    research specific to a covered drug, device,
    biological, or medical supply, the name of that
    covered drug, device, biological, or medical
    supply.
    ``(viii) Any other categories of information
    regarding the payment or other transfer of value
    the Secretary determines appropriate.
    ``(B) Special rule for certain payments or other
    transfers of value.--In the case where an applicable
    manufacturer provides a payment or other transfer of
    value to an entity or individual at the request of or
    designated on behalf of a covered recipient, the
    applicable manufacturer shall disclose that payment or
    other transfer of value under the name of the covered
    recipient.
    ``(2) Physician ownership.--In addition to the requirement
    under paragraph (1)(A), on March 31, 2013, and on the 90th day
    of each calendar year beginning thereafter, any applicable
    manufacturer or applicable group purchasing organization shall
    submit to the Secretary, in such electronic form as the
    Secretary shall require, the following information regarding any
    ownership or investment interest (other than an ownership or
    investment interest in a publicly traded security and mutual
    fund, as described in section 1877(c)) held by a physician (or
    an immediate family member of such physician (as defined for
    purposes of section 1877(a))) in the applicable manufacturer or
    applicable group purchasing organization during the preceding
    year:
    ``(A) The dollar amount invested by each physician
    holding such an ownership or investment interest.
    ``(B) The value and terms of each such ownership or
    investment interest.

    [[Page 691]]

    ``(C) Any payment or other transfer of value
    provided to a physician holding such an ownership or
    investment interest (or to an entity or individual at
    the request of or designated on behalf of a physician
    holding such an ownership or investment interest),
    including the information described in clauses (i)
    through (viii) of paragraph (1)(A), except that in
    applying such clauses, `physician' shall be substituted
    for `covered recipient' each place it appears.
    ``(D) Any other information regarding the ownership
    or investment interest the Secretary determines
    appropriate.

    ``(b) Penalties for Noncompliance.--
    ``(1) Failure to report.--
    ``(A) In general.--Subject to subparagraph (B)
    except as provided in paragraph (2), any applicable
    manufacturer or applicable group purchasing organization
    that fails to submit information required under
    subsection (a) in a timely manner in accordance with
    rules or regulations promulgated to carry out such
    subsection, shall be subject to a civil money penalty of
    not less than $1,000, but not more than $10,000, for
    each payment or other transfer of value or ownership or
    investment interest not reported as required under such
    subsection. Such penalty shall be imposed and collected
    in the same manner as civil money penalties under
    subsection (a) of section 1128A are imposed and
    collected under that section.
    ``(B) Limitation.--The total amount of civil money
    penalties imposed under subparagraph (A) with respect to
    each annual submission of information under subsection
    (a) by an applicable manufacturer or applicable group
    purchasing organization shall not exceed $150,000.
    ``(2) Knowing failure to report.--
    ``(A) In general.--Subject to subparagraph (B), any
    applicable manufacturer or applicable group purchasing
    organization that knowingly fails to submit information
    required under subsection (a) in a timely manner in
    accordance with rules or regulations promulgated to
    carry out such subsection, shall be subject to a civil
    money penalty of not less than $10,000, but not more
    than $100,000, for each payment or other transfer of
    value or ownership or investment interest not reported
    as required under such subsection. Such penalty shall be
    imposed and collected in the same manner as civil money
    penalties under subsection (a) of section 1128A are
    imposed and collected under that section.
    ``(B) Limitation.--The total amount of civil money
    penalties imposed under subparagraph (A) with respect to
    each annual submission of information under subsection
    (a) by an applicable manufacturer or applicable group
    purchasing organization shall not exceed $1,000,000.
    ``(3) Use of funds.--Funds collected by the Secretary as a
    result of the imposition of a civil money penalty under this
    subsection shall be used to carry out this section.

    ``(c) Procedures for Submission of Information and Public
    Availability.--
    ``(1) In general.--

    [[Page 692]]

    ``(A) <> Establishment.--Not later
    than October 1, 2011, the Secretary shall establish
    procedures--
    ``(i) for applicable manufacturers and
    applicable group purchasing organizations to
    submit information to the Secretary under
    subsection (a); and
    ``(ii) for the Secretary to make such
    information submitted available to the public.
    ``(B) Definition of terms.--The procedures
    established under subparagraph (A) shall provide for the
    definition of terms (other than those terms defined in
    subsection (e)), as appropriate, for purposes of this
    section.
    ``(C) <> Public
    availability.--Except as provided in subparagraph (E),
    the procedures established under subparagraph (A)(ii)
    shall ensure that, not later than September 30, 2013,
    and on June 30 of each calendar year beginning
    thereafter, the information submitted under subsection
    (a) with respect to the preceding calendar year is made
    available through an Internet website that--
    ``(i) is searchable and is in a format that is
    clear and understandable;
    ``(ii) contains information that is presented
    by the name of the applicable manufacturer or
    applicable group purchasing organization, the name
    of the covered recipient, the business address of
    the covered recipient, the specialty of the
    covered recipient, the value of the payment or
    other transfer of value, the date on which the
    payment or other transfer of value was provided to
    the covered recipient, the form of the payment or
    other transfer of value, indicated (as
    appropriate) under subsection (a)(1)(A)(v), the
    nature of the payment or other transfer of value,
    indicated (as appropriate) under subsection
    (a)(1)(A)(vi), and the name of the covered drug,
    device, biological, or medical supply, as
    applicable;
    ``(iii) contains information that is able to
    be easily aggregated and downloaded;
    ``(iv) contains a description of any
    enforcement actions taken to carry out this
    section, including any penalties imposed under
    subsection (b), during the preceding year;
    ``(v) contains background information on
    industry-physician relationships;
    ``(vi) in the case of information submitted
    with respect to a payment or other transfer of
    value described in subparagraph (E)(i), lists such
    information separately from the other information
    submitted under subsection (a) and designates such
    separately listed information as funding for
    clinical research;
    ``(vii) contains any other information the
    Secretary determines would be helpful to the
    average consumer;
    ``(viii) does not contain the National
    Provider Identifier of the covered recipient, and
    ``(ix) subject to subparagraph (D), provides
    the applicable manufacturer, applicable group
    purchasing organization, or covered recipient an
    opportunity to review and submit corrections to
    the information submitted with respect to the
    applicable manufacturer,

    [[Page 693]]

    applicable group purchasing organization, or
    covered recipient, respectively, for a period of
    not less than 45 days prior to such information
    being made available to the public.
    ``(D) Clarification of time period for review and
    corrections.--In no case may the 45-day period for
    review and submission of corrections to information
    under subparagraph (C)(ix) prevent such information from
    being made available to the public in accordance with
    the dates described in the matter preceding clause (i)
    in subparagraph (C).
    ``(E) Delayed publication for payments made pursuant
    to product research or development agreements and
    clinical investigations.--
    ``(i) In general.--In the case of information
    submitted under subsection (a) with respect to a
    payment or other transfer of value made to a
    covered recipient by an applicable manufacturer
    pursuant to a product research or development
    agreement for services furnished in connection
    with research on a potential new medical
    technology or a new application of an existing
    medical technology or the development of a new
    drug, device, biological, or medical supply, or by
    an applicable manufacturer in connection with a
    clinical investigation regarding a new drug,
    device, biological, or medical supply, the
    procedures established under subparagraph (A)(ii)
    shall provide that such information is made
    available to the public on the first date
    described in the matter preceding clause (i) in
    subparagraph (C) after the earlier of the
    following:
    ``(I) The date of the approval or
    clearance of the covered drug, device,
    biological, or medical supply by the
    Food and Drug Administration.
    ``(II) Four calendar years after the
    date such payment or other transfer of
    value was made.
    ``(ii) Confidentiality of information prior to
    publication.--Information described in clause (i)
    shall be considered confidential and shall not be
    subject to disclosure under section 552 of title
    5, United States Code, or any other similar
    Federal, State, or local law, until on or after
    the date on which the information is made
    available to the public under such clause.
    ``(2) Consultation.--In establishing the procedures under
    paragraph (1), the Secretary shall consult with the Inspector
    General of the Department of Health and Human Services, affected
    industry, consumers, consumer advocates, and other interested
    parties in order to ensure that the information made available
    to the public under such paragraph is presented in the
    appropriate overall context.

    ``(d) Annual Reports and Relation to State Laws.--
    ``(1) Annual report to congress.--Not later than April 1 of
    each year beginning with 2013, the Secretary shall submit to
    Congress a report that includes the following:
    ``(A) The information submitted under subsection (a)
    during the preceding year, aggregated for each
    applicable manufacturer and applicable group purchasing
    organization that submitted such information during such
    year

    [[Page 694]]

    (except, in the case of information submitted with
    respect to a payment or other transfer of value
    described in subsection (c)(1)(E)(i), such information
    shall be included in the first report submitted to
    Congress after the date on which such information is
    made available to the public under such subsection).
    ``(B) A description of any enforcement actions taken
    to carry out this section, including any penalties
    imposed under subsection (b), during the preceding year.
    ``(2) Annual reports to states.--Not later than September
    30, 2013 and on June 30 of each calendar year thereafter, the
    Secretary shall submit to States a report that includes a
    summary of the information submitted under subsection (a) during
    the preceding year with respect to covered recipients in the
    State (except, in the case of information submitted with respect
    to a payment or other transfer of value described in subsection
    (c)(1)(E)(i), such information shall be included in the first
    report submitted to States after the date on which such
    information is made available to the public under such
    subsection).
    ``(3) Relation to state laws.--
    ``(A) In general.--In the case of a payment or other
    transfer of value provided by an applicable manufacturer
    that is received by a covered recipient (as defined in
    subsection (e)) on or after January 1, 2012, subject to
    subparagraph (B), the provisions of this section shall
    preempt any statute or regulation of a State or of a
    political subdivision of a State that requires an
    applicable manufacturer (as so defined) to disclose or
    report, in any format, the type of information (as
    described in subsection (a)) regarding such payment or
    other transfer of value.
    ``(B) No preemption of additional requirements.--
    Subparagraph (A) shall not preempt any statute or
    regulation of a State or of a political subdivision of a
    State that requires the disclosure or reporting of
    information--
    ``(i) not of the type required to be disclosed
    or reported under this section;
    ``(ii) described in subsection (e)(10)(B),
    except in the case of information described in
    clause (i) of such subsection;
    ``(iii) by any person or entity other than an
    applicable manufacturer (as so defined) or a
    covered recipient (as defined in subsection (e));
    or
    ``(iv) to a Federal, State, or local
    governmental agency for public health
    surveillance, investigation, or other public
    health purposes or health oversight purposes.
    ``(C) Nothing in subparagraph (A) shall be construed
    to limit the discovery or admissibility of information
    described in such subparagraph in a criminal, civil, or
    administrative proceeding.
    ``(4) Consultation.--The Secretary shall consult with the
    Inspector General of the Department of Health and Human Services
    on the implementation of this section.

    ``(e) Definitions.--In this section:
    ``(1) Applicable group purchasing organization.--The term
    `applicable group purchasing organization' means a group

    [[Page 695]]

    purchasing organization (as defined by the Secretary) that
    purchases, arranges for, or negotiates the purchase of a covered
    drug, device, biological, or medical supply which is operating
    in the United States, or in a territory, possession, or
    commonwealth of the United States.
    ``(2) Applicable manufacturer.--The term `applicable
    manufacturer' means a manufacturer of a covered drug, device,
    biological, or medical supply which is operating in the United
    States, or in a territory, possession, or commonwealth of the
    United States.
    ``(3) Clinical investigation.--The term `clinical
    investigation' means any experiment involving 1 or more human
    subjects, or materials derived from human subjects, in which a
    drug or device is administered, dispensed, or used.
    ``(4) Covered device.--The term `covered device' means any
    device for which payment is available under title XVIII or a
    State plan under title XIX or XXI (or a waiver of such a plan).
    ``(5) Covered drug, device, biological, or medical supply.--
    The term `covered drug, device, biological, or medical supply'
    means any drug, biological product, device, or medical supply
    for which payment is available under title XVIII or a State plan
    under title XIX or XXI (or a waiver of such a plan).
    ``(6) Covered recipient.--
    ``(A) In general.--Except as provided in
    subparagraph (B), the term `covered recipient' means the
    following:
    ``(i) A physician.
    ``(ii) A teaching hospital.
    ``(B) Exclusion.--Such term does not include a
    physician who is an employee of the applicable
    manufacturer that is required to submit information
    under subsection (a).
    ``(7) Employee.--The term `employee' has the meaning given
    such term in section 1877(h)(2).
    ``(8) Knowingly.--The term `knowingly' has the meaning given
    such term in section 3729(b) of title 31, United States Code.
    ``(9) Manufacturer of a covered drug, device, biological, or
    medical supply.--The term `manufacturer of a covered drug,
    device, biological, or medical supply' means any entity which is
    engaged in the production, preparation, propagation,
    compounding, or conversion of a covered drug, device,
    biological, or medical supply (or any entity under common
    ownership with such entity which provides assistance or support
    to such entity with respect to the production, preparation,
    propagation, compounding, conversion, marketing, promotion,
    sale, or distribution of a covered drug, device, biological, or
    medical supply).
    ``(10) Payment or other transfer of value.--
    ``(A) In general.--The term `payment or other
    transfer of value' means a transfer of anything of
    value. Such term does not include a transfer of anything
    of value that is made indirectly to a covered recipient
    through a third party in connection with an activity or
    service in the case where the applicable manufacturer is
    unaware of the identity of the covered recipient.

    [[Page 696]]

    ``(B) Exclusions.--An applicable manufacturer shall
    not be required to submit information under subsection
    (a) with respect to the following:
    ``(i) A transfer of anything the value of
    which is less than $10, unless the aggregate
    amount transferred to, requested by, or designated
    on behalf of the covered recipient by the
    applicable manufacturer during the calendar year
    exceeds $100. For calendar years after 2012, the
    dollar amounts specified in the preceding sentence
    shall be increased by the same percentage as the
    percentage increase in the consumer price index
    for all urban consumers (all items; U.S. city
    average) for the 12-month period ending with June
    of the previous year.
    ``(ii) Product samples that are not intended
    to be sold and are intended for patient use.
    ``(iii) Educational materials that directly
    benefit patients or are intended for patient use.
    ``(iv) The loan of a covered device for a
    short-term trial period, not to exceed 90 days, to
    permit evaluation of the covered device by the
    covered recipient.
    ``(v) Items or services provided under a
    contractual warranty, including the replacement of
    a covered device, where the terms of the warranty
    are set forth in the purchase or lease agreement
    for the covered device.
    ``(vi) A transfer of anything of value to a
    covered recipient when the covered recipient is a
    patient and not acting in the professional
    capacity of a covered recipient.
    ``(vii) Discounts (including rebates).
    ``(viii) In-kind items used for the provision
    of charity care.
    ``(ix) A dividend or other profit distribution
    from, or ownership or investment interest in, a
    publicly traded security and mutual fund (as
    described in section 1877(c)).
    ``(x) In the case of an applicable
    manufacturer who offers a self-insured plan,
    payments for the provision of health care to
    employees under the plan.
    ``(xi) In the case of a covered recipient who
    is a licensed non-medical professional, a transfer
    of anything of value to the covered recipient if
    the transfer is payment solely for the non-medical
    professional services of such licensed non-medical
    professional.
    ``(xii) In the case of a covered recipient who
    is a physician, a transfer of anything of value to
    the covered recipient if the transfer is payment
    solely for the services of the covered recipient
    with respect to a civil or criminal action or an
    administrative proceeding.
    ``(11) Physician.--The term `physician' has the meaning
    given that term in section 1861(r).''.

    [[Page 697]]

    SEC. 6003. DISCLOSURE REQUIREMENTS FOR IN-OFFICE ANCILLARY SERVICES
    EXCEPTION TO THE PROHIBITION ON PHYSICIAN SELF-REFERRAL FOR
    CERTAIN IMAGING SERVICES.

    (a) In General.--Section 1877(b)(2) of the Social Security Act (42
    U.S.C. 1395nn(b)(2)) is amended by adding at the end the following new
    sentence: ``Such requirements shall, with respect to magnetic resonance
    imaging, computed tomography, positron emission tomography, and any
    other designated health services specified under subsection (h)(6)(D)
    that the Secretary determines appropriate, include a requirement that
    the referring physician inform the individual in writing at the time of
    the referral that the individual may obtain the services for which the
    individual is being referred from a person other than a person described
    in subparagraph (A)(i) and provide such individual with a written list
    of suppliers (as defined in section 1861(d)) who furnish such services
    in the area in which such individual resides.''.
    (b) Effective Date. <> --The amendment
    made by this section shall apply to services furnished on or after
    January 1, 2010.

    SEC. 6004. PRESCRIPTION DRUG SAMPLE TRANSPARENCY.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et
    seq.), as amended by section 6002, is amended by inserting after section
    1128G the following new section:

    ``SEC. 1128H. <> REPORTING OF INFORMATION
    RELATING TO DRUG SAMPLES.

    ``(a) In General.--Not later than April 1 of each year (beginning
    with 2012), each manufacturer and authorized distributor of record of an
    applicable drug shall submit to the Secretary (in a form and manner
    specified by the Secretary) the following information with respect to
    the preceding year:
    ``(1) In the case of a manufacturer or authorized
    distributor of record which makes distributions by mail or
    common carrier under subsection (d)(2) of section 503 of the
    Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353), the
    identity and quantity of drug samples requested and the identity
    and quantity of drug samples distributed under such subsection
    during that year, aggregated by--
    ``(A) the name, address, professional designation,
    and signature of the practitioner making the request
    under subparagraph (A)(i) of such subsection, or of any
    individual who makes or signs for the request on behalf
    of the practitioner; and
    ``(B) any other category of information determined
    appropriate by the Secretary.
    ``(2) In the case of a manufacturer or authorized
    distributor of record which makes distributions by means other
    than mail or common carrier under subsection (d)(3) of such
    section 503, the identity and quantity of drug samples requested
    and the identity and quantity of drug samples distributed under
    such subsection during that year, aggregated by--
    ``(A) the name, address, professional designation,
    and signature of the practitioner making the request
    under subparagraph (A)(i) of such subsection, or of any
    individual who makes or signs for the request on behalf
    of the practitioner; and

    [[Page 698]]

    ``(B) any other category of information determined
    appropriate by the Secretary.

    ``(b) Definitions.--In this section:
    ``(1) Applicable drug.--The term `applicable drug' means a
    drug--
    ``(A) which is subject to subsection (b) of such
    section 503; and
    ``(B) for which payment is available under title
    XVIII or a State plan under title XIX or XXI (or a
    waiver of such a plan).
    ``(2) Authorized distributor of record.--The term
    `authorized distributor of record' has the meaning given that
    term in subsection (e)(3)(A) of such section.
    ``(3) Manufacturer.--The term `manufacturer' has the meaning
    given that term for purposes of subsection (d) of such
    section.''.

    SEC. 6005. <> PHARMACY BENEFIT MANAGERS
    TRANSPARENCY REQUIREMENTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et
    seq.) is amended by inserting after section 1150 the following new
    section:

    ``SEC. 1150A. PHARMACY BENEFIT MANAGERS TRANSPARENCY REQUIREMENTS.

    ``(a) Provision of Information.--A health benefits plan or any
    entity that provides pharmacy benefits management services on behalf of
    a health benefits plan (in this section referred to as a `PBM') that
    manages prescription drug coverage under a contract with--
    ``(1) a PDP sponsor of a prescription drug plan or an MA
    organization offering an MA-PD plan under part D of title XVIII;
    or
    ``(2) a qualified health benefits plan offered through an
    exchange established by a State under section 1311 of the
    Patient Protection and Affordable Care Act,

    shall provide the information described in subsection (b) to the
    Secretary and, in the case of a PBM, to the plan with which the PBM is
    under contract with, at such times, and in such form and manner, as the
    Secretary shall specify.
    ``(b) Information Described.--The information described in this
    subsection is the following with respect to services provided by a
    health benefits plan or PBM for a contract year:
    ``(1) The percentage of all prescriptions that were provided
    through retail pharmacies compared to mail order pharmacies, and
    the percentage of prescriptions for which a generic drug was
    available and dispensed (generic dispensing rate), by pharmacy
    type (which includes an independent pharmacy, chain pharmacy,
    supermarket pharmacy, or mass merchandiser pharmacy that is
    licensed as a pharmacy by the State and that dispenses
    medication to the general public), that is paid by the health
    benefits plan or PBM under the contract.
    ``(2) The aggregate amount, and the type of rebates,
    discounts, or price concessions (excluding bona fide service
    fees, which include but are not limited to distribution service
    fees, inventory management fees, product stocking allowances,
    and fees associated with administrative services agreements and
    patient care programs (such as medication compliance programs

    [[Page 699]]

    and patient education programs)) that the PBM negotiates that
    are attributable to patient utilization under the plan, and the
    aggregate amount of the rebates, discounts, or price concessions
    that are passed through to the plan sponsor, and the total
    number of prescriptions that were dispensed.
    ``(3) The aggregate amount of the difference between the
    amount the health benefits plan pays the PBM and the amount that
    the PBM pays retail pharmacies, and mail order pharmacies, and
    the total number of prescriptions that were dispensed.

    ``(c) Confidentiality.--Information disclosed by a health benefits
    plan or PBM under this section is confidential and shall not be
    disclosed by the Secretary or by a plan receiving the information,
    except that the Secretary may disclose the information in a form which
    does not disclose the identity of a specific PBM, plan, or prices
    charged for drugs, for the following purposes:
    ``(1) As the Secretary determines to be necessary to carry
    out this section or part D of title XVIII.
    ``(2) To permit the Comptroller General to review the
    information provided.
    ``(3) To permit the Director of the Congressional Budget
    Office to review the information provided.
    ``(4) To States to carry out section 1311 of the Patient
    Protection and Affordable Care Act.

    ``(d) Penalties. <> --The provisions of
    subsection (b)(3)(C) of section 1927 shall apply to a health benefits
    plan or PBM that fails to provide information required under subsection
    (a) on a timely basis or that knowingly provides false information in
    the same manner as such provisions apply to a manufacturer with an
    agreement under that section.''.

    Subtitle B--Nursing Home Transparency and Improvement

    PART I--IMPROVING TRANSPARENCY OF INFORMATION

    SEC. 6101. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL DISCLOSABLE
    PARTIES INFORMATION.

    (a) In General.--Section 1124 of the Social Security Act (42 U.S.C.
    1320a-3) is amended by adding at the end the following new subsection:
    ``(c) Required Disclosure of Ownership and Additional Disclosable
    Parties Information.--
    ``(1) Disclosure.--A facility shall have the information
    described in paragraph (2) available--
    ``(A) <> during the period
    beginning on the date of the enactment of this
    subsection and ending on the date such information is
    made available to the public under section 6101(b) of
    the Patient Protection and Affordable Care Act for
    submission to the Secretary, the Inspector General of
    the Department of Health and Human Services, the State
    in which the facility is located, and the State long-
    term care ombudsman in the case where the Secretary, the

    [[Page 700]]

    Inspector General, the State, or the State long-term
    care ombudsman requests such information; and
    ``(B) beginning on the effective date of the final
    regulations promulgated under paragraph (3)(A), for
    reporting such information in accordance with such final
    regulations.
    Nothing in subparagraph (A) shall be construed as authorizing a
    facility to dispose of or delete information described in such
    subparagraph after the effective date of the final regulations
    promulgated under paragraph (3)(A).
    ``(2) Information described.--
    ``(A) In general.--The following information is
    described in this paragraph:
    ``(i) The information described in subsections
    (a) and (b), subject to subparagraph (C).
    ``(ii) The identity of and information on--
    ``(I) each member of the governing
    body of the facility, including the
    name, title, and period of service of
    each such member;
    ``(II) each person or entity who is
    an officer, director, member, partner,
    trustee, or managing employee of the
    facility, including the name, title, and
    period of service of each such person or
    entity; and
    ``(III) each person or entity who is
    an additional disclosable party of the
    facility.
    ``(iii) The organizational structure of each
    additional disclosable party of the facility and a
    description of the relationship of each such
    additional disclosable party to the facility and
    to one another.
    ``(B) Special rule where information is already
    reported or submitted.--To the extent that information
    reported by a facility to the Internal Revenue Service
    on Form 990, information submitted by a facility to the
    Securities and Exchange Commission, or information
    otherwise submitted to the Secretary or any other
    Federal agency contains the information described in
    clauses (i), (ii), or (iii) of subparagraph (A), the
    facility may provide such Form or such information
    submitted to meet the requirements of paragraph (1).
    ``(C) Special rule.--In applying subparagraph
    (A)(i)--
    ``(i) with respect to subsections (a) and (b),
    `ownership or control interest' shall include
    direct or indirect interests, including such
    interests in intermediate entities; and
    ``(ii) subsection (a)(3)(A)(ii) shall include
    the owner of a whole or part interest in any
    mortgage, deed of trust, note, or other obligation
    secured, in whole or in part, by the entity or any
    of the property or assets thereof, if the interest
    is equal to or exceeds 5 percent of the total
    property or assets of the entirety.
    ``(3) Reporting.--
    ``(A) In general. <> --Not later than
    the date that is 2 years after the date of the enactment
    of this subsection, the Secretary shall promulgate final
    regulations requiring, effective on the date that is 90
    days after the date on which such final regulations are
    published in the Federal Register, a facility to report
    the information described in

    [[Page 701]]

    paragraph (2) to the Secretary in a standardized format,
    and such other regulations as are necessary to carry out
    this subsection. <> Such final
    regulations shall ensure that the facility certifies, as
    a condition of participation and payment under the
    program under title XVIII or XIX, that the information
    reported by the facility in accordance with such final
    regulations is, to the best of the facility's knowledge,
    accurate and current.
    ``(B) Guidance.--The Secretary shall provide
    guidance and technical assistance to States on how to
    adopt the standardized format under subparagraph (A).
    ``(4) No effect on existing reporting requirements.--Nothing
    in this subsection shall reduce, diminish, or alter any
    reporting requirement for a facility that is in effect as of the
    date of the enactment of this subsection.
    ``(5) Definitions.--In this subsection:
    ``(A) Additional disclosable party.--The term
    `additional disclosable party' means, with respect to a
    facility, any person or entity who--
    ``(i) exercises operational, financial, or
    managerial control over the facility or a part
    thereof, or provides policies or procedures for
    any of the operations of the facility, or provides
    financial or cash management services to the
    facility;
    ``(ii) leases or subleases real property to
    the facility, or owns a whole or part interest
    equal to or exceeding 5 percent of the total value
    of such real property; or
    ``(iii) provides management or administrative
    services, management or clinical consulting
    services, or accounting or financial services to
    the facility.
    ``(B) Facility.--The term `facility' means a
    disclosing entity which is--
    ``(i) a skilled nursing facility (as defined
    in section 1819(a)); or
    ``(ii) a nursing facility (as defined in
    section 1919(a)).
    ``(C) Managing employee.--The term `managing
    employee' means, with respect to a facility, an
    individual (including a general manager, business
    manager, administrator, director, or consultant) who
    directly or indirectly manages, advises, or supervises
    any element of the practices, finances, or operations of
    the facility.
    ``(D) Organizational structure.--The term
    `organizational structure' means, in the case of--
    ``(i) a corporation, the officers, directors,
    and shareholders of the corporation who have an
    ownership interest in the corporation which is
    equal to or exceeds 5 percent;
    ``(ii) a limited liability company, the
    members and managers of the limited liability
    company (including, as applicable, what percentage
    each member and manager has of the ownership
    interest in the limited liability company);
    ``(iii) a general partnership, the partners of
    the general partnership;

    [[Page 702]]

    ``(iv) a limited partnership, the general
    partners and any limited partners of the limited
    partnership who have an ownership interest in the
    limited partnership which is equal to or exceeds
    10 percent;
    ``(v) a trust, the trustees of the trust;
    ``(vi) an individual, contact information for
    the individual; and
    ``(vii) any other person or entity, such
    information as the Secretary determines
    appropriate.''.

    (b) Public Availability of
    Information. <> --Not
    later than the date that is 1 year after the date on which the final
    regulations promulgated under section 1124(c)(3)(A) of the Social
    Security Act, as added by subsection (a), are published in the Federal
    Register, the Secretary of Health and Human Services shall make the
    information reported in accordance with such final regulations available
    to the public in accordance with procedures established by the
    Secretary.

    (c) Conforming Amendments.--
    (1) In general.--
    (A) Skilled nursing facilities.--Section 1819(d)(1)
    of the Social Security Act (42 U.S.C. 1395i-3(d)(1)) is
    amended by striking subparagraph (B) and redesignating
    subparagraph (C) as subparagraph (B).
    (B) Nursing facilities.--Section 1919(d)(1) of the
    Social Security Act (42 U.S.C. 1396r(d)(1)) is amended
    by striking subparagraph (B) and redesignating
    subparagraph (C) as subparagraph (B).
    (2) <> Effective date.--The
    amendments made by paragraph (1) shall take effect on the date
    on which the Secretary makes the information described in
    subsection (b)(1) available to the public under such subsection.

    SEC. 6102. ACCOUNTABILITY REQUIREMENTS FOR SKILLED NURSING FACILITIES
    AND NURSING FACILITIES.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et
    seq.), as amended by sections 6002 and 6004, is amended by inserting
    after section 1128H the following new section:

    ``SEC. 1128I. <> ACCOUNTABILITY REQUIREMENTS FOR
    FACILITIES.

    ``(a) Definition of Facility.--In this section, the term `facility'
    means--
    ``(1) a skilled nursing facility (as defined in section
    1819(a)); or
    ``(2) a nursing facility (as defined in section 1919(a)).

    ``(b) Effective Compliance and Ethics Programs.--
    ``(1) Requirement. <> --On or after
    the date that is 36 months after the date of the enactment of
    this section, a facility shall, with respect to the entity that
    operates the facility (in this subparagraph referred to as the
    `operating organization' or `organization'), have in operation a
    compliance and ethics program that is effective in preventing
    and detecting criminal, civil, and administrative violations
    under this Act and in promoting quality of care consistent with
    regulations developed under paragraph (2).
    ``(2) <> Development of regulations.--
    ``(A) In general.--Not later than the date that is 2
    years after such date of the enactment, the Secretary,

    [[Page 703]]

    working jointly with the Inspector General of the
    Department of Health and Human Services, shall
    promulgate regulations for an effective compliance and
    ethics program for operating organizations, which may
    include a model compliance program.
    ``(B)  Design of regulations.--Such regulations with
    respect to specific elements or formality of a program
    shall, in the case of an organization that operates 5 or
    more facilities, vary with the size of the organization,
    such that larger organizations should have a more formal
    program and include established written policies
    defining the standards and procedures to be followed by
    its employees. Such requirements may specifically apply
    to the corporate level management of multi unit nursing
    home chains.
    ``(C) Evaluation.--Not later than 3 years after the
    date of the promulgation of regulations under this
    paragraph, the Secretary shall complete an evaluation of
    the compliance and ethics programs required to be
    established under this subsection. Such evaluation shall
    determine if such programs led to changes in deficiency
    citations, changes in quality performance, or changes in
    other metrics of patient quality of
    care. <> The Secretary shall submit to
    Congress a report on such evaluation and shall include
    in such report such recommendations regarding changes in
    the requirements for such programs as the Secretary
    determines appropriate.
    ``(3) Requirements for compliance and ethics
    programs. <> --In this subsection, the term
    `compliance and ethics program' means, with respect to a
    facility, a program of the operating organization that--
    ``(A) has been reasonably designed, implemented, and
    enforced so that it generally will be effective in
    preventing and detecting criminal, civil, and
    administrative violations under this Act and in
    promoting quality of care; and
    ``(B) includes at least the required components
    specified in paragraph (4).
    ``(4) Required components of program.--The required
    components of a compliance and ethics program of an operating
    organization are the following:
    ``(A) The organization must have established
    compliance standards and procedures to be followed by
    its employees and other agents that are reasonably
    capable of reducing the prospect of criminal, civil, and
    administrative violations under this Act.
    ``(B) Specific individuals within high-level
    personnel of the organization must have been assigned
    overall responsibility to oversee compliance with such
    standards and procedures and have sufficient resources
    and authority to assure such compliance.
    ``(C) The organization must have used due care not
    to delegate substantial discretionary authority to
    individuals whom the organization knew, or should have
    known through the exercise of due diligence, had a
    propensity to engage in criminal, civil, and
    administrative violations under this Act.
    ``(D) The organization must have taken steps to
    communicate effectively its standards and procedures to
    all

    [[Page 704]]

    employees and other agents, such as by requiring
    participation in training programs or by disseminating
    publications that explain in a practical manner what is
    required.
    ``(E) The organization must have taken reasonable
    steps to achieve compliance with its standards, such as
    by utilizing monitoring and auditing systems reasonably
    designed to detect criminal, civil, and administrative
    violations under this Act by its employees and other
    agents and by having in place and publicizing a
    reporting system whereby employees and other agents
    could report violations by others within the
    organization without fear of retribution.
    ``(F) The standards must have been consistently
    enforced through appropriate disciplinary mechanisms,
    including, as appropriate, discipline of individuals
    responsible for the failure to detect an offense.
    ``(G) After an offense has been detected, the
    organization must have taken all reasonable steps to
    respond appropriately to the offense and to prevent
    further similar offenses, including any necessary
    modification to its program to prevent and detect
    criminal, civil, and administrative violations under
    this Act.
    ``(H) The organization must periodically undertake
    reassessment of its compliance program to identify
    changes necessary to reflect changes within the
    organization and its facilities.

    ``(c) Quality Assurance and Performance Improvement Program.--
    ``(1) In general. <> --Not later than
    December 31, 2011, the Secretary shall establish and implement a
    quality assurance and performance improvement program (in this
    subparagraph referred to as the `QAPI program') for facilities,
    including multi unit chains of
    facilities. <> Under the QAPI program, the
    Secretary shall establish standards relating to quality
    assurance and performance improvement with respect to facilities
    and provide technical assistance to facilities on the
    development of best practices in order to meet such
    standards. <> Not later than 1 year after the date
    on which the regulations are promulgated under paragraph (2), a
    facility must submit to the Secretary a plan for the facility to
    meet such standards and implement such best practices, including
    how to coordinate the implementation of such plan with quality
    assessment and assurance activities conducted under sections
    1819(b)(1)(B) and 1919(b)(1)(B), as applicable.
    ``(2) Regulations.--The Secretary shall promulgate
    regulations to carry out this subsection.''.

    SEC. 6103. NURSING HOME COMPARE MEDICARE WEBSITE.

    (a) Skilled Nursing Facilities.--
    (1) In general.--Section 1819 of the Social Security Act (42
    U.S.C. 1395i-3) is amended--
    (A) by redesignating subsection (i) as subsection
    (j); and
    (B) by inserting after subsection (h) the following
    new subsection:

    ``(i) Nursing Home Compare Website.--
    ``(1) Inclusion of additional information.--

    [[Page 705]]

    ``(A) In general.--The Secretary shall ensure that
    the Department of Health and Human Services includes, as
    part of the information provided for comparison of
    nursing homes on the official Internet website of the
    Federal Government for Medicare beneficiaries (commonly
    referred to as the `Nursing Home Compare' Medicare
    website) (or a successor website), the following
    information in a manner that is prominent, updated on a
    timely basis, easily accessible, readily understandable
    to consumers of long-term care services, and searchable:
    ``(i) Staffing data for each facility
    (including resident census data and data on the
    hours of care provided per resident per day) based
    on data submitted under section 1128I(g),
    including information on staffing turnover and
    tenure, in a format that is clearly understandable
    to consumers of long-term care services and allows
    such consumers to compare differences in staffing
    between facilities and State and national averages
    for the facilities. Such format shall include--
    ``(I) concise explanations of how to
    interpret the data (such as a plain
    English explanation of data reflecting
    `nursing home staff hours per resident
    day');
    ``(II) differences in types of staff
    (such as training associated with
    different categories of staff);
    ``(III) the relationship between
    nurse staffing levels and quality of
    care; and
    ``(IV) an explanation that
    appropriate staffing levels vary based
    on patient case mix.
    ``(ii) Links to State Internet websites with
    information regarding State survey and
    certification programs, links to Form 2567 State
    inspection reports (or a successor form) on such
    websites, information to guide consumers in how to
    interpret and understand such reports, and the
    facility plan of correction or other response to
    such report. Any such links shall be posted on a
    timely basis.
    ``(iii) The standardized complaint form
    developed under section 1128I(f), including
    explanatory material on what complaint forms are,
    how they are used, and how to file a complaint
    with the State survey and certification program
    and the State long-term care ombudsman program.
    ``(iv) Summary information on the number,
    type, severity, and outcome of substantiated
    complaints.
    ``(v) The number of adjudicated instances of
    criminal violations by a facility or the employees
    of a facility--
    ``(I) that were committed inside the
    facility;
    ``(II) with respect to such
    instances of violations or crimes
    committed inside of the facility that
    were the violations or crimes of abuse,
    neglect, and exploitation, criminal
    sexual abuse, or other violations or
    crimes that resulted in serious bodily
    injury; and

    [[Page 706]]

    ``(III) the number of civil monetary
    penalties levied against the facility,
    employees, contractors, and other
    agents.
    ``(B) Deadline for provision of information.--
    ``(i) In general.--Except as provided in
    clause (ii), the Secretary shall ensure that the
    information described in subparagraph (A) is
    included on such website (or a successor website)
    not later than 1 year after the date of the
    enactment of this subsection.
    ``(ii) Exception.--The Secretary shall ensure
    that the information described in subparagraph
    (A)(i) is included on such website (or a successor
    website) not later than the date on which the
    requirements under section 1128I(g) are
    implemented.
    ``(2) Review and modification of website.--
    ``(A) In general. <> --The
    Secretary shall establish a process--
    ``(i) to review the accuracy, clarity of
    presentation, timeliness, and comprehensiveness of
    information reported on such website as of the day
    before the date of the enactment of this
    subsection; and
    ``(ii) <> not later than 1
    year after the date of the enactment of this
    subsection, to modify or revamp such website in
    accordance with the review conducted under clause
    (i).
    ``(B) Consultation.--In conducting the review under
    subparagraph (A)(i), the Secretary shall consult with--
    ``(i) State long-term care ombudsman programs;
    ``(ii) consumer advocacy groups;
    ``(iii) provider stakeholder groups; and
    ``(iv) any other representatives of programs
    or groups the Secretary determines appropriate.''.
    (2) Timeliness of submission of survey and certification
    information.--
    (A) In general.--Section 1819(g)(5) of the Social
    Security Act (42 U.S.C. 1395i-3(g)(5)) is amended by
    adding at the end the following new subparagraph:
    ``(E) Submission of survey and certification
    information to the secretary.--In order to improve the
    timeliness of information made available to the public
    under subparagraph (A) and provided on the Nursing Home
    Compare Medicare website under subsection (i), each
    State shall submit information respecting any survey or
    certification made respecting a skilled nursing facility
    (including any enforcement actions taken by the State)
    to the Secretary not later than the date on which the
    State sends such information to the facility. The
    Secretary shall use the information submitted under the
    preceding sentence to update the information provided on
    the Nursing Home Compare Medicare website as
    expeditiously as practicable but not less frequently
    than quarterly.''.
    (B) <> Effective date.--
    The amendment made by this paragraph shall take effect 1
    year after the date of the enactment of this Act.
    (3) Special focus facility program.--Section 1819(f) of the
    Social Security Act (42 U.S.C. 1395i-3(f)) is amended by adding
    at the end the following new paragraph:

    [[Page 707]]

    ``(8) Special focus facility program.--
    ``(A) In general.--The Secretary shall conduct a
    special focus facility program for enforcement of
    requirements for skilled nursing facilities that the
    Secretary has identified as having substantially failed
    to meet applicable requirement of this Act.
    ``(B) Periodic surveys.--Under such program the
    Secretary shall conduct surveys of each facility in the
    program not less than once every 6 months.''.

    (b) Nursing Facilities.--
    (1) In general.--Section 1919 of the Social Security Act (42
    U.S.C. 1396r) is amended--
    (A) by redesignating subsection (i) as subsection
    (j); and
    (B) by inserting after subsection (h) the following
    new subsection:

    ``(i) Nursing Home Compare Website.--
    ``(1) Inclusion of additional information.--
    ``(A) In general.--The Secretary shall ensure that
    the Department of Health and Human Services includes, as
    part of the information provided for comparison of
    nursing homes on the official Internet website of the
    Federal Government for Medicare beneficiaries (commonly
    referred to as the `Nursing Home Compare' Medicare
    website) (or a successor website), the following
    information in a manner that is prominent, updated on a
    timely basis, easily accessible, readily understandable
    to consumers of long-term care services, and searchable:
    ``(i) Staffing data for each facility
    (including resident census data and data on the
    hours of care provided per resident per day) based
    on data submitted under section 1128I(g),
    including information on staffing turnover and
    tenure, in a format that is clearly understandable
    to consumers of long-term care services and allows
    such consumers to compare differences in staffing
    between facilities and State and national averages
    for the facilities. Such format shall include--
    ``(I) concise explanations of how to
    interpret the data (such as plain
    English explanation of data reflecting
    `nursing home staff hours per resident
    day');
    ``(II) differences in types of staff
    (such as training associated with
    different categories of staff);
    ``(III) the relationship between
    nurse staffing levels and quality of
    care; and
    ``(IV) an explanation that
    appropriate staffing levels vary based
    on patient case mix.
    ``(ii) Links to State Internet websites with
    information regarding State survey and
    certification programs, links to Form 2567 State
    inspection reports (or a successor form) on such
    websites, information to guide consumers in how to
    interpret and understand such reports, and the
    facility plan of correction or other response to
    such report. Any such links shall be posted on a
    timely basis.

    [[Page 708]]

    ``(iii) The standardized complaint form
    developed under section 1128I(f), including
    explanatory material on what complaint forms are,
    how they are used, and how to file a complaint
    with the State survey and certification program
    and the State long-term care ombudsman program.
    ``(iv) Summary information on the number,
    type, severity, and outcome of substantiated
    complaints.
    ``(v) The number of adjudicated instances of
    criminal violations by a facility or the employees
    of a facility--
    ``(I) that were committed inside of
    the facility; and
    ``(II) with respect to such
    instances of violations or crimes
    committed outside of the facility, that
    were violations or crimes that resulted
    in the serious bodily injury of an
    elder.
    ``(B) Deadline for provision of information.--
    ``(i) In general.--Except as provided in
    clause (ii), the Secretary shall ensure that the
    information described in subparagraph (A) is
    included on such website (or a successor website)
    not later than 1 year after the date of the
    enactment of this subsection.
    ``(ii) Exception.--The Secretary shall ensure
    that the information described in subparagraph
    (A)(i) is included on such website (or a successor
    website) not later than the date on which the
    requirements under section 1128I(g) are
    implemented.
    ``(2) Review and modification of website.--
    ``(A) In general. <> --The
    Secretary shall establish a process--
    ``(i) to review the accuracy, clarity of
    presentation, timeliness, and comprehensiveness of
    information reported on such website as of the day
    before the date of the enactment of this
    subsection; and
    ``(ii) <> not later than 1
    year after the date of the enactment of this
    subsection, to modify or revamp such website in
    accordance with the review conducted under clause
    (i).
    ``(B) Consultation.--In conducting the review under
    subparagraph (A)(i), the Secretary shall consult with--
    ``(i) State long-term care ombudsman programs;
    ``(ii) consumer advocacy groups;
    ``(iii) provider stakeholder groups;
    ``(iv) skilled nursing facility employees and
    their representatives; and
    ``(v) any other representatives of programs or
    groups the Secretary determines appropriate.''.
    (2) Timeliness of submission of survey and certification
    information.--
    (A) In general.--Section 1919(g)(5) of the Social
    Security Act (42 U.S.C. 1396r(g)(5)) is amended by
    adding at the end the following new subparagraph:
    ``(E) <> Submission of survey and
    certification information to the secretary.--In order to
    improve the timeliness of information made available to
    the public under subparagraph (A) and provided on the
    Nursing Home

    [[Page 709]]

    Compare Medicare website under subsection (i), each
    State shall submit information respecting any survey or
    certification made respecting a nursing facility
    (including any enforcement actions taken by the State)
    to the Secretary not later than the date on which the
    State sends such information to the facility. The
    Secretary shall use the information submitted under the
    preceding sentence to update the information provided on
    the Nursing Home Compare Medicare website as
    expeditiously as practicable but not less frequently
    than quarterly.''.
    (B) Effective date. <> --
    The amendment made by this paragraph shall take effect 1
    year after the date of the enactment of this Act.
    (3) Special focus facility program.--Section 1919(f) of the
    Social Security Act (42 U.S.C. 1396r(f)) is amended by adding at
    the end of the following new paragraph:
    ``(10) Special focus facility program.--
    ``(A) In general.--The Secretary shall conduct a
    special focus facility program for enforcement of
    requirements for nursing facilities that the Secretary
    has identified as having substantially failed to meet
    applicable requirements of this Act.
    ``(B) Periodic surveys.--Under such program the
    Secretary shall conduct surveys of each facility in the
    program not less often than once every 6 months.''.

    (c) Availability of Reports on Surveys, Certifications, and
    Complaint Investigations.--
    (1) Skilled nursing facilities.--Section 1819(d)(1) of the
    Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by
    section 6101, is amended by adding at the end the following new
    subparagraph:
    ``(C) Availability of survey, certification, and
    complaint investigation reports.--A skilled nursing
    facility must--
    ``(i) have reports with respect to any
    surveys, certifications, and complaint
    investigations made respecting the facility during
    the 3 preceding years available for any individual
    to review upon request; and
    ``(ii) <> post
    notice of the availability of such reports in
    areas of the facility that are prominent and
    accessible to the public.
    The facility shall not make available under clause (i)
    identifying information about complainants or
    residents.''.
    (2) Nursing facilities.--Section 1919(d)(1) of the Social
    Security Act (42 U.S.C. 1396r(d)(1)), as amended by section
    6101, is amended by adding at the end the following new
    subparagraph:
    ``(V) Availability of survey, certification, and
    complaint investigation reports.--A nursing facility
    must--
    ``(i) have reports with respect to any
    surveys, certifications, and complaint
    investigations made respecting the facility during
    the 3 preceding years available for any individual
    to review upon request; and

    [[Page 710]]

    ``(ii) <> post
    notice of the availability of such reports in
    areas of the facility that are prominent and
    accessible to the public.
    The facility shall not make available under clause (i)
    identifying information about complainants or
    residents.''.
    (3) Effective date. <> --The
    amendments made by this subsection shall take effect 1 year
    after the date of the enactment of this Act.

    (d) Guidance to States on Form 2567 State Inspection Reports and
    Complaint Investigation Reports.--
    (1) Guidance. <> --
    The Secretary of Health and Human Services (in this subtitle
    referred to as the ``Secretary'') shall provide guidance to
    States on how States can establish electronic links to Form 2567
    State inspection reports (or a successor form), complaint
    investigation reports, and a facility's plan of correction or
    other response to such Form 2567 State inspection reports (or a
    successor form) on the Internet website of the State that
    provides information on skilled nursing facilities and nursing
    facilities and the Secretary shall, if possible, include such
    information on Nursing Home Compare.
    (2) Requirement.--Section 1902(a)(9) of the Social Security
    Act (42 U.S.C. 1396a(a)(9)) is amended--
    (A) by striking ``and'' at the end of subparagraph
    (B);
    (B) by striking the semicolon at the end of
    subparagraph (C) and inserting ``, and''; and
    (C) by adding at the end the following new
    subparagraph:
    ``(D) that the State maintain a consumer-oriented
    website providing useful information to consumers
    regarding all skilled nursing facilities and all nursing
    facilities in the State, including for each facility,
    Form 2567 State inspection reports (or a successor
    form), complaint investigation reports, the facility's
    plan of correction, and such other information that the
    State or the Secretary considers useful in assisting the
    public to assess the quality of long term care options
    and the quality of care provided by individual
    facilities;''.
    (3) <> Definitions.--In this
    subsection:
    (A) Nursing facility.--The term ``nursing facility''
    has the meaning given such term in section 1919(a) of
    the Social Security Act (42 U.S.C. 1396r(a)).
    (B) Secretary.--The term ``Secretary'' means the
    Secretary of Health and Human Services.
    (C) Skilled nursing facility.--The term ``skilled
    nursing facility'' has the meaning given such term in
    section 1819(a) of the Social Security Act (42 U.S.C.
    1395i-3(a)).

    (e) <> Development of Consumer
    Rights Information Page on Nursing Home Compare Website.--Not later than
    1 year after the date of enactment of this Act, the Secretary shall
    ensure that the Department of Health and Human Services, as part of the
    information provided for comparison of nursing facilities on the Nursing
    Home Compare Medicare website develops and includes a consumer rights
    information page that contains links to descriptions of, and information
    with respect to, the following:
    (1) The documentation on nursing facilities that is
    available to the public.

    [[Page 711]]

    (2) General information and tips on choosing a nursing
    facility that meets the needs of the individual.
    (3) General information on consumer rights with respect to
    nursing facilities.
    (4) The nursing facility survey process (on a national and
    State-specific basis).
    (5) On a State-specific basis, the services available
    through the State long-term care ombudsman for such State.

    SEC. 6104. REPORTING OF EXPENDITURES.

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

    SEC. 6105. STANDARDIZED COMPLAINT FORM.

    (a) In General.--Section 1128I of the Social Security Act, as added
    and amended by this Act, is amended by adding at the end the following
    new subsection:
    ``(f) <>  Standardized Complaint Form.--
    ``(1) Development by the secretary.--The Secretary shall
    develop a standardized complaint form for use by a resident

    [[Page 712]]

    (or a person acting on the resident's behalf) in filing a
    complaint with a State survey and certification agency and a
    State long-term care ombudsman program with respect to a
    facility.
    ``(2) Complaint forms and resolution processes.--
    ``(A) Complaint forms.--The State must make the
    standardized complaint form developed under paragraph
    (1) available upon request to--
    ``(i) a resident of a facility; and
    ``(ii) any person acting on the resident's
    behalf.
    ``(B) Complaint resolution process.--The State must
    establish a complaint resolution process in order to
    ensure that the legal representative of a resident of a
    facility or other responsible party is not denied access
    to such resident or otherwise retaliated against if they
    have complained about the quality of care provided by
    the facility or other issues relating to the facility.
    Such complaint resolution process shall include--
    ``(i) procedures to assure accurate tracking
    of complaints received, including notification to
    the complainant that a complaint has been
    received;
    ``(ii) procedures to determine the likely
    severity of a complaint and for the investigation
    of the complaint; and
    ``(iii) deadlines for responding to a
    complaint and for notifying the complainant of the
    outcome of the investigation.
    ``(3) Rule of construction.--Nothing in this subsection
    shall be construed as preventing a resident of a facility (or a
    person acting on the resident's behalf) from submitting a
    complaint in a manner or format other than by using the
    standardized complaint form developed under paragraph (1)
    (including submitting a complaint orally).''.

    (b) <> Effective Date.--The amendment
    made by this section shall take effect 1 year after the date of the
    enactment of this Act.

    SEC. 6106. ENSURING STAFFING ACCOUNTABILITY.

    Section 1128I of the Social Security Act, as added and amended by
    this Act, <> is amended by adding at the end the
    following new subsection:

    ``(g) Submission of Staffing Information Based on Payroll Data in a
    Uniform Format. <> --Beginning not later than 2 years
    after the date of the enactment of this subsection, and after consulting
    with State long-term care ombudsman programs, consumer advocacy groups,
    provider stakeholder groups, employees and their representatives, and
    other parties the Secretary deems appropriate, the Secretary shall
    require a facility to electronically submit to the Secretary direct care
    staffing information (including information with respect to agency and
    contract staff) based on payroll and other verifiable and auditable data
    in a uniform format (according to specifications established by the
    Secretary in consultation with such programs, groups, and parties). Such
    specifications shall require that the information submitted under the
    preceding sentence--
    ``(1) specify the category of work a certified employee
    performs (such as whether the employee is a registered nurse,

    [[Page 713]]

    licensed practical nurse, licensed vocational nurse, certified
    nursing assistant, therapist, or other medical personnel);
    ``(2) include resident census data and information on
    resident case mix;
    ``(3) include a regular reporting schedule; and
    ``(4) include information on employee turnover and tenure
    and on the hours of care provided by each category of certified
    employees referenced in paragraph (1) per resident per day.

    Nothing in this subsection shall be construed as preventing the
    Secretary from requiring submission of such information with respect to
    specific categories, such as nursing staff, before other categories of
    certified employees. Information under this subsection with respect to
    agency and contract staff shall be kept separate from information on
    employee staffing.''.

    SEC. 6107. GAO STUDY AND REPORT ON FIVE-STAR QUALITY RATING SYSTEM.

    (a) Study.--The Comptroller General of the United States (in this
    section referred to as the ``Comptroller General'') shall conduct a
    study on the Five-Star Quality Rating System for nursing homes of the
    Centers for Medicare & Medicaid Services. Such study shall include an
    analysis of--
    (1) how such system is being implemented;
    (2) any problems associated with such system or its
    implementation; and
    (3) how such system could be improved.

    (b) Report.--Not later than 2 years after the date of enactment of
    this Act, the Comptroller General shall submit to Congress a report
    containing the results of the study conducted under subsection (a),
    together with recommendations for such legislation and administrative
    action as the Comptroller General determines appropriate.

    PART II--TARGETING ENFORCEMENT

    SEC. 6111. CIVIL MONEY PENALTIES.

    (a) Skilled Nursing Facilities.--
    (1) In general.--Section 1819(h)(2)(B)(ii) of the Social
    Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended--
    (A) by striking ``Penalties.--The Secretary'' and
    inserting ``penalties.--
    ``(I) In general.--Subject to
    subclause (II), the Secretary''; and
    (B) by adding at the end the following new
    subclauses:
    ``(II) Reduction of civil money
    penalties in certain
    circumstances. <> --
    Subject to subclause (III), in the case
    where a facility self-reports and
    promptly corrects a deficiency for which
    a penalty was imposed under this clause
    not later than 10 calendar days after
    the date of such imposition, the
    Secretary may reduce the amount of the
    penalty imposed by not more than 50
    percent.
    ``(III) Prohibitions on reduction
    for certain deficiencies.--
    ``(aa) Repeat
    deficiencies.--The Secretary may
    not reduce the amount of a
    penalty under subclause (II) if
    the Secretary had

    [[Page 714]]

    reduced a penalty imposed on the
    facility in the preceding year
    under such subclause with
    respect to a repeat deficiency.
    ``(bb) Certain other
    deficiencies.--The Secretary may
    not reduce the amount of a
    penalty under subclause (II) if
    the penalty is imposed on the
    facility for a deficiency that
    is found to result in a pattern
    of harm or widespread harm,
    immediately jeopardizes the
    health or safety of a resident
    or residents of the facility, or
    results in the death of a
    resident of the facility.
    ``(IV) Collection of civil money
    penalties. <> --In
    the case of a civil money penalty
    imposed under this clause, the Secretary
    shall issue regulations that--

    ``(aa) <> subjec
    t to item (cc), not later than
    30 days after the imposition of
    the penalty, provide for the
    facility to have the opportunity
    to participate in an independent
    informal dispute resolution
    process which generates a
    written record prior to the
    collection of such penalty;
    ``(bb) <> in the case where the
    penalty is imposed for each day
    of noncompliance, provide that a
    penalty may not be imposed for
    any day during the period
    beginning on the initial day of
    the imposition of the penalty
    and ending on the day on which
    the informal dispute resolution
    process under item (aa) is
    completed;
    ``(cc) may provide for the
    collection of such civil money
    penalty and the placement of
    such amounts collected in an
    escrow account under the
    direction of the Secretary on
    the earlier of the date on which
    the informal dispute resolution
    process under item (aa) is
    completed or the date that is 90
    days after the date of the
    imposition of the penalty;
    ``(dd) may provide that such
    amounts collected are kept in
    such account pending the
    resolution of any subsequent
    appeals;
    ``(ee) in the case where the
    facility successfully appeals
    the penalty, may provide for the
    return of such amounts collected
    (plus interest) to the facility;
    and
    ``(ff) in the case where all
    such appeals are unsuccessful,
    may provide that some portion of
    such amounts collected may be
    used to support activities that
    benefit residents, including
    assistance to support and
    protect residents of a facility
    that closes (voluntarily or
    involuntarily) or is decertified
    (including offsetting costs of
    relocating residents to home and
    community-based settings or
    another facility), projects that
    support resident and

    [[Page 715]]

    family councils and other
    consumer involvement in assuring
    quality care in facilities, and
    facility improvement initiatives
    approved by the Secretary
    (including joint training of
    facility staff and surveyors,
    technical assistance for
    facilities implementing quality
    assurance programs, the
    appointment of temporary
    management firms, and other
    activities approved by the
    Secretary).''.
    (2) Conforming amendment.--The second sentence of section
    1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-3(h)(5))
    is amended by inserting ``(ii)(IV),'' after ``(i),''.

    (b) Nursing Facilities.--
    (1) In general.--Section 1919(h)(3)(C)(ii) of the Social
    Security Act (42 U.S.C. 1396r(h)(3)(C)) is amended--
    (A) by striking ``Penalties.--The Secretary'' and
    inserting ``penalties.--
    ``(I) In general.--Subject to
    subclause (II), the Secretary''; and
    (B) by adding at the end the following new
    subclauses:
    ``(II) Reduction of civil money
    penalties in certain
    circumstances. <> --
    Subject to subclause (III), in the case
    where a facility self-reports and
    promptly corrects a deficiency for which
    a penalty was imposed under this clause
    not later than 10 calendar days after
    the date of such imposition, the
    Secretary may reduce the amount of the
    penalty imposed by not more than 50
    percent.
    ``(III) Prohibitions on reduction
    for certain deficiencies.--
    ``(aa) Repeat
    deficiencies.--The Secretary may
    not reduce the amount of a
    penalty under subclause (II) if
    the Secretary had reduced a
    penalty imposed on the facility
    in the preceding year under such
    subclause with respect to a
    repeat deficiency.
    ``(bb) Certain other
    deficiencies.--The Secretary may
    not reduce the amount of a
    penalty under subclause (II) if
    the penalty is imposed on the
    facility for a deficiency that
    is found to result in a pattern
    of harm or widespread harm,
    immediately jeopardizes the
    health or safety of a resident
    or residents of the facility, or
    results in the death of a
    resident of the facility.
    ``(IV) Collection of civil money
    penalties. <> --In
    the case of a civil money penalty
    imposed under this clause, the Secretary
    shall issue regulations that--

    ``(aa) <> subjec
    t to item (cc), not later than
    30 days after the imposition of
    the penalty, provide for the
    facility to have the opportunity
    to participate in an independent
    informal dispute resolution
    process which generates a
    written record prior to the
    collection of such penalty;

    [[Page 716]]

    ``(bb) <> in the case where the
    penalty is imposed for each day
    of noncompliance, provide that a
    penalty may not be imposed for
    any day during the period
    beginning on the initial day of
    the imposition of the penalty
    and ending on the day on which
    the informal dispute resolution
    process under item (aa) is
    completed;
    ``(cc) may provide for the
    collection of such civil money
    penalty and the placement of
    such amounts collected in an
    escrow account under the
    direction of the Secretary on
    the earlier of the date on which
    the informal dispute resolution
    process under item (aa) is
    completed or the date that is 90
    days after the date of the
    imposition of the penalty;
    ``(dd) may provide that such
    amounts collected are kept in
    such account pending the
    resolution of any subsequent
    appeals;
    ``(ee) in the case where the
    facility successfully appeals
    the penalty, may provide for the
    return of such amounts collected
    (plus interest) to the facility;
    and
    ``(ff) in the case where all
    such appeals are unsuccessful,
    may provide that some portion of
    such amounts collected may be
    used to support activities that
    benefit residents, including
    assistance to support and
    protect residents of a facility
    that closes (voluntarily or
    involuntarily) or is decertified
    (including offsetting costs of
    relocating residents to home and
    community-based settings or
    another facility), projects that
    support resident and family
    councils and other consumer
    involvement in assuring quality
    care in facilities, and facility
    improvement initiatives approved
    by the Secretary (including
    joint training of facility staff
    and surveyors, technical
    assistance for facilities
    implementing quality assurance
    programs, the appointment of
    temporary management firms, and
    other activities approved by the
    Secretary).''.
    (2) Conforming amendment.--Section 1919(h)(5)(8) of the
    Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is amended by
    inserting ``(ii)(IV),'' after ``(i),''.

    (c) <> Effective Date.--The amendments
    made by this section shall take effect 1 year after the date of the
    enactment of this Act.

    SEC. 6112. <> NATIONAL INDEPENDENT MONITOR
    DEMONSTRATION PROJECT.

    (a) Establishment.--
    (1) In general.--The Secretary, in consultation with the
    Inspector General of the Department of Health and Human
    Services, shall conduct a demonstration project to develop,
    test, and implement an independent monitor program to oversee

    [[Page 717]]

    interstate and large intrastate chains of skilled nursing
    facilities and nursing facilities.
    (2) Selection.--The Secretary shall select chains of skilled
    nursing facilities and nursing facilities described in paragraph
    (1) to participate in the demonstration project under this
    section from among those chains that submit an application to
    the Secretary at such time, in such manner, and containing such
    information as the Secretary may require.
    (3) Duration.--The Secretary shall conduct the demonstration
    project under this section for a 2-year period.
    (4) Implementation. <> --The Secretary
    shall implement the demonstration project under this section not
    later than 1 year after the date of the enactment of this Act.

    (b) Requirements. <> --The Secretary shall
    evaluate chains selected to participate in the demonstration project
    under this section based on criteria selected by the Secretary,
    including where evidence suggests that a number of the facilities of the
    chain are experiencing serious safety and quality of care problems. Such
    criteria may include the evaluation of a chain that includes a number of
    facilities participating in the ``Special Focus Facility'' program (or a
    successor program) or multiple facilities with a record of repeated
    serious safety and quality of care deficiencies.

    (c) Responsibilities. <> --An independent monitor
    that enters into a contract with the Secretary to participate in the
    conduct of the demonstration project under this section shall--
    (1) <> conduct periodic reviews and prepare
    root-cause quality and deficiency analyses of a chain to assess
    if facilities of the chain are in compliance with State and
    Federal laws and regulations applicable to the facilities;
    (2) conduct sustained oversight of the efforts of the chain,
    whether publicly or privately held, to achieve compliance by
    facilities of the chain with State and Federal laws and
    regulations applicable to the facilities;
    (3) analyze the management structure, distribution of
    expenditures, and nurse staffing levels of facilities of the
    chain in relation to resident census, staff turnover rates, and
    tenure;
    (4) <> report findings and recommendations
    with respect to such reviews, analyses, and oversight to the
    chain and facilities of the chain, to the Secretary, and to
    relevant States; and
    (5) <> publish the results of such
    reviews, analyses, and oversight.

    (d) Implementation of Recommendations.--
    (1) Receipt of finding by chain. <> --Not
    later than 10 days after receipt of a finding of an independent
    monitor under subsection (c)(4), <> a chain
    participating in the demonstration project shall submit to the
    independent monitor a report--
    (A) outlining corrective actions the chain will take
    to implement the recommendations in such report; or
    (B) indicating that the chain will not implement
    such recommendations, and why it will not do so.
    (2) Receipt of report by independent monitor.--Not later
    than 10 days after receipt of a report submitted by a chain
    under paragraph (1), an independent monitor shall finalize its
    recommendations and submit a report to the chain and facilities
    of the chain, the Secretary, and the State or States, as
    appropriate, containing such final recommendations.

    [[Page 718]]

    (e) Cost of Appointment.--A chain shall be responsible for a portion
    of the costs associated with the appointment of independent monitors
    under the demonstration project under this
    section. <> The chain shall pay such portion
    to the Secretary (in an amount and in accordance with procedures
    established by the Secretary).

    (f) Waiver Authority.--The Secretary may waive such requirements of
    titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et seq.;
    1396 et seq.) as may be necessary for the purpose of carrying out the
    demonstration project under this section.
    (g) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out this section.
    (h) Definitions.--In this section:
    (1) Additional disclosable party.--The term ``additional
    disclosable party'' has the meaning given such term in section
    1124(c)(5)(A) of the Social Security Act, as added by section
    4201(a).
    (2) Facility.--The term ``facility'' means a skilled nursing
    facility or a nursing facility.
    (3) Nursing facility.--The term ``nursing facility'' has the
    meaning given such term in section 1919(a) of the Social
    Security Act (42 U.S.C. 1396r(a)).
    (4) Secretary.--The term ``Secretary'' means the Secretary
    of Health and Human Services, acting through the Assistant
    Secretary for Planning and Evaluation.
    (5) Skilled nursing facility.--The term ``skilled nursing
    facility'' has the meaning given such term in section 1819(a) of
    the Social Security Act (42 U.S.C. 1395(a)).

    (i) Evaluation and Report.--
    (1) Evaluation.--The Secretary, in consultation with the
    Inspector General of the Department of Health and Human
    Services, shall evaluate the demonstration project conducted
    under this section.
    (2) Report.--Not later than 180 days after the completion of
    the demonstration project under this section, the Secretary
    shall submit to Congress a report containing the results of the
    evaluation conducted under paragraph (1), together with
    recommendations--
    (A) as to whether the independent monitor program
    should be established on a permanent basis;
    (B) if the Secretary recommends that such program be
    so established, on appropriate procedures and mechanisms
    for such establishment; and
    (C) for such legislation and administrative action
    as the Secretary determines appropriate.

    SEC. 6113. NOTIFICATION OF FACILITY CLOSURE.

    (a) In General.--Section 1128I of the Social Security Act, as added
    and amended by this Act, <> is amended by adding
    at the end the following new subsection:

    ``(h) Notification of Facility Closure.--
    ``(1) In general.--Any individual who is the administrator
    of a facility must--

    [[Page 719]]

    ``(A) <> submit to
    the Secretary, the State long-term care ombudsman,
    residents of the facility, and the legal representatives
    of such residents or other responsible parties, written
    notification of an impending closure--
    ``(i) subject to clause (ii), not later than
    the date that is 60 days prior to the date of such
    closure; and
    ``(ii) in the case of a facility where the
    Secretary terminates the facility's participation
    under this title, not later than the date that the
    Secretary determines appropriate;
    ``(B) ensure that the facility does not admit any
    new residents on or after the date on which such written
    notification is submitted; and
    ``(C) <> include in the notice a plan
    for the transfer and adequate relocation of the
    residents of the facility by a specified date prior to
    closure that has been approved by the State, including
    assurances that the residents will be transferred to the
    most appropriate facility or other setting in terms of
    quality, services, and location, taking into
    consideration the needs, choice, and best interests of
    each resident.
    ``(2) Relocation.--
    ``(A) In general.--The State shall ensure that,
    before a facility closes, all residents of the facility
    have been successfully relocated to another facility or
    an alternative home and community-based setting.
    ``(B) Continuation of payments until residents
    relocated.-- <> The Secretary may,
    as the Secretary determines appropriate, continue to
    make payments under this title with respect to residents
    of a facility that has submitted a notification under
    paragraph (1) during the period beginning on the date
    such notification is submitted and ending on the date on
    which the resident is successfully relocated.
    ``(3) Sanctions.--Any individual who is the administrator of
    a facility that fails to comply with the requirements of
    paragraph (1)--
    ``(A) shall be subject to a civil monetary penalty
    of up to $100,000;
    ``(B) may be subject to exclusion from participation
    in any Federal health care program (as defined in
    section 1128B(f)); and
    ``(C) shall be subject to any other penalties that
    may be prescribed by law.
    ``(4) Procedure.-- <> The provisions
    of section 1128A (other than subsections (a) and (b) and the
    second sentence of subsection (f)) shall apply to a civil money
    penalty or exclusion under paragraph (3) in the same manner as
    such provisions apply to a penalty or proceeding under section
    1128A(a).''.

    (b) Conforming Amendments.--Section 1819(h)(4) of the Social
    Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
    (1) in the first sentence, by striking ``the Secretary shall
    terminate'' and inserting ``the Secretary, subject to section
    1128I(h), shall terminate''; and
    (2) in the second sentence, by striking ``subsection
    (c)(2)'' and inserting ``subsection (c)(2) and section
    1128I(h)''.

    [[Page 720]]

    (c) <> Effective Date.--The amendments
    made by this section shall take effect 1 year after the date of the
    enactment of this Act.

    SEC. 6114. <> NATIONAL DEMONSTRATION
    PROJECTS ON CULTURE CHANGE AND USE OF INFORMATION TECHNOLOGY
    IN NURSING HOMES.

    (a) In General.--The Secretary shall conduct 2 demonstration
    projects, 1 for the development of best practices in skilled nursing
    facilities and nursing facilities that are involved in the culture
    change movement (including the development of resources for facilities
    to find and access funding in order to undertake culture change) and 1
    for the development of best practices in skilled nursing facilities and
    nursing facilities for the use of information technology to improve
    resident care.
    (b) Conduct of Demonstration Projects.--
    (1) Grant award.--Under each demonstration project conducted
    under this section, the Secretary shall award 1 or more grants
    to facility-based settings for the development of best practices
    described in subsection (a) with respect to the demonstration
    project involved. Such award shall be made on a competitive
    basis and may be allocated in 1 lump-sum payment.
    (2) Consideration of special needs of residents.--Each
    demonstration project conducted under this section shall take
    into consideration the special needs of residents of skilled
    nursing facilities and nursing facilities who have cognitive
    impairment, including dementia.

    (c) Duration and Implementation.--
    (1) Duration.--The demonstration projects shall each be
    conducted for a period not to exceed 3 years.
    (2) Implementation.-- <> The demonstration
    projects shall each be implemented not later than 1 year after
    the date of the enactment of this Act.

    (d) Definitions.--In this section:
    (1) Nursing facility.--The term ``nursing facility'' has the
    meaning given such term in section 1919(a) of the Social
    Security Act (42 U.S.C. 1396r(a)).
    (2) Secretary.--The term ``Secretary'' means the Secretary
    of Health and Human Services.
    (3) Skilled nursing facility.--The term ``skilled nursing
    facility'' has the meaning given such term in section 1819(a) of
    the Social Security Act (42 U.S.C. 1395(a)).

    (e) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out this section.
    (f) Report.-- <> Not later than 9 months
    after the completion of the demonstration project, the Secretary shall
    submit to Congress a report on such project, together with
    recommendations for such legislation and administrative action as the
    Secretary determines appropriate.

    PART III--IMPROVING STAFF TRAINING

    SEC. 6121. DEMENTIA AND ABUSE PREVENTION TRAINING.

    (a) Skilled Nursing Facilities.--
    (1) In general.--Section 1819(f)(2)(A)(i)(I) of the Social
    Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by

    [[Page 721]]

    inserting ``(including, in the case of initial training and, if
    the Secretary determines appropriate, in the case of ongoing
    training, dementia management training, and patient abuse
    prevention training'' before ``, (II)''.
    (2) Clarification of definition of nurse aide.--Section
    1819(b)(5)(F) of the Social Security Act (42 U.S.C. 1395i-
    3(b)(5)(F)) is amended by adding at the end the following flush
    sentence:
    ``Such term includes an individual who provides such
    services through an agency or under a contract with the
    facility.''.

    (b) Nursing Facilities.--
    (1) In general.--Section 1919(f)(2)(A)(i)(I) of the Social
    Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by
    inserting ``(including, in the case of initial training and, if
    the Secretary determines appropriate, in the case of ongoing
    training, dementia management training, and patient abuse
    prevention training'' before ``, (II)''.
    (2) Clarification of definition of nurse aide.--Section
    1919(b)(5)(F) of the Social Security Act (42 U.S.C.
    1396r(b)(5)(F)) is amended by adding at the end the following
    flush sentence:
    ``Such term includes an individual who provides such
    services through an agency or under a contract with the
    facility.''.

    (c) <> Effective Date.--The amendments
    made by this section shall take effect 1 year after the date of the
    enactment of this Act.

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

    SEC. 6201. <> NATIONWIDE PROGRAM FOR NATIONAL
    AND STATE BACKGROUND CHECKS ON DIRECT PATIENT ACCESS
    EMPLOYEES OF LONG-TERM CARE FACILITIES AND PROVIDERS.

    (a) In General.--The Secretary of Health and Human Services (in this
    section referred to as the ``Secretary''), shall establish a program to
    identify efficient, effective, and economical procedures for long term
    care facilities or providers to conduct background checks on prospective
    direct patient access employees on a nationwide basis (in this
    subsection, such program shall be referred to as the ``nationwide
    program''). Except for the following modifications, the Secretary shall
    carry out the nationwide program under similar terms and conditions as
    the pilot program under section 307 of the Medicare Prescription Drug,
    Improvement, and Modernization Act of 2003 (Public Law 108-173; 117
    Stat. 2257), including the prohibition on hiring abusive workers and the
    authorization of the imposition of penalties by a participating State
    under subsection (b)(3)(A) and (b)(6), respectively, of such section
    307:
    (1) Agreements.--

    [[Page 722]]

    (A) Newly participating states.--The Secretary shall
    enter into agreements with each State--
    (i) that the Secretary has not entered into an
    agreement with under subsection (c)(1) of such
    section 307;
    (ii) that agrees to conduct background checks
    under the nationwide program on a Statewide basis;
    and
    (iii) that submits an application to the
    Secretary containing such information and at such
    time as the Secretary may specify.
    (B) Certain previously participating states.--The
    Secretary shall enter into agreements with each State--
    (i) that the Secretary has entered into an
    agreement with under such subsection (c)(1), but
    only in the case where such agreement did not
    require the State to conduct background checks
    under the program established under subsection (a)
    of such section 307 on a Statewide basis;
    (ii) that agrees to conduct background checks
    under the nationwide program on a Statewide basis;
    and
    (iii) that submits an application to the
    Secretary containing such information and at such
    time as the Secretary may specify.
    (2) Nonapplication of selection criteria.--The selection
    criteria required under subsection (c)(3)(B) of such section 307
    shall not apply.
    (3) Required fingerprint check as part of criminal history
    background check.--The procedures established under subsection
    (b)(1) of such section 307 shall--
    (A) require that the long-term care facility or
    provider (or the designated agent of the long-term care
    facility or provider) obtain State and national criminal
    history background checks on the prospective employee
    through such means as the Secretary determines
    appropriate, efficient, and effective that utilize a
    search of State-based abuse and neglect registries and
    databases, including the abuse and neglect registries of
    another State in the case where a prospective employee
    previously resided in that State, State criminal history
    records, the records of any proceedings in the State
    that may contain disqualifying information about
    prospective employees (such as proceedings conducted by
    State professional licensing and disciplinary boards and
    State Medicaid Fraud Control Units), and Federal
    criminal history records, including a fingerprint check
    using the Integrated Automated Fingerprint
    Identification System of the Federal Bureau of
    Investigation;
    (B) require States to describe and test methods that
    reduce duplicative fingerprinting, including providing
    for the development of ``rap back'' capability by the
    State such that, if a direct patient access employee of
    a long-term care facility or provider is convicted of a
    crime following the initial criminal history background
    check conducted

    [[Page 723]]

    with respect to such employee, and the employee's
    fingerprints match the prints on file with the State law
    enforcement department, the department will immediately
    inform the State and the State will immediately inform
    the long-term care facility or provider which employs
    the direct patient access employee of such conviction;
    and
    (C) require that criminal history background checks
    conducted under the nationwide program remain valid for
    a period of time specified by the Secretary.
    (4) State requirements.--An agreement entered into under
    paragraph (1) shall require that a participating State--
    (A) be responsible for monitoring compliance with
    the requirements of the nationwide program;
    (B) <> have procedures in place
    to--
    (i) conduct screening and criminal history
    background checks under the nationwide program in
    accordance with the requirements of this section;
    (ii) monitor compliance by long-term care
    facilities and providers with the procedures and
    requirements of the nationwide program;
    (iii) as appropriate, provide for a
    provisional period of employment by a long-term
    care facility or provider of a direct patient
    access employee, not to exceed 60 days, pending
    completion of the required criminal history
    background check and, in the case where the
    employee has appealed the results of such
    background check, pending completion of the
    appeals process, during which the employee shall
    be subject to direct on-site supervision (in
    accordance with procedures established by the
    State to ensure that a long-term care facility or
    provider furnishes such direct on-site
    supervision);
    (iv) provide an independent process by which a
    provisional employee or an employee may appeal or
    dispute the accuracy of the information obtained
    in a background check performed under the
    nationwide program, including the specification of
    criteria for appeals for direct patient access
    employees found to have disqualifying information
    which shall include consideration of the passage
    of time, extenuating circumstances, demonstration
    of rehabilitation, and relevancy of the particular
    disqualifying information with respect to the
    current employment of the individual;
    (v) provide for the designation of a single
    State agency as responsible for--
    (I) overseeing the coordination of
    any State and national criminal history
    background checks requested by a long-
    term care facility or provider (or the
    designated agent of the long-term care
    facility or provider) utilizing a search
    of State and Federal criminal history
    records, including a fingerprint check
    of such records;
    (II) overseeing the design of
    appropriate privacy and security
    safeguards for use in the review of the
    results of any State or national
    criminal history background checks
    conducted regarding a

    [[Page 724]]

    prospective direct patient access
    employee to determine whether the
    employee has any conviction for a
    relevant crime;
    (III) immediately reporting to the
    long-term care facility or provider that
    requested the criminal history
    background check the results of such
    review; and
    (IV) in the case of an employee with
    a conviction for a relevant crime that
    is subject to reporting under section
    1128E of the Social Security Act (42
    U.S.C. 1320a-7e), reporting the
    existence of such conviction to the
    database established under that section;
    (vi) determine which individuals are direct
    patient access employees (as defined in paragraph
    (6)(B)) for purposes of the nationwide program;
    (vii) as appropriate, specify offenses,
    including convictions for violent crimes, for
    purposes of the nationwide program; and
    (viii) describe and test methods that reduce
    duplicative fingerprinting, including providing
    for the development of ``rap back'' capability
    such that, if a direct patient access employee of
    a long-term care facility or provider is convicted
    of a crime following the initial criminal history
    background check conducted with respect to such
    employee, and the employee's fingerprints match
    the prints on file with the State law enforcement
    department--
    (I) the department will immediately
    inform the State agency designated under
    clause (v) and such agency will
    immediately inform the facility or
    provider which employs the direct
    patient access employee of such
    conviction; and
    (II) the State will provide, or will
    require the facility to provide, to the
    employee a copy of the results of the
    criminal history background check
    conducted with respect to the employee
    at no charge in the case where the
    individual requests such a copy.
    (5) Payments.--
    (A) Newly participating states.--
    (i) In general.--As part of the application
    submitted by a State under paragraph (1)(A)(iii),
    the State shall guarantee, with respect to the
    costs to be incurred by the State in carrying out
    the nationwide program, that the State will make
    available (directly or through donations from
    public or private entities) a particular amount of
    non-Federal contributions, as a condition of
    receiving the Federal match under clause (ii).
    (ii) Federal match.--The payment amount to
    each State that the Secretary enters into an
    agreement with under paragraph (1)(A) shall be 3
    times the amount that the State guarantees to make
    available under clause (i), except that in no case
    may the payment amount exceed $3,000,000.
    (B) Previously participating states.--

    [[Page 725]]

    (i) In general.--As part of the application
    submitted by a State under paragraph (1)(B)(iii),
    the State shall guarantee, with respect to the
    costs to be incurred by the State in carrying out
    the nationwide program, that the State will make
    available (directly or through donations from
    public or private entities) a particular amount of
    non-Federal contributions, as a condition of
    receiving the Federal match under clause (ii).
    (ii) Federal match.--The payment amount to
    each State that the Secretary enters into an
    agreement with under paragraph (1)(B) shall be 3
    times the amount that the State guarantees to make
    available under clause (i), except that in no case
    may the payment amount exceed $1,500,000.
    (6) Definitions.--Under the nationwide program:
    (A) Conviction for a relevant crime.--The term
    ``conviction for a relevant crime'' means any Federal or
    State criminal conviction for--
    (i) any offense described in section 1128(a)
    of the Social Security Act (42 U.S.C. 1320a-7); or
    (ii) such other types of offenses as a
    participating State may specify for purposes of
    conducting the program in such State.
    (B) Disqualifying information.--The term
    ``disqualifying information'' means a conviction for a
    relevant crime or a finding of patient or resident
    abuse.
    (C) Finding of patient or resident abuse.--The term
    ``finding of patient or resident abuse'' means any
    substantiated finding by a State agency under section
    1819(g)(1)(C) or 1919(g)(1)(C) of the Social Security
    Act (42 U.S.C. 1395i-3(g)(1)(C), 1396r(g)(1)(C)) or a
    Federal agency that a direct patient access employee has
    committed--
    (i) an act of patient or resident abuse or
    neglect or a misappropriation of patient or
    resident property; or
    (ii) such other types of acts as a
    participating State may specify for purposes of
    conducting the program in such State.
    (D) Direct patient access employee.--The term
    ``direct patient access employee'' means any individual
    who has access to a patient or resident of a long-term
    care facility or provider through employment or through
    a contract with such facility or provider and has duties
    that involve (or may involve) one-on-one contact with a
    patient or resident of the facility or provider, as
    determined by the State for purposes of the nationwide
    program. Such term does not include a volunteer unless
    the volunteer has duties that are equivalent to the
    duties of a direct patient access employee and those
    duties involve (or may involve) one-on-one contact with
    a patient or resident of the long-term care facility or
    provider.
    (E) Long-term care facility or provider.--The term
    ``long-term care facility or provider'' means the
    following facilities or providers which receive payment
    for services under title XVIII or XIX of the Social
    Security Act:

    [[Page 726]]

    (i) A skilled nursing facility (as defined in
    section 1819(a) of the Social Security Act (42
    U.S.C. 1395i-3(a))).
    (ii) A nursing facility (as defined in section
    1919(a) of such Act (42 U.S.C. 1396r(a))).
    (iii) A home health agency.
    (iv) A provider of hospice care (as defined in
    section 1861(dd)(1) of such Act (42 U.S.C.
    1395x(dd)(1))).
    (v) A long-term care hospital (as described in
    section 1886(d)(1)(B)(iv) of such Act (42 U.S.C.
    1395ww(d)(1)(B)(iv))).
    (vi) A provider of personal care services.
    (vii) A provider of adult day care.
    (viii) A residential care provider that
    arranges for, or directly provides, long-term care
    services, including an assisted living facility
    that provides a level of care established by the
    Secretary.
    (ix) An intermediate care facility for the
    mentally retarded (as defined in section 1905(d)
    of such Act (42 U.S.C. 1396d(d))).
    (x) Any other facility or provider of long-
    term care services under such titles as the
    participating State determines appropriate.
    (7) Evaluation and report.--
    (A) Evaluation.--
    (i) In general.--The Inspector General of the
    Department of Health and Human Services shall
    conduct an evaluation of the nationwide program.
    (ii) Inclusion of specific topics.--The
    evaluation conducted under clause (i) shall
    include the following:
    (I) A review of the various
    procedures implemented by participating
    States for long-term care facilities or
    providers, including staffing agencies,
    to conduct background checks of direct
    patient access employees under the
    nationwide program and identification of
    the most appropriate, efficient, and
    effective procedures for conducting such
    background checks.
    (II) An assessment of the costs of
    conducting such background checks
    (including start up and administrative
    costs).
    (III) A determination of the extent
    to which conducting such background
    checks leads to any unintended
    consequences, including a reduction in
    the available workforce for long-term
    care facilities or providers.
    (IV) An assessment of the impact of
    the nationwide program on reducing the
    number of incidents of neglect, abuse,
    and misappropriation of resident
    property to the extent practicable.
    (V) An evaluation of other aspects
    of the nationwide program, as determined
    appropriate by the Secretary.
    (B) Report.--Not later than 180 days after the
    completion of the nationwide program, the Inspector
    General of the Department of Health and Human Services
    shall

    [[Page 727]]

    submit a report to Congress containing the results of
    the evaluation conducted under subparagraph (A).

    (b) Funding.--
    (1) Notification.--The Secretary of Health and Human
    Services shall notify the Secretary of the Treasury of the
    amount necessary to carry out the nationwide program under this
    section for the period of fiscal years 2010 through 2012, except
    that in no case shall such amount exceed $160,000,000.
    (2) Transfer of funds.--
    (A) In general.--Out of any funds in the Treasury
    not otherwise appropriated, the Secretary of the
    Treasury shall provide for the transfer to the Secretary
    of Health and Human Services of the amount specified as
    necessary to carry out the nationwide program under
    paragraph (1). Such amount shall remain available until
    expended.
    (B) Reservation of funds for conduct of
    evaluation.--The Secretary may reserve not more than
    $3,000,000 of the amount transferred under subparagraph
    (A) to provide for the conduct of the evaluation under
    subsection (a)(7)(A).

    Subtitle D--Patient-Centered Outcomes Research

    SEC. 6301. PATIENT-CENTERED OUTCOMES RESEARCH.

    (a) In General.--Title XI of the Social Security Act (42 U.S.C. 1301
    et seq.) is amended by adding at the end the following new part:

    ``Part D--Comparative Clinical Effectiveness Research

    ``comparative clinical effectiveness research

    ``Sec. 1181.  <> (a) Definitions.--In this
    section:
    ``(1) Board.--The term `Board' means the Board of Governors
    established under subsection (f).
    ``(2) Comparative clinical effectiveness research;
    research.--
    ``(A) In general.--The terms `comparative clinical
    effectiveness research' and `research' mean research
    evaluating and comparing health outcomes and the
    clinical effectiveness, risks, and benefits of 2 or more
    medical treatments, services, and items described in
    subparagraph (B).
    ``(B) Medical treatments, services, and items
    described.--The medical treatments, services, and items
    described in this subparagraph are health care
    interventions, protocols for treatment, care management,
    and delivery, procedures, medical devices, diagnostic
    tools, pharmaceuticals (including drugs and
    biologicals), integrative health practices, and any
    other strategies or items being used in the treatment,
    management, and diagnosis of, or prevention of illness
    or injury in, individuals.
    ``(3) Conflict of interest.--The term `conflict of interest'
    means an association, including a financial or personal
    association, that have the potential to bias or have the
    appearance

    [[Page 728]]

    of biasing an individual's decisions in matters related to the
    Institute or the conduct of activities under this section.
    ``(4) Real conflict of interest.--The term `real conflict of
    interest' means any instance where a member of the Board, the
    methodology committee established under subsection (d)(6), or an
    advisory panel appointed under subsection (d)(4), or a close
    relative of such member, has received or could receive either of
    the following:
    ``(A) A direct financial benefit of any amount
    deriving from the result or findings of a study
    conducted under this section.
    ``(B) A financial benefit from individuals or
    companies that own or manufacture medical treatments,
    services, or items to be studied under this section that
    in the aggregate exceeds $10,000 per year. For purposes
    of the preceding sentence, a financial benefit includes
    honoraria, fees, stock, or other financial benefit and
    the current value of the member or close relative's
    already existing stock holdings, in addition to any
    direct financial benefit deriving from the results or
    findings of a study conducted under this section.

    ``(b) Patient-Centered Outcomes Research Institute.--
    ``(1) Establishment.--There is authorized to be established
    a nonprofit corporation, to be known as the `Patient-Centered
    Outcomes Research Institute' (referred to in this section as the
    `Institute') which is neither an agency nor establishment of the
    United States Government.
    ``(2) <> Application of
    provisions.--The Institute shall be subject to the provisions of
    this section, and, to the extent consistent with this section,
    to the District of Columbia Nonprofit Corporation Act.
    ``(3) Funding of comparative clinical effectiveness
    research.--For fiscal year 2010 and each subsequent fiscal year,
    amounts in the Patient-Centered Outcomes Research Trust Fund
    (referred to in this section as the `PCORTF') under section 9511
    of the Internal Revenue Code of 1986 shall be available, without
    further appropriation, to the Institute to carry out this
    section.

    ``(c) Purpose.--The purpose of the Institute is to assist patients,
    clinicians, purchasers, and policy-makers in making informed health
    decisions by advancing the quality and relevance of evidence concerning
    the manner in which diseases, disorders, and other health conditions can
    effectively and appropriately be prevented, diagnosed, treated,
    monitored, and managed through research and evidence synthesis that
    considers variations in patient subpopulations, and the dissemination of
    research findings with respect to the relative health outcomes, clinical
    effectiveness, and appropriateness of the medical treatments, services,
    and items described in subsection (a)(2)(B).
    ``(d) Duties.--
    ``(1) Identifying research priorities and establishing
    research project agenda.--
    ``(A) Identifying research priorities.--The
    Institute shall identify national priorities for
    research, taking into account factors of disease
    incidence, prevalence, and burden in the United States
    (with emphasis on chronic conditions), gaps in evidence
    in terms of clinical outcomes, practice

    [[Page 729]]

    variations and health disparities in terms of delivery
    and outcomes of care, the potential for new evidence to
    improve patient health, well-being, and the quality of
    care, the effect on national expenditures associated
    with a health care treatment, strategy, or health
    conditions, as well as patient needs, outcomes, and
    preferences, the relevance to patients and clinicians in
    making informed health decisions, and priorities in the
    National Strategy for quality care established under
    section 399H of the Public Health Service Act that are
    consistent with this section.
    ``(B) Establishing research project agenda.--The
    Institute shall establish and update a research project
    agenda for research to address the priorities identified
    under subparagraph (A), taking into consideration the
    types of research that might address each priority and
    the relative value (determined based on the cost of
    conducting research compared to the potential usefulness
    of the information produced by research) associated with
    the different types of research, and such other factors
    as the Institute determines appropriate.
    ``(2) Carrying out research project agenda.--
    ``(A) Research.--The Institute shall carry out the
    research project agenda established under paragraph
    (1)(B) in accordance with the methodological standards
    adopted under paragraph (9) using methods, including the
    following:
    ``(i) Systematic reviews and assessments of
    existing and future research and evidence
    including original research conducted subsequent
    to the date of the enactment of this section.
    ``(ii) Primary research, such as randomized
    clinical trials, molecularly informed trials, and
    observational studies.
    ``(iii) Any other methodologies recommended by
    the methodology committee established under
    paragraph (6) that are adopted by the Board under
    paragraph (9).
    ``(B) Contracts for the management of funding and
    conduct of research.--
    ``(i) Contracts.--
    ``(I) In general.--In accordance
    with the research project agenda
    established under paragraph (1)(B), the
    Institute shall enter into contracts for
    the management of funding and conduct of
    research in accordance with the
    following:
    ``(aa) Appropriate agencies
    and instrumentalities of the
    Federal Government.
    ``(bb) Appropriate academic
    research, private sector
    research, or study-conducting
    entities.
    ``(II) Preference.--In entering into
    contracts under subclause (I), the
    Institute shall give preference to the
    Agency for Healthcare Research and
    Quality and the National Institutes of
    Health, but only if the research to be
    conducted or managed under such contract
    is authorized by the governing statutes
    of such Agency or Institutes.

    [[Page 730]]

    ``(ii) Conditions for contracts.--A contract
    entered into under this subparagraph shall require
    that the agency, instrumentality, or other
    entity--
    ``(I) abide by the transparency and
    conflicts of interest requirements under
    subsection (h) that apply to the
    Institute with respect to the research
    managed or conducted under such
    contract;
    ``(II) comply with the
    methodological standards adopted under
    paragraph (9) with respect to such
    research;
    ``(III) consult with the expert
    advisory panels for clinical trials and
    rare disease appointed under clauses
    (ii) and (iii), respectively, of
    paragraph (4)(A);
    ``(IV) subject to clause (iv),
    permit a researcher who conducts
    original research under the contract for
    the agency, instrumentality, or other
    entity to have such research published
    in a peer-reviewed journal or other
    publication;
    ``(V) have appropriate processes in
    place to manage data privacy and meet
    ethical standards for the research;
    ``(VI) comply with the requirements
    of the Institute for making the
    information available to the public
    under paragraph (8); and
    ``(VII) comply with other terms and
    conditions determined necessary by the
    Institute to carry out the research
    agenda adopted under paragraph (2).
    ``(iii) Coverage of copayments or
    coinsurance.--A contract entered into under this
    subparagraph may allow for the coverage of
    copayments or coinsurance, or allow for other
    appropriate measures, to the extent that such
    coverage or other measures are necessary to
    preserve the validity of a research project, such
    as in the case where the research project must be
    blinded.
    ``(iv) Requirements for publication of
    research.--Any research published under clause
    (ii)(IV) shall be within the bounds of and
    entirely consistent with the evidence and findings
    produced under the contract with the Institute
    under this subparagraph. If the Institute
    determines that those requirements are not met,
    the Institute shall not enter into another
    contract with the agency, instrumentality, or
    entity which managed or conducted such research
    for a period determined appropriate by the
    Institute (but not less than 5 years).
    ``(C) Review and update of evidence.--The Institute
    shall review and update evidence on a periodic basis as
    appropriate.
    ``(D) Taking into account potential differences.--
    Research shall be designed, as appropriate, to take into
    account the potential for differences in the
    effectiveness of health care treatments, services, and
    items as used with various subpopulations, such as
    racial and ethnic minorities, women, age, and groups of
    individuals with different comorbidities, genetic and
    molecular sub-types,

    [[Page 731]]

    or quality of life preferences and include members of
    such subpopulations as subjects in the research as
    feasible and appropriate.
    ``(E) Differences in treatment modalities.--Research
    shall be designed, as appropriate, to take into account
    different characteristics of treatment modalities that
    may affect research outcomes, such as the phase of the
    treatment modality in the innovation cycle and the
    impact of the skill of the operator of the treatment
    modality.
    ``(3) Data collection.--
    ``(A) In general.--The Secretary shall, with
    appropriate safeguards for privacy, make available to
    the Institute such data collected by the Centers for
    Medicare & Medicaid Services under the programs under
    titles XVIII, XIX, and XXI, as well as provide access to
    the data networks developed under section 937(f) of the
    Public Health Service Act, as the Institute and its
    contractors may require to carry out this section. The
    Institute may also request and obtain data from Federal,
    State, or private entities, including data from clinical
    databases and registries.
    ``(B) Use of data.--The Institute shall only use
    data provided to the Institute under subparagraph (A) in
    accordance with laws and regulations governing the
    release and use of such data, including applicable
    confidentiality and privacy standards.
    ``(4) Appointing expert advisory panels.--
    ``(A) Appointment.--
    ``(i) In general.--The Institute may appoint
    permanent or ad hoc expert advisory panels as
    determined appropriate to assist in identifying
    research priorities and establishing the research
    project agenda under paragraph (1) and for other
    purposes.
    ``(ii) Expert advisory panels for clinical
    trials.--The Institute shall appoint expert
    advisory panels in carrying out randomized
    clinical trials under the research project agenda
    under paragraph (2)(A)(ii). Such expert advisory
    panels shall advise the Institute and the agency,
    instrumentality, or entity conducting the research
    on the research question involved and the research
    design or protocol, including important patient
    subgroups and other parameters of the research.
    Such panels shall be available as a resource for
    technical questions that may arise during the
    conduct of such research.
    ``(iii) Expert advisory panel for rare
    disease.--In the case of a research study for rare
    disease, the Institute shall appoint an expert
    advisory panel for purposes of assisting in the
    design of the research study and determining the
    relative value and feasibility of conducting the
    research study.
    ``(B) Composition.--An expert advisory panel
    appointed under subparagraph (A) shall include
    representatives of practicing and research clinicians,
    patients, and experts in scientific and health services
    research, health services delivery, and evidence-based
    medicine who have experience in the relevant topic, and
    as appropriate, experts

    [[Page 732]]

    in integrative health and primary prevention strategies.
    The Institute may include a technical expert of each
    manufacturer or each medical technology that is included
    under the relevant topic, project, or category for which
    the panel is established.
    ``(5) Supporting patient and consumer representatives.--The
    Institute shall provide support and resources to help patient
    and consumer representatives effectively participate on the
    Board and expert advisory panels appointed by the Institute
    under paragraph (4).
    ``(6) Establishing methodology committee.--
    ``(A) In general.--The Institute shall establish a
    standing methodology committee to carry out the
    functions described in subparagraph (C).
    ``(B) Appointment and composition.--The methodology
    committee established under subparagraph (A) shall be
    composed of not more than 15 members appointed by the
    Comptroller General of the United States. Members
    appointed to the methodology committee shall be experts
    in their scientific field, such as health services
    research, clinical research, comparative clinical
    effectiveness research, biostatistics, genomics, and
    research methodologies. Stakeholders with such expertise
    may be appointed to the methodology committee. In
    addition to the members appointed under the first
    sentence, the Directors of the National Institutes of
    Health and the Agency for Healthcare Research and
    Quality (or their designees) shall each be included as
    members of the methodology committee.
    ``(C) Functions.-- <> Subject to
    subparagraph (D), the methodology committee shall work
    to develop and improve the science and methods of
    comparative clinical effectiveness research by, not
    later than 18 months after the establishment of the
    Institute, directly or through subcontract, developing
    and periodically updating the following:
    ``(i) Methodological standards for research.
    Such methodological standards shall provide
    specific criteria for internal validity,
    generalizability, feasibility, and timeliness of
    research and for health outcomes measures, risk
    adjustment, and other relevant aspects of research
    and assessment with respect to the design of
    research. Any methodological standards developed
    and updated under this subclause shall be
    scientifically based and include methods by which
    new information, data, or advances in technology
    are considered and incorporated into ongoing
    research projects by the Institute, as
    appropriate. The process for developing and
    updating such standards shall include input from
    relevant experts, stakeholders, and
    decisionmakers, and shall provide opportunities
    for public comment. Such standards shall also
    include methods by which patient subpopulations
    can be accounted for and evaluated in different
    types of research. As appropriate, such standards
    shall build on existing work on methodological
    standards for defined categories of health
    interventions and for each of the major categories
    of

    [[Page 733]]

    comparative clinical effectiveness research
    methods (determined as of the date of enactment of
    the Patient Protection and Affordable Care Act).
    ``(ii) A translation table that is designed to
    provide guidance and act as a reference for the
    Board to determine research methods that are most
    likely to address each specific research question.
    ``(D) Consultation and conduct of examinations.--The
    methodology committee may consult and contract with the
    Institute of Medicine of the National Academies and
    academic, nonprofit, or other private and governmental
    entities with relevant expertise to carry out activities
    described in subparagraph (C) and may consult with
    relevant stakeholders to carry out such activities.
    ``(E) Reports.--The methodology committee shall
    submit reports to the Board on the committee's
    performance of the functions described in subparagraph
    (C). <> Reports shall contain
    recommendations for the Institute to adopt
    methodological standards developed and updated by the
    methodology committee as well as other actions deemed
    necessary to comply with such methodological standards.
    ``(7) Providing for a peer-review process for primary
    research.--
    ``(A) In general.--The Institute shall ensure that
    there is a process for peer review of primary research
    described in subparagraph (A)(ii) of paragraph (2) that
    is conducted under such paragraph. Under such process--
    ``(i) evidence from such primary research
    shall be reviewed to assess scientific integrity
    and adherence to methodological standards adopted
    under paragraph (9); and
    ``(ii) <> a
    list of the names of individuals contributing to
    any peer-review process during the preceding year
    or years shall be made public and included in
    annual reports in accordance with paragraph
    (10)(D).
    ``(B) Composition.--Such peer-review process shall
    be designed in a manner so as to avoid bias and
    conflicts of interest on the part of the reviewers and
    shall be composed of experts in the scientific field
    relevant to the research under review.
    ``(C) Use of existing processes.--
    ``(i) Processes of another entity.--In the
    case where the Institute enters into a contract or
    other agreement with another entity for the
    conduct or management of research under this
    section, the Institute may utilize the peer-review
    process of such entity if such process meets the
    requirements under subparagraphs (A) and (B).
    ``(ii) Processes of appropriate medical
    journals.--The Institute may utilize the peer-
    review process of appropriate medical journals if
    such process meets the requirements under
    subparagraphs (A) and (B).
    ``(8) Release of research findings.--
    ``(A) In general.-- <> The
    Institute shall, not later than 90 days after the
    conduct or receipt of research findings under this part,
    make such research findings available

    [[Page 734]]

    to clinicians, patients, and the general public. The
    Institute shall ensure that the research findings--
    ``(i) convey the findings of research in a
    manner that is comprehensible and useful to
    patients and providers in making health care
    decisions;
    ``(ii) fully convey findings and discuss
    considerations specific to certain subpopulations,
    risk factors, and comorbidities, as appropriate;
    ``(iii) include limitations of the research
    and what further research may be needed as
    appropriate;
    ``(iv) not be construed as mandates for
    practice guidelines, coverage recommendations,
    payment, or policy recommendations; and
    ``(v) not include any data which would violate
    the privacy of research participants or any
    confidentiality agreements made with respect to
    the use of data under this section.
    ``(B) Definition of research findings.--In this
    paragraph, the term `research findings' means the
    results of a study or assessment.
    ``(9) Adoption.--Subject to subsection (h)(1), the Institute
    shall adopt the national priorities identified under paragraph
    (1)(A), the research project agenda established under paragraph
    (1)(B), the methodological standards developed and updated by
    the methodology committee under paragraph (6)(C)(i), and any
    peer-review process provided under paragraph (7) by majority
    vote. In the case where the Institute does not adopt such
    processes in accordance with the preceding sentence, the
    processes shall be referred to the appropriate staff or entity
    within the Institute (or, in the case of the methodological
    standards, the methodology committee) for further review.
    ``(10) <> Annual reports.--The
    Institute shall submit an annual report to Congress and the
    President, and shall make the annual report available to the
    public. Such report shall contain--
    ``(A) a description of the activities conducted
    under this section, research priorities identified under
    paragraph (1)(A) and methodological standards developed
    and updated by the methodology committee under paragraph
    (6)(C)(i) that are adopted under paragraph (9) during
    the preceding year;
    ``(B) the research project agenda and budget of the
    Institute for the following year;
    ``(C) any administrative activities conducted by the
    Institute during the preceding year;
    ``(D) the names of individuals contributing to any
    peer-review process under paragraph (7), without
    identifying them with a particular research project; and
    ``(E) any other relevant information (including
    information on the membership of the Board, expert
    advisory panels, methodology committee, and the
    executive staff of the Institute, any conflicts of
    interest with respect to these individuals, and any
    bylaws adopted by the Board during the preceding year).

    ``(e) Administration.--
    ``(1) In general.--Subject to paragraph (2), the Board shall
    carry out the duties of the Institute.

    [[Page 735]]

    ``(2) Nondelegable duties.--The activities described in
    subsections (d)(1) and (d)(9) are nondelegable.

    ``(f) Board of Governors.--
    ``(1) <> In general.--The Institute
    shall have a Board of Governors, which shall consist of the
    following members:
    ``(A) The Director of Agency for Healthcare Research
    and Quality (or the Director's designee).
    ``(B) The Director of the National Institutes of
    Health (or the Director's designee).
    ``(C) <> Seventeen members
    appointed, not later than 6 months after the date of
    enactment of this section, by the Comptroller General of
    the United States as follows:
    ``(i) 3 members representing patients and
    health care consumers.
    ``(ii) 5 members representing physicians and
    providers, including at least 1 surgeon, nurse,
    State-licensed integrative health care
    practitioner, and representative of a hospital.
    ``(iii) 3 members representing private payers,
    of whom at least 1 member shall represent health
    insurance issuers and at least 1 member shall
    represent employers who self-insure employee
    benefits.
    ``(iv) 3 members representing pharmaceutical,
    device, and diagnostic manufacturers or
    developers.
    ``(v) 1 member representing quality
    improvement or independent health service
    researchers.
    ``(vi) 2 members representing the Federal
    Government or the States, including at least 1
    member representing a Federal health program or
    agency.
    ``(2) Qualifications.--The Board shall represent a broad
    range of perspectives and collectively have scientific expertise
    in clinical health sciences research, including epidemiology,
    decisions sciences, health economics, and statistics. In
    appointing the Board, the Comptroller General of the United
    States shall consider and disclose any conflicts of interest in
    accordance with subsection (h)(4)(B). Members of the Board shall
    be recused from relevant Institute activities in the case where
    the member (or an immediate family member of such member) has a
    real conflict of interest directly related to the research
    project or the matter that could affect or be affected by such
    participation.
    ``(3) Terms; vacancies.--A member of the Board shall be
    appointed for a term of 6 years, except with respect to the
    members first appointed, whose terms of appointment shall be
    staggered evenly over 2-year increments. No individual shall be
    appointed to the Board for more than 2 terms. Vacancies shall be
    filled in the same manner as the original appointment was made.
    ``(4) Chairperson and vice-chairperson.--
    <> The Comptroller General of the United
    States shall designate a Chairperson and Vice Chairperson of the
    Board from among the members of the Board. Such members shall
    serve as Chairperson or Vice Chairperson for a period of 3
    years.
    ``(5) Compensation.--Each member of the Board who is not an
    officer or employee of the Federal Government shall be entitled
    to compensation (equivalent to the rate provided for level IV of
    the Executive Schedule under section 5315 of

    [[Page 736]]

    title 5, United States Code) and expenses incurred while
    performing the duties of the Board. An officer or employee of
    the Federal government who is a member of the Board shall be
    exempt from compensation.
    ``(6) Director and staff; experts and consultants.--The
    Board may employ and fix the compensation of an Executive
    Director and such other personnel as may be necessary to carry
    out the duties of the Institute and may seek such assistance and
    support of, or contract with, experts and consultants that may
    be necessary for the performance of the duties of the Institute.
    ``(7) Meetings and hearings.--The Board shall meet and hold
    hearings at the call of the Chairperson or a majority of its
    members. Meetings not solely concerning matters of personnel
    shall be advertised at least 7 days in advance and open to the
    public. A majority of the Board members shall constitute a
    quorum, but a lesser number of members may meet and hold
    hearings.

    ``(g) Financial and Governmental Oversight.--
    ``(1) Contract for audit.--The Institute shall provide for
    the conduct of financial audits of the Institute on an annual
    basis by a private entity with expertise in conducting financial
    audits.
    ``(2) Review and annual reports.--
    ``(A) Review.--The Comptroller General of the United
    States shall review the following:
    ``(i) Not less frequently than on an annual
    basis, the financial audits conducted under
    paragraph (1).
    ``(ii) Not less frequently than every 5 years,
    the processes established by the Institute,
    including the research priorities and the conduct
    of research projects, in order to determine
    whether information produced by such research
    projects is objective and credible, is produced in
    a manner consistent with the requirements under
    this section, and is developed through a
    transparent process.
    ``(iii) Not less frequently than every 5
    years, the dissemination and training activities
    and data networks established under section 937 of
    the Public Health Service Act, including the
    methods and products used to disseminate research,
    the types of training conducted and supported, and
    the types and functions of the data networks
    established, in order to determine whether the
    activities and data are produced in a manner
    consistent with the requirements under such
    section.
    ``(iv) Not less frequently than every 5 years,
    the overall effectiveness of activities conducted
    under this section and the dissemination,
    training, and capacity building activities
    conducted under section 937 of the Public Health
    Service Act. Such review shall include an analysis
    of the extent to which research findings are used
    by health care decision-makers, the effect of the
    dissemination of such findings on reducing
    practice variation and disparities in health care,
    and the effect of the research conducted and
    disseminated on

    [[Page 737]]

    innovation and the health care economy of the
    United States.
    ``(v) Not later than 8 years after the date of
    enactment of this section, the adequacy and use of
    the funding for the Institute and the activities
    conducted under section 937 of the Public Health
    Service Act, including a determination as to
    whether, based on the utilization of research
    findings by public and private payers, funding
    sources for the Patient-Centered Outcomes Research
    Trust Fund under section 9511 of the Internal
    Revenue Code of 1986 are appropriate and whether
    such sources of funding should be continued or
    adjusted.
    ``(B) Annual reports.-- <> Not later than April 1 of each year, the
    Comptroller General of the United States shall submit to
    Congress a report containing the results of the review
    conducted under subparagraph (A) with respect to the
    preceding year (or years, if applicable), together with
    recommendations for such legislation and administrative
    action as the Comptroller General determines
    appropriate.

    ``(h) Ensuring Transparency, Credibility, and Access.--
    <> The Institute shall establish procedures to ensure
    that the following requirements for ensuring transparency, credibility,
    and access are met:
    ``(1) Public comment periods.--The Institute shall provide
    for a public comment period of not less than 45 days and not
    more than 60 days prior to the adoption under subsection (d)(9)
    of the national priorities identified under subsection
    (d)(1)(A), the research project agenda established under
    subsection (d)(1)(B), the methodological standards developed and
    updated by the methodology committee under subsection
    (d)(6)(C)(i), and the peer-review process provided under
    paragraph (7), and after the release of draft findings with
    respect to systematic reviews of existing research and evidence.
    ``(2) Additional forums.--The Institute shall support forums
    to increase public awareness and obtain and incorporate public
    input and feedback through media (such as an Internet website)
    on research priorities, research findings, and other duties,
    activities, or processes the Institute determines appropriate.
    ``(3) Public availability.-- <> The
    Institute shall make available to the public and disclose
    through the official public Internet website of the Institute
    the following:
    ``(A) Information contained in research findings as
    specified in subsection (d)(9).
    ``(B) The process and methods for the conduct of
    research, including the identity of the entity and the
    investigators conducing such research and any conflicts
    of interests of such parties, any direct or indirect
    links the entity has to industry, and research
    protocols, including measures taken, methods of research
    and analysis, research results, and such other
    information the Institute determines appropriate)
    concurrent with the release of research findings.
    ``(C) <> Notice of public comment
    periods under paragraph (1), including deadlines for
    public comments.

    [[Page 738]]

    ``(D) Subsequent comments received during each of
    the public comment periods.
    ``(E) In accordance with applicable laws and
    processes and as the Institute determines appropriate,
    proceedings of the Institute.
    ``(4) Disclosure of conflicts of interest.--
    ``(A) In general.--A conflict of interest shall be
    disclosed in the following manner:
    ``(i) By the Institute in appointing members
    to an expert advisory panel under subsection
    (d)(4), in selecting individuals to contribute to
    any peer-review process under subsection (d)(7),
    and for employment as executive staff of the
    Institute.
    ``(ii) By the Comptroller General in
    appointing members of the methodology committee
    under subsection (d)(6);
    ``(iii) By the Institute in the annual report
    under subsection (d)(10), except that, in the case
    of individuals contributing to any such peer
    review process, such description shall be in a
    manner such that those individuals cannot be
    identified with a particular research project.
    ``(B) Manner of disclosure.-- <> Conflicts of interest shall be disclosed as
    described in subparagraph (A) as soon as practicable on
    the Internet web site of the Institute and of the
    Government Accountability Office. The information
    disclosed under the preceding sentence shall include the
    type, nature, and magnitude of the interests of the
    individual involved, except to the extent that the
    individual recuses himself or herself from participating
    in the consideration of or any other activity with
    respect to the study as to which the potential conflict
    exists.

    ``(i) Rules.--The Institute, its Board or staff, shall be prohibited
    from accepting gifts, bequeaths, or donations of services or property.
    In addition, the Institute shall be prohibited from establishing a
    corporation or generating revenues from activities other than as
    provided under this section.
    ``(j) Rules of Construction.--
    ``(1) Coverage.--Nothing in this section shall be
    construed--
    ``(A) to permit the Institute to mandate coverage,
    reimbursement, or other policies for any public or
    private payer; or
    ``(B) as preventing the Secretary from covering the
    routine costs of clinical care received by an individual
    entitled to, or enrolled for, benefits under title
    XVIII, XIX, or XXI in the case where such individual is
    participating in a clinical trial and such costs would
    otherwise be covered under such title with respect to
    the beneficiary.''.

    (b) Dissemination and Building Capacity for Research.--Title IX of
    the Public Health Service Act (42 U.S.C. 299 et seq.), as amended by
    section 3606, is further amended by inserting after section 936 the
    following:

    ``SEC. 937. <> DISSEMINATION AND BUILDING
    CAPACITY FOR RESEARCH.

    ``(a) In General.--

    [[Page 739]]

    ``(1) Dissemination.--The Office of Communication and
    Knowledge Transfer (referred to in this section as the `Office')
    at the Agency for Healthcare Research and Quality (or any other
    relevant office designated by Agency for Healthcare Research and
    Quality), in consultation with the National Institutes of
    Health, shall broadly disseminate the research findings that are
    published by the Patient Centered Outcomes Research Institute
    established under section 1181(b) of the Social Security Act
    (referred to in this section as the `Institute') and other
    government-funded research relevant to comparative clinical
    effectiveness research. The Office shall create informational
    tools that organize and disseminate research findings for
    physicians, health care providers, patients, payers, and policy
    makers. <> The Office shall also
    develop a publicly available resource database that collects and
    contains government-funded evidence and research from public,
    private, not-for profit, and academic sources.
    ``(2) Requirements.--The Office shall provide for the
    dissemination of the Institute's research findings and
    government-funded research relevant to comparative clinical
    effectiveness research to physicians, health care providers,
    patients, vendors of health information technology focused on
    clinical decision support, appropriate professional
    associations, and Federal and private health plans. Materials,
    forums, and media used to disseminate the findings,
    informational tools, and resource databases shall--
    ``(A) include a description of considerations for
    specific subpopulations, the research methodology, and
    the limitations of the research, and the names of the
    entities, agencies, instrumentalities, and individuals
    who conducted any research which was published by the
    Institute; and
    ``(B) not be construed as mandates, guidelines, or
    recommendations for payment, coverage, or treatment.

    ``(b) Incorporation of Research Findings.--The Office, in
    consultation with relevant medical and clinical associations, shall
    assist users of health information technology focused on clinical
    decision support to promote the timely incorporation of research
    findings disseminated under subsection (a) into clinical practices and
    to promote the ease of use of such incorporation.
    ``(c) Feedback.--The Office shall establish a process to receive
    feedback from physicians, health care providers, patients, and vendors
    of health information technology focused on clinical decision support,
    appropriate professional associations, and Federal and private health
    plans about the value of the information disseminated and the assistance
    provided under this section.
    ``(d) Rule of Construction.--Nothing in this section shall preclude
    the Institute from making its research findings publicly available as
    required under section 1181(d)(8) of the Social Security Act.
    ``(e) Training of Researchers.--The Agency for Health Care Research
    and Quality, in consultation with the National Institutes of Health,
    shall build capacity for comparative clinical effectiveness research by
    establishing a grant program that provides for the training of
    researchers in the methods used to conduct such research, including
    systematic reviews of existing research and primary research such as
    clinical trials. At a minimum, such

    [[Page 740]]

    training shall be in methods that meet the methodological standards
    adopted under section 1181(d)(9) of the Social Security Act.
    ``(f) Building Data for Research.--The Secretary shall provide for
    the coordination of relevant Federal health programs to build data
    capacity for comparative clinical effectiveness research, including the
    development and use of clinical registries and health outcomes research
    data networks, in order to develop and maintain a comprehensive,
    interoperable data network to collect, link, and analyze data on
    outcomes and effectiveness from multiple sources, including electronic
    health records.
    ``(g) Authority To Contract With the Institute.--Agencies and
    instrumentalities of the Federal Government may enter into agreements
    with the Institute, and accept and retain funds, for the conduct and
    support of research described in this part, provided that the research
    to be conducted or supported under such agreements is authorized under
    the governing statutes of such agencies and instrumentalities.''.
    (c) In General.--Part D of title XI of the Social Security Act, as
    added by subsection (a), is amended by adding at the end the following
    new section:

    ``limitations on certain uses of comparative clinical effectiveness
    research

    ``Sec. 1182.  <> (a) The Secretary may only
    use evidence and findings from research conducted under section 1181 to
    make a determination regarding coverage under title XVIII if such use is
    through an iterative and transparent process which includes public
    comment and considers the effect on subpopulations.

    ``(b) Nothing in section 1181 shall be construed as--
    ``(1) superceding or modifying the coverage of items or
    services under title XVIII that the Secretary determines are
    reasonable and necessary under section 1862(l)(1); or
    ``(2) authorizing the Secretary to deny coverage of items or
    services under such title solely on the basis of comparative
    clinical effectiveness research.

    ``(c)(1) The Secretary shall not use evidence or findings from
    comparative clinical effectiveness research conducted under section 1181
    in determining coverage, reimbursement, or incentive programs under
    title XVIII in a manner that treats extending the life of an elderly,
    disabled, or terminally ill individual as of lower value than extending
    the life of an individual who is younger, nondisabled, or not terminally
    ill.
    ``(2) Paragraph (1) shall not be construed as preventing the
    Secretary from using evidence or findings from such comparative clinical
    effectiveness research in determining coverage, reimbursement, or
    incentive programs under title XVIII based upon a comparison of the
    difference in the effectiveness of alternative treatments in extending
    an individual's life due to the individual's age, disability, or
    terminal illness.
    ``(d)(1) The Secretary shall not use evidence or findings from
    comparative clinical effectiveness research conducted under section 1181
    in determining coverage, reimbursement, or incentive programs under
    title XVIII in a manner that precludes, or with the intent to
    discourage, an individual from choosing a health care treatment based on
    how the individual values the tradeoff between extending the length of
    their life and the risk of disability.
    ``(2)(A) Paragraph (1) shall not be construed to--

    [[Page 741]]

    ``(i) limit the application of differential copayments under
    title XVIII based on factors such as cost or type of service; or
    ``(ii) prevent the Secretary from using evidence or findings
    from such comparative clinical effectiveness research in
    determining coverage, reimbursement, or incentive programs under
    such title based upon a comparison of the difference in the
    effectiveness of alternative health care treatments in extending
    an individual's life due to that individual's age, disability,
    or terminal illness.

    ``(3) Nothing in the provisions of, or amendments made by the
    Patient Protection and Affordable Care Act, shall be construed to limit
    comparative clinical effectiveness research or any other research,
    evaluation, or dissemination of information concerning the likelihood
    that a health care treatment will result in disability.
    ``(e) The Patient-Centered Outcomes Research Institute established
    under section 1181(b)(1) shall not develop or employ a dollars-per-
    quality adjusted life year (or similar measure that discounts the value
    of a life because of an individual's disability) as a threshold to
    establish what type of health care is cost effective or recommended. The
    Secretary shall not utilize such an adjusted life year (or such a
    similar measure) as a threshold to determine coverage, reimbursement, or
    incentive programs under title XVIII.''.
    (d) In General.--Part D of title XI of the Social Security Act, as
    added by subsection (a) and amended by subsection (c), is amended by
    adding at the end the following new section:

    ``trust fund transfers to patient-centered outcomes research trust fund

    ``Sec. 1183.  <> (a) In General.--The
    Secretary shall provide for the transfer, from the Federal Hospital
    Insurance Trust Fund under section 1817 and the Federal Supplementary
    Medical Insurance Trust Fund under section 1841, in proportion (as
    estimated by the Secretary) to the total expenditures during such fiscal
    year that are made under title XVIII from the respective trust fund, to
    the Patient-Centered Outcomes Research Trust Fund (referred to in this
    section as the `PCORTF') under section 9511 of the Internal Revenue Code
    of 1986, of the following:
    ``(1) For fiscal year 2013, an amount equal to $1 multiplied
    by the average number of individuals entitled to benefits under
    part A, or enrolled under part B, of title XVIII during such
    fiscal year.
    ``(2) For each of fiscal years 2014, 2015, 2016, 2017, 2018,
    and 2019, an amount equal to $2 multiplied by the average number
    of individuals entitled to benefits under part A, or enrolled
    under part B, of title XVIII during such fiscal year.

    ``(b) Adjustments for Increases in Health Care Spending.--In the
    case of any fiscal year beginning after September 30, 2014, the dollar
    amount in effect under subsection (a)(2) for such fiscal year shall be
    equal to the sum of such dollar amount for the previous fiscal year
    (determined after the application of this subsection), plus an amount
    equal to the product of--
    ``(1) such dollar amount for the previous fiscal year,
    multiplied by
    ``(2) the percentage increase in the projected per capita
    amount of National Health Expenditures, as most recently
    published by the Secretary before the beginning of the fiscal
    year.''.

    [[Page 742]]

    (e) Patient-Centered Outcomes Research Trust Fund; Financing for
    Trust Fund.--
    (1) Establishment of trust fund.--
    (A) In general.--Subchapter A of chapter 98 of the
    Internal Revenue Code of 1986 (relating to establishment
    of trust funds) is amended by adding at the end the
    following new section:

    ``SEC. 9511. <> PATIENT-CENTERED OUTCOMES RESEARCH
    TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury
    of the United States a trust fund to be known as the `Patient-Centered
    Outcomes Research Trust Fund' (hereafter in this section referred to as
    the `PCORTF'), consisting of such amounts as may be appropriated or
    credited to such Trust Fund as provided in this section and section
    9602(b).
    ``(b) Transfers to Fund.--
    ``(1) Appropriation.--There are hereby appropriated to the
    Trust Fund the following:
    ``(A) For fiscal year 2010, $10,000,000.
    ``(B) For fiscal year 2011, $50,000,000.
    ``(C) For fiscal year 2012, $150,000,000.
    ``(D) For fiscal year 2013--
    ``(i) an amount equivalent to the net revenues
    received in the Treasury from the fees imposed
    under subchapter B of chapter 34 (relating to fees
    on health insurance and self-insured plans) for
    such fiscal year; and
    ``(ii) $150,000,000.
    ``(E) For each of fiscal years 2014, 2015, 2016,
    2017, 2018, and 2019--
    ``(i) an amount equivalent to the net revenues
    received in the Treasury from the fees imposed
    under subchapter B of chapter 34 (relating to fees
    on health insurance and self-insured plans) for
    such fiscal year; and
    ``(ii) $150,000,000.
    The amounts appropriated under subparagraphs (A), (B),
    (C), (D)(ii), and (E)(ii) shall be transferred from the
    general fund of the Treasury, from funds not otherwise
    appropriated.
    ``(2) Trust fund transfers.--In addition to the amounts
    appropriated under paragraph (1), there shall be credited to the
    PCORTF the amounts transferred under section 1183 of the Social
    Security Act.
    ``(3) Limitation on transfers to pcortf.--No amount may be
    appropriated or transferred to the PCORTF on and after the date
    of any expenditure from the PCORTF which is not an expenditure
    permitted under this section. The determination of whether an
    expenditure is so permitted shall be made without regard to--
    ``(A) any provision of law which is not contained or
    referenced in this chapter or in a revenue Act, and
    ``(B) whether such provision of law is a
    subsequently enacted provision or directly or indirectly
    seeks to waive the application of this paragraph.

    ``(c) Trustee.--The Secretary of the Treasury shall be a trustee of
    the PCORTF.

    [[Page 743]]

    ``(d) Expenditures From Fund.--
    ``(1) Amounts available to the patient-centered outcomes
    research institute.--Subject to paragraph (2), amounts in the
    PCORTF are available, without further appropriation, to the
    Patient-Centered Outcomes Research Institute established under
    section 1181(b) of the Social Security Act for carrying out part
    D of title XI of the Social Security Act (as in effect on the
    date of enactment of such Act).
    ``(2) Transfer of funds.--
    ``(A) In general.--The trustee of the PCORTF shall
    provide for the transfer from the PCORTF of 20 percent
    of the amounts appropriated or credited to the PCORTF
    for each of fiscal years 2011 through 2019 to the
    Secretary of Health and Human Services to carry out
    section 937 of the Public Health Service Act.
    ``(B) Availability.--Amounts transferred under
    subparagraph (A) shall remain available until expended.
    ``(C) Requirements.--Of the amounts transferred
    under subparagraph (A) with respect to a fiscal year,
    the Secretary of Health and Human Services shall
    distribute--
    ``(i) 80 percent to the Office of
    Communication and Knowledge Transfer of the Agency
    for Healthcare Research and Quality (or any other
    relevant office designated by Agency for
    Healthcare Research and Quality) to carry out the
    activities described in section 937 of the Public
    Health Service Act; and
    ``(ii) 20 percent to the Secretary to carry
    out the activities described in such section 937.

    ``(e) Net Revenues.-- <> For purposes of this
    section, the term `net revenues' means the amount estimated by the
    Secretary of the Treasury based on the excess of--
    ``(1) the fees received in the Treasury under subchapter B
    of chapter 34, over
    ``(2) the decrease in the tax imposed by chapter 1 resulting
    from the fees imposed by such subchapter.

    ``(f) Termination.--No amounts shall be available for expenditure
    from the PCORTF after September 30, 2019, and any amounts in such Trust
    Fund after such date shall be transferred to the general fund of the
    Treasury.''.
    (B) Clerical amendment.--The table of sections for
    subchapter A of chapter 98 of such Code is amended by
    adding at the end the following new item:

    ``Sec. 9511. Patient-centered outcomes research trust fund.''.

    (2) Financing for fund from fees on insured and self-insured
    health plans.--
    (A) General rule.--Chapter 34 of the Internal
    Revenue Code of 1986 is amended by adding at the end the
    following new subchapter:

    ``Subchapter B--Insured and Self-Insured Health Plans

    ``Sec. 4375. Health insurance.
    ``Sec. 4376. Self-insured health plans.
    ``Sec. 4377. Definitions and special rules.

    ``SEC. 4375. <> HEALTH INSURANCE.

    ``(a) Imposition of Fee.--There is hereby imposed on each specified
    health insurance policy for each policy year ending after

    [[Page 744]]

    September 30, 2012, a fee equal to the product of $2 ($1 in the case of
    policy years ending during fiscal year 2013) multiplied by the average
    number of lives covered under the policy.
    ``(b) Liability for Fee.--The fee imposed by subsection (a) shall be
    paid by the issuer of the policy.
    ``(c) Specified Health Insurance Policy.--For purposes of this
    section:
    ``(1) In general.-- <> Except as
    otherwise provided in this section, the term `specified health
    insurance policy' means any accident or health insurance policy
    (including a policy under a group health plan) issued with
    respect to individuals residing in the United States.
    ``(2) Exemption for certain policies.--The term `specified
    health insurance policy' does not include any insurance if
    substantially all of its coverage is of excepted benefits
    described in section 9832(c).
    ``(3) Treatment of prepaid health coverage arrangements.--
    ``(A) In general.--In the case of any arrangement
    described in subparagraph (B), such arrangement shall be
    treated as a specified health insurance policy, and the
    person referred to in such subparagraph shall be treated
    as the issuer.
    ``(B) Description of arrangements.--An arrangement
    is described in this subparagraph if under such
    arrangement fixed payments or premiums are received as
    consideration for any person's agreement to provide or
    arrange for the provision of accident or health coverage
    to residents of the United States, regardless of how
    such coverage is provided or arranged to be provided.

    ``(d) Adjustments for Increases in Health Care Spending.--In the
    case of any policy year ending in any fiscal year beginning after
    September 30, 2014, the dollar amount in effect under subsection (a) for
    such policy year shall be equal to the sum of such dollar amount for
    policy years ending in the previous fiscal year (determined after the
    application of this subsection), plus an amount equal to the product
    of--
    ``(1) such dollar amount for policy years ending in the
    previous fiscal year, multiplied by
    ``(2) the percentage increase in the projected per capita
    amount of National Health Expenditures, as most recently
    published by the Secretary before the beginning of the fiscal
    year.

    ``(e) Termination.--This section shall not apply to policy years
    ending after September 30, 2019.

    ``SEC. 4376. <> SELF-INSURED HEALTH PLANS.

    ``(a) Imposition of Fee.--In the case of any applicable self-insured
    health plan for each plan year ending after September 30, 2012, there is
    hereby imposed a fee equal to $2 ($1 in the case of plan years ending
    during fiscal year 2013) multiplied by the average number of lives
    covered under the plan.
    ``(b) Liability for Fee.--
    ``(1) In general.--The fee imposed by subsection (a) shall
    be paid by the plan sponsor.
    ``(2) Plan sponsor.-- <> For purposes of
    paragraph (1) the term `plan sponsor' means--

    [[Page 745]]

    ``(A) the employer in the case of a plan established
    or maintained by a single employer,
    ``(B) the employee organization in the case of a
    plan established or maintained by an employee
    organization,
    ``(C) in the case of--
    ``(i) a plan established or maintained by 2 or
    more employers or jointly by 1 or more employers
    and 1 or more employee organizations,
    ``(ii) a multiple employer welfare
    arrangement, or
    ``(iii) a voluntary employees' beneficiary
    association described in section 501(c)(9), the
    association, committee, joint board of trustees,
    or other similar group of representatives of the
    parties who establish or maintain the plan, or
    ``(D) the cooperative or association described in
    subsection (c)(2)(F) in the case of a plan established
    or maintained by such a cooperative or association.

    ``(c) Applicable Self-insured Health Plan.--
    <> For purposes of this section, the term `applicable
    self-insured health plan' means any plan for providing accident or
    health coverage if--
    ``(1) any portion of such coverage is provided other than
    through an insurance policy, and
    ``(2) such plan is established or maintained--
    ``(A) by 1 or more employers for the benefit of
    their employees or former employees,
    ``(B) by 1 or more employee organizations for the
    benefit of their members or former members,
    ``(C) jointly by 1 or more employers and 1 or more
    employee organizations for the benefit of employees or
    former employees,
    ``(D) by a voluntary employees' beneficiary
    association described in section 501(c)(9),
    ``(E) by any organization described in section
    501(c)(6), or
    ``(F) in the case of a plan not described in the
    preceding subparagraphs, by a multiple employer welfare
    arrangement (as defined in section 3(40) of Employee
    Retirement Income Security Act of 1974), a rural
    electric cooperative (as defined in section 3(40)(B)(iv)
    of such Act), or a rural telephone cooperative
    association (as defined in section 3(40)(B)(v) of such
    Act).

    ``(d) Adjustments for Increases in Health Care Spending.--In the
    case of any plan year ending in any fiscal year beginning after
    September 30, 2014, the dollar amount in effect under subsection (a) for
    such plan year shall be equal to the sum of such dollar amount for plan
    years ending in the previous fiscal year (determined after the
    application of this subsection), plus an amount equal to the product
    of--
    ``(1) such dollar amount for plan years ending in the
    previous fiscal year, multiplied by
    ``(2) the percentage increase in the projected per capita
    amount of National Health Expenditures, as most recently
    published by the Secretary before the beginning of the fiscal
    year.

    ``(e) Termination.--This section shall not apply to plan years
    ending after September 30, 2019.

    [[Page 746]]

    ``SEC. 4377. <> DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
    ``(1) Accident and health coverage.--The term `accident and
    health coverage' means any coverage which, if provided by an
    insurance policy, would cause such policy to be a specified
    health insurance policy (as defined in section 4375(c)).
    ``(2) Insurance policy.--The term `insurance policy' means
    any policy or other instrument whereby a contract of insurance
    is issued, renewed, or extended.
    ``(3) United states.--The term `United States' includes any
    possession of the United States.

    ``(b) Treatment of Governmental Entities.--
    ``(1) In general.--For purposes of this subchapter--
    ``(A) the term `person' includes any governmental
    entity, and
    ``(B) notwithstanding any other law or rule of law,
    governmental entities shall not be exempt from the fees
    imposed by this subchapter except as provided in
    paragraph (2).
    ``(2) Treatment of exempt governmental programs.--In the
    case of an exempt governmental program, no fee shall be imposed
    under section 4375 or section 4376 on any covered life under
    such program.
    ``(3) Exempt governmental program defined.--For purposes of
    this subchapter, the term `exempt governmental program' means--
    ``(A) any insurance program established under title
    XVIII of the Social Security Act,
    ``(B) the medical assistance program established by
    title XIX or XXI of the Social Security Act,
    ``(C) any program established by Federal law for
    providing medical care (other than through insurance
    policies) to individuals (or the spouses and dependents
    thereof) by reason of such individuals being members of
    the Armed Forces of the United States or veterans, and
    ``(D) any program established by Federal law for
    providing medical care (other than through insurance
    policies) to members of Indian tribes (as defined in
    section 4(d) of the Indian Health Care Improvement Act).

    ``(c) Treatment as Tax.--For purposes of subtitle F, the fees
    imposed by this subchapter shall be treated as if they were taxes.
    ``(d) No Cover Over to Possessions.--Notwithstanding any other
    provision of law, no amount collected under this subchapter shall be
    covered over to any possession of the United States.''.
    (B) Clerical amendments.--
    (i) Chapter 34 of such Code is amended by
    striking the chapter heading and inserting the
    following:

    [[Page 747]]

    ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

    ``subchapter a. policies issued by foreign insurers

    ``subchapter b. insured and self-insured health plans

    ``Subchapter A--Policies Issued By Foreign Insurers''.

    (ii) The table of chapters for subtitle D of
    such Code is amended by striking the item relating
    to chapter 34 and inserting the following new
    item:

    ``Chapter 34--Taxes on Certain Insurance Policies''.

    (f) Tax-exempt Status of the Patient-centered Outcomes Research
    Institute.--Subsection 501(l) of the Internal Revenue Code of
    1986 <> is amended by adding at the end the following
    new paragraph:
    ``(4) The Patient-Centered Outcomes Research Institute
    established under section 1181(b) of the Social Security Act.''.

    SEC. 6302. <> FEDERAL COORDINATING COUNCIL
    FOR COMPARATIVE EFFECTIVENESS RESEARCH.

    <> Notwithstanding any other provision of
    law, the Federal Coordinating Council for Comparative Effectiveness
    Research established under section 804 of Division A of the American
    Recovery and Reinvestment Act of 2009 (42 U.S.C. 299b-8), including the
    requirement under subsection (e)(2) of such section, shall terminate on
    the date of enactment of this Act.

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

    SEC. 6401. PROVIDER SCREENING AND OTHER ENROLLMENT REQUIREMENTS UNDER
    MEDICARE, MEDICAID, AND CHIP.

    (a) Medicare.--Section 1866(j) of the Social Security Act (42 U.S.C.
    1395cc(j)) is amended--
    (1) in paragraph (1)(A), by adding at the end the following:
    ``Such process shall include screening of providers and
    suppliers in accordance with paragraph (2), a provisional period
    of enhanced oversight in accordance with paragraph (3),
    disclosure requirements in accordance with paragraph (4), the
    imposition of temporary enrollment moratoria in accordance with
    paragraph (5), and the establishment of compliance programs in
    accordance with paragraph (6).'';
    (2) by redesignating paragraph (2) as paragraph (7); and
    (3) by inserting after paragraph (1) the following:
    ``(2) Provider screening.--
    ``(A) Procedures.-- <> Not later
    than 180 days after the date of enactment of this
    paragraph, the Secretary, in consultation with the
    Inspector General of the Department of Health and Human
    Services, shall establish procedures under which
    screening is conducted with respect to providers of
    medical or other items or services and suppliers under
    the program under this title, the Medicaid program under
    title XIX, and the CHIP program under title XXI.

    [[Page 748]]

    ``(B) Level of screening.--
    <> The Secretary shall determine
    the level of screening conducted under this paragraph
    according to the risk of fraud, waste, and abuse, as
    determined by the Secretary, with respect to the
    category of provider of medical or other items or
    services or supplier. Such screening--
    ``(i) shall include a licensure check, which
    may include such checks across States; and
    ``(ii) may, as the Secretary determines
    appropriate based on the risk of fraud, waste, and
    abuse described in the preceding sentence,
    include--
    ``(I) a criminal background check;
    ``(II) fingerprinting;
    ``(III) unscheduled and unannounced
    site visits, including preenrollment
    site visits;
    ``(IV) database checks (including
    such checks across States); and
    ``(V) such other screening as the
    Secretary determines appropriate.
    ``(C) Application fees.--
    ``(i) Individual providers.--Except as
    provided in clause (iii), the Secretary shall
    impose a fee on each individual provider of
    medical or other items or services or supplier
    (such as a physician, physician assistant, nurse
    practitioner, or clinical nurse specialist) with
    respect to which screening is conducted under this
    paragraph in an amount equal to--
    ``(I) for 2010, $200; and
    ``(II) for 2011 and each subsequent
    year, the amount determined under this
    clause for the preceding year, adjusted
    by the percentage change in the consumer
    price index for all urban consumers (all
    items; United States city average) for
    the 12-month period ending with June of
    the previous year.
    ``(ii) Institutional providers.--Except as
    provided in clause (iii), the Secretary shall
    impose a fee on each institutional provider of
    medical or other items or services or supplier
    (such as a hospital or skilled nursing facility)
    with respect to which screening is conducted under
    this paragraph in an amount equal to--
    ``(I) for 2010, $500; and
    ``(II) for 2011 and each subsequent
    year, the amount determined under this
    clause for the preceding year, adjusted
    by the percentage change in the consumer
    price index for all urban consumers (all
    items; United States city average) for
    the 12-month period ending with June of
    the previous year.
    ``(iii) Hardship exception; waiver for certain
    medicaid providers.-- <> The
    Secretary may, on a case-by-case basis, exempt a
    provider of medical or other items or services or
    supplier from the imposition of an application fee
    under this subparagraph if the Secretary
    determines that the imposition of the application
    fee would result in a hardship. The Secretary may

    [[Page 749]]

    waive the application fee under this subparagraph
    for providers enrolled in a State Medicaid program
    for whom the State demonstrates that imposition of
    the fee would impede beneficiary access to care.
    ``(iv) Use of funds.--Amounts collected as a
    result of the imposition of a fee under this
    subparagraph shall be used by the Secretary for
    program integrity efforts, including to cover the
    costs of conducting screening under this paragraph
    and to carry out this subsection and section
    1128J.
    ``(D) Application and enforcement.--
    ``(i) New providers of services and
    suppliers.--The screening under this paragraph
    shall apply, in the case of a provider of medical
    or other items or services or supplier who is not
    enrolled in the program under this title, title
    XIX , or title XXI as of the date of enactment of
    this paragraph, on or after the date that is 1
    year after such date of enactment.
    ``(ii) Current providers of services and
    suppliers.--The screening under this paragraph
    shall apply, in the case of a provider of medical
    or other items or services or supplier who is
    enrolled in the program under this title, title
    XIX, or title XXI as of such date of enactment, on
    or after the date that is 2 years after such date
    of enactment.
    ``(iii) Revalidation of enrollment.--
    <> Effective beginning on
    the date that is 180 days after such date of
    enactment, the screening under this paragraph
    shall apply with respect to the revalidation of
    enrollment of a provider of medical or other items
    or services or supplier in the program under this
    title, title XIX, or title XXI.
    ``(iv) Limitation on enrollment and
    revalidation of enrollment.--In no case may a
    provider of medical or other items or services or
    supplier who has not been screened under this
    paragraph be initially enrolled or reenrolled in
    the program under this title, title XIX, or title
    XXI on or after the date that is 3 years after
    such date of enactment.
    ``(E) Expedited rulemaking.--The Secretary may
    promulgate an interim final rule to carry out this
    paragraph.
    ``(3) Provisional period of enhanced oversight for new
    providers of services and suppliers.--
    ``(A) In general.-- <> The
    Secretary shall establish procedures to provide for a
    provisional period of not less than 30 days and not more
    than 1 year during which new providers of medical or
    other items or services and suppliers, as the Secretary
    determines appropriate, including categories of
    providers or suppliers, would be subject to enhanced
    oversight, such as prepayment review and payment caps,
    under the program under this title, the Medicaid program
    under title XIX. and the CHIP program under title XXI.
    ``(B) Implementation.--The Secretary may establish
    by program instruction or otherwise the procedures under
    this paragraph.

    [[Page 750]]

    ``(4) Increased disclosure requirements.--
    ``(A) Disclosure.--A provider of medical or other
    items or services or supplier who submits an application
    for enrollment or revalidation of enrollment in the
    program under this title, title XIX, or title XXI on or
    after the date that is 1 year after the date of
    enactment of this paragraph shall disclose (in a form
    and manner and at such time as determined by the
    Secretary) any current or previous affiliation (directly
    or indirectly) with a provider of medical or other items
    or services or supplier that has uncollected debt, has
    been or is subject to a payment suspension under a
    Federal health care program (as defined in section
    1128B(f)), has been excluded from participation under
    the program under this title, the Medicaid program under
    title XIX, or the CHIP program under title XXI, or has
    had its billing privileges denied or revoked.
    ``(B) Authority to deny enrollment.--
    <> If the Secretary determines
    that such previous affiliation poses an undue risk of
    fraud, waste, or abuse, the Secretary may deny such
    application. Such a denial shall be subject to appeal in
    accordance with paragraph (7).
    ``(5) Authority to adjust payments of providers of services
    and suppliers with the same tax identification number for past-
    due obligations.--
    ``(A) In general.--Notwithstanding any other
    provision of this title, in the case of an applicable
    provider of services or supplier, the Secretary may make
    any necessary adjustments to payments to the applicable
    provider of services or supplier under the program under
    this title in order to satisfy any past-due obligations
    described in subparagraph (B)(ii) of an obligated
    provider of services or supplier.
    ``(B) Definitions.--In this paragraph:
    ``(i) In general.--The term `applicable
    provider of services or supplier' means a provider
    of services or supplier that has the same taxpayer
    identification number assigned under section 6109
    of the Internal Revenue Code of 1986 as is
    assigned to the obligated provider of services or
    supplier under such section, regardless of whether
    the applicable provider of services or supplier is
    assigned a different billing number or national
    provider identification number under the program
    under this title than is assigned to the obligated
    provider of services or supplier.
    ``(ii) Obligated provider of services or
    supplier.--The term `obligated provider of
    services or supplier' means a provider of services
    or supplier that owes a past-due obligation under
    the program under this title (as determined by the
    Secretary).
    ``(6) Temporary moratorium on enrollment of new providers.--
    ``(A) In general.-- <> The
    Secretary may impose a temporary moratorium on the
    enrollment of new providers of services and suppliers,
    including categories of providers of services and
    suppliers, in the program under this title, under the
    Medicaid program under title XIX, or under

    [[Page 751]]

    the CHIP program under title XXI if the Secretary
    determines such moratorium is necessary to prevent or
    combat fraud, waste, or abuse under either such program.
    ``(B) Limitation on review.--There shall be no
    judicial review under section 1869, section 1878, or
    otherwise, of a temporary moratorium imposed under
    subparagraph (A).
    ``(7) Compliance programs.--
    ``(A) In general.--On or after the date of
    implementation determined by the Secretary under
    subparagraph (C), a provider of medical or other items
    or services or supplier within a particular industry
    sector or category shall, as a condition of enrollment
    in the program under this title, title XIX, or title
    XXI, establish a compliance program that contains the
    core elements established under subparagraph (B) with
    respect to that provider or supplier and industry or
    category.
    ``(B) Establishment of core elements.--The
    Secretary, in consultation with the Inspector General of
    the Department of Health and Human Services, shall
    establish core elements for a compliance program under
    subparagraph (A) for providers or suppliers within a
    particular industry or category.
    ``(C) Timeline for implementation.--
    <> The Secretary shall determine
    the timeline for the establishment of the core elements
    under subparagraph (B) and the date of the
    implementation of subparagraph (A) for providers or
    suppliers within a particular industry or category. The
    Secretary shall, in determining such date of
    implementation, consider the extent to which the
    adoption of compliance programs by a provider of medical
    or other items or services or supplier is widespread in
    a particular industry sector or with respect to a
    particular provider or supplier category.''.

    (b) Medicaid.--
    (1) State plan amendment.--Section 1902(a) of the Social
    Security Act (42 U.S.C. 1396a(a)), as amended by section
    4302(b), is amended--
    (A) in subsection (a)--
    (i) by striking ``and'' at the end of
    paragraph (75);
    (ii) by striking the period at the end of
    paragraph (76) and inserting a semicolon; and
    (iii) by inserting after paragraph (76) the
    following:
    ``(77) provide that the State shall comply with provider and
    supplier screening, oversight, and reporting requirements in
    accordance with subsection (ii);''; and
    (B) by adding at the end the following:

    ``(ii) Provider and Supplier Screening, Oversight, and Reporting
    Requirements.--For purposes of subsection (a)(77), the requirements of
    this subsection are the following:
    ``(1) Screening.--The State complies with the process for
    screening providers and suppliers under this title, as
    established by the Secretary under section 1886(j)(2).
    ``(2) Provisional period of enhanced oversight for new
    providers and suppliers.--The State complies with procedures to
    provide for a provisional period of enhanced oversight for new
    providers and suppliers under this title, as established by the
    Secretary under section 1886(j)(3).

    [[Page 752]]

    ``(3) Disclosure requirements.--The State requires providers
    and suppliers under the State plan or under a waiver of the plan
    to comply with the disclosure requirements established by the
    Secretary under section 1886(j)(4).
    ``(4) Temporary moratorium on enrollment of new providers or
    suppliers.--
    ``(A) Temporary moratorium imposed by the
    secretary.--
    ``(i) In general.--Subject to clause (ii), the
    State complies with any temporary moratorium on
    the enrollment of new providers or suppliers
    imposed by the Secretary under section 1886(j)(6).
    ``(ii) Exception.-- <> A
    State shall not be required to comply with a
    temporary moratorium described in clause (i) if
    the State determines that the imposition of such
    temporary moratorium would adversely impact
    beneficiaries' access to medical assistance.
    ``(B) Moratorium on enrollment of providers and
    suppliers.-- <> At the option of
    the State, the State imposes, for purposes of entering
    into participation agreements with providers or
    suppliers under the State plan or under a waiver of the
    plan, periods of enrollment moratoria, or numerical caps
    or other limits, for providers or suppliers identified
    by the Secretary as being at high-risk for fraud, waste,
    or abuse as necessary to combat fraud, waste, or abuse,
    but only if the State determines that the imposition of
    any such period, cap, or other limits would not
    adversely impact beneficiaries' access to medical
    assistance.
    ``(5) Compliance programs.--The State requires providers and
    suppliers under the State plan or under a waiver of the plan to
    establish, in accordance with the requirements of section
    1866(j)(7), a compliance program that contains the core elements
    established under subparagraph (B) of that section 1866(j)(7)
    for providers or suppliers within a particular industry or
    category.
    ``(6) Reporting of adverse provider actions.--The State
    complies with the national system for reporting criminal and
    civil convictions, sanctions, negative licensure actions, and
    other adverse provider actions to the Secretary, through the
    Administrator of the Centers for Medicare & Medicaid Services,
    in accordance with regulations of the Secretary.
    ``(7) Enrollment and npi of ordering or referring
    providers.--The State requires--
    ``(A) all ordering or referring physicians or other
    professionals to be enrolled under the State plan or
    under a waiver of the plan as a participating provider;
    and
    ``(B) the national provider identifier of any
    ordering or referring physician or other professional to
    be specified on any claim for payment that is based on
    an order or referral of the physician or other
    professional.
    ``(8) Other state oversight.--Nothing in this subsection
    shall be interpreted to preclude or limit the ability of a State
    to engage in provider and supplier screening or enhanced
    provider and supplier oversight activities beyond those required
    by the Secretary.''.
    (2) <> Disclosure of medicare
    terminated providers and suppliers to states.--The Administrator
    of the Centers for

    [[Page 753]]

    Medicare & Medicaid Services shall establish a process for
    making available to the each State agency with responsibility
    for administering a State Medicaid plan (or a waiver of such
    plan) under title XIX of the Social Security Act or a child
    health plan under title XXI the name, national provider
    identifier, and other identifying information for any provider
    of medical or other items or services or supplier under the
    Medicare program under title XVIII or under the CHIP program
    under title XXI that is terminated from participation under that
    program within 30 days of the termination (and, with respect to
    all such providers or suppliers who are terminated from the
    Medicare program on the date of enactment of this Act, within 90
    days of such date).
    (3) Conforming amendment.--Section 1902(a)(23) of the Social
    Security Act (42 U.S.C. 1396a), is amended by inserting before
    the semicolon at the end the following: ``or by a provider or
    supplier to which a moratorium under subsection (ii)(4) is
    applied during the period of such moratorium''.

    (c) CHIP.--Section 2107(e)(1) of the Social Security Act (42 U.S.C.
    1397gg(e)(1)), as amended by section 2101(d), is amended--
    (1) by redesignating subparagraphs (D) through (M) as
    subparagraphs (E) through (N), respectively; and
    (2) by inserting after subparagraph (C), the following:
    ``(D) Subsections (a)(77) and (ii) of section 1902
    (relating to provider and supplier screening, oversight,
    and reporting requirements).''.

    SEC. 6402. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

    (a) In General.--Part A of title XI of the Social Security Act (42
    U.S.C. 1301 et seq.), as amended by sections 6002, 6004, and 6102, is
    amended by inserting after section 1128I the following new section:

    ``SEC. 1128J. <> MEDICARE AND MEDICAID PROGRAM
    INTEGRITY PROVISIONS.

    ``(a) Data Matching.--
    ``(1) Integrated data repository.--
    ``(A) Inclusion of certain data.--
    ``(i) In general.--The Integrated Data
    Repository of the Centers for Medicare & Medicaid
    Services shall include, at a minimum, claims and
    payment data from the following:
    ``(I) The programs under titles
    XVIII and XIX (including parts A, B, C,
    and D of title XVIII).
    ``(II) The program under title XXI.
    ``(III) Health-related programs
    administered by the Secretary of
    Veterans Affairs.
    ``(IV) Health-related programs
    administered by the Secretary of
    Defense.
    ``(V) The program of old-age,
    survivors, and disability insurance
    benefits established under title II.
    ``(VI) The Indian Health Service and
    the Contract Health Service program.
    ``(ii) Priority for inclusion of certain
    data.--Inclusion of the data described in
    subclause (I) of such clause in the Integrated
    Data Repository shall be a

    [[Page 754]]

    priority. Data described in subclauses (II)
    through (VI) of such clause shall be included in
    the Integrated Data Repository as appropriate.
    ``(B) Data sharing and matching.--
    ``(i) In general.-- <> The
    Secretary shall enter into agreements with the
    individuals described in clause (ii) under which
    such individuals share and match data in the
    system of records of the respective agencies of
    such individuals with data in the system of
    records of the Department of Health and Human
    Services for the purpose of identifying potential
    fraud, waste, and abuse under the programs under
    titles XVIII and XIX.
    ``(ii) Individuals described.--The following
    individuals are described in this clause:
    ``(I) The Commissioner of Social
    Security.
    ``(II) The Secretary of Veterans
    Affairs.
    ``(III) The Secretary of Defense.
    ``(IV) The Director of the Indian
    Health Service.
    ``(iii) Definition of system of records.--For
    purposes of this paragraph, the term `system of
    records' has the meaning given such term in
    section 552a(a)(5) of title 5, United States Code.
    ``(2) Access to claims and payment databases.--For purposes
    of conducting law enforcement and oversight activities and to
    the extent consistent with applicable information, privacy,
    security, and disclosure laws, including the regulations
    promulgated under the Health Insurance Portability and
    Accountability Act of 1996 and section 552a of title 5, United
    States Code, and subject to any information systems security
    requirements under such laws or otherwise required by the
    Secretary, the Inspector General of the Department of Health and
    Human Services and the Attorney General shall have access to
    claims and payment data of the Department of Health and Human
    Services and its contractors related to titles XVIII, XIX, and
    XXI.

    ``(b) OIG Authority To Obtain Information.--
    ``(1) In general.--Notwithstanding and in addition to any
    other provision of law, the Inspector General of the Department
    of Health and Human Services may, for purposes of protecting the
    integrity of the programs under titles XVIII and XIX, obtain
    information from any individual (including a beneficiary
    provided all applicable privacy protections are followed) or
    entity that--
    ``(A) is a provider of medical or other items or
    services, supplier, grant recipient, contractor, or
    subcontractor; or
    ``(B) directly or indirectly provides, orders,
    manufactures, distributes, arranges for, prescribes,
    supplies, or receives medical or other items or services
    payable by any Federal health care program (as defined
    in section 1128B(f)) regardless of how the item or
    service is paid for, or to whom such payment is made.
    ``(2) Inclusion of certain information.--Information which
    the Inspector General may obtain under paragraph (1) includes
    any supporting documentation necessary to validate claims for
    payment or payments under title XVIII or XIX,

    [[Page 755]]

    including a prescribing physician's medical records for an
    individual who is prescribed an item or service which is covered
    under part B of title XVIII, a covered part D drug (as defined
    in section 1860D-2(e)) for which payment is made under an MA-PD
    plan under part C of such title, or a prescription drug plan
    under part D of such title, and any records necessary for
    evaluation of the economy, efficiency, and effectiveness of the
    programs under titles XVIII and XIX.

    ``(c) Administrative Remedy for Knowing Participation by Beneficiary
    in Health Care Fraud Scheme.--
    ``(1) In general.-- <> In addition to any
    other applicable remedies, if an applicable individual has
    knowingly participated in a Federal health care fraud offense or
    a conspiracy to commit a Federal health care fraud offense, the
    Secretary shall impose an appropriate administrative penalty
    commensurate with the offense or conspiracy.
    ``(2) Applicable individual.-- <> For
    purposes of paragraph (1), the term `applicable individual'
    means an individual--
    ``(A) entitled to, or enrolled for, benefits under
    part A of title XVIII or enrolled under part B of such
    title;
    ``(B) eligible for medical assistance under a State
    plan under title XIX or under a waiver of such plan; or
    ``(C) eligible for child health assistance under a
    child health plan under title XXI.

    ``(d) Reporting and Returning of Overpayments.--
    ``(1) In general.--If a person has received an overpayment,
    the person shall--
    ``(A) report and return the overpayment to the
    Secretary, the State, an intermediary, a carrier, or a
    contractor, as appropriate, at the correct address; and
    ``(B) <> notify the Secretary,
    State, intermediary, carrier, or contractor to whom the
    overpayment was returned in writing of the reason for
    the overpayment.
    ``(2) Deadline for reporting and returning overpayments.--An
    overpayment must be reported and returned under paragraph (1) by
    the later of--
    ``(A) the date which is 60 days after the date on
    which the overpayment was identified; or
    ``(B) the date any corresponding cost report is due,
    if applicable.
    ``(3) Enforcement.--Any overpayment retained by a person
    after the deadline for reporting and returning the overpayment
    under paragraph (2) is an obligation (as defined in section
    3729(b)(3) of title 31, United States Code) for purposes of
    section 3729 of such title.
    ``(4) Definitions.--In this subsection:
    ``(A) Knowing and knowingly.--The terms `knowing'
    and `knowingly' have the meaning given those terms in
    section 3729(b) of title 31, United States Code.
    ``(B) Overpayment.--The term ``overpayment'' means
    any funds that a person receives or retains under title
    XVIII or XIX to which the person, after applicable
    reconciliation, is not entitled under such title.
    ``(C) Person.--
    ``(i) In general.--The term `person' means a
    provider of services, supplier, medicaid managed
    care organization (as defined in section
    1903(m)(1)(A)),

    [[Page 756]]

    Medicare Advantage organization (as defined in
    section 1859(a)(1)), or PDP sponsor (as defined in
    section 1860D-41(a)(13)).
    ``(ii) Exclusion.--Such term does not include
    a beneficiary.

    ``(e) Inclusion of National Provider Identifier on All Applications
    and Claims.-- <> The Secretary shall
    promulgate a regulation that requires, not later than January 1, 2011,
    all providers of medical or other items or services and suppliers under
    the programs under titles XVIII and XIX that qualify for a national
    provider identifier to include their national provider identifier on all
    applications to enroll in such programs and on all claims for payment
    submitted under such programs.''.

    (b) Access to Data.--
    (1) Medicare part d.--Section 1860D-15(f)(2) of the Social
    Security Act (42 U.S.C. 1395w-116(f)(2)) <> is amended by striking ``may be used by'' and all that
    follows through the period at the end and inserting ``may be
    used--
    ``(A) by officers, employees, and contractors of the
    Department of Health and Human Services for the purposes
    of, and to the extent necessary in--
    ``(i) carrying out this section; and
    ``(ii) conducting oversight, evaluation, and
    enforcement under this title; and
    ``(B) by the Attorney General and the Comptroller
    General of the United States for the purposes of, and to
    the extent necessary in, carrying out health oversight
    activities.''.
    (2) Data matching.--Section 552a(a)(8)(B) of title 5, United
    States Code, is amended--
    (A) in clause (vii), by striking ``or'' at the end;
    (B) in clause (viii), by inserting ``or'' after the
    semicolon; and
    (C) by adding at the end the following new clause:
    ``(ix) matches performed by the Secretary of
    Health and Human Services or the Inspector General
    of the Department of Health and Human Services
    with respect to potential fraud, waste, and abuse,
    including matches of a system of records with non-
    Federal records;''.
    (3) Matching agreements with the commissioner of social
    security.--Section 205(r) of the Social Security Act (42 U.S.C.
    405(r)) is amended by adding at the end the following new
    paragraph:
    ``(9)(A) The Commissioner of Social Security shall, upon the
    request of the Secretary or the Inspector General of the
    Department of Health and Human Services--
    ``(i) <> enter into an agreement
    with the Secretary or such Inspector General for the
    purpose of matching data in the system of records of the
    Social Security Administration and the system of records
    of the Department of Health and Human Services; and
    ``(ii) include in such agreement safeguards to
    assure the maintenance of the confidentiality of any
    information disclosed.

    [[Page 757]]

    ``(B) For purposes of this paragraph, the term `system of
    records' has the meaning given such term in section 552a(a)(5)
    of title 5, United States Code.''.

    (c) Withholding of Federal Matching Payments for States That Fail To
    Report Enrollee Encounter Data in the Medicaid Statistical Information
    System.--Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i))
    is amended--
    (1) in paragraph (23), by striking ``or'' at the end;
    (2) in paragraph (24), by striking the period at the end and
    inserting ``; or''; and
    (3) by adding at the end the following new paragraph:.
    ``(25) with respect to any amounts expended for medical
    assistance for individuals for whom the State does not report
    enrollee encounter data (as defined by the Secretary) to the
    Medicaid Statistical Information System (MSIS) in a timely
    manner (as determined by the Secretary).''.

    (d) Permissive Exclusions and Civil Monetary Penalties.--
    (1) Permissive exclusions.--Section 1128(b) of the Social
    Security Act (42 U.S.C. 1320a-7(b)) is amended by adding at the
    end the following new paragraph:
    ``(16) Making false statements or misrepresentation of
    material facts.--Any individual or entity that knowingly makes
    or causes to be made any false statement, omission, or
    misrepresentation of a material fact in any application,
    agreement, bid, or contract to participate or enroll as a
    provider of services or supplier under a Federal health care
    program (as defined in section 1128B(f)), including Medicare
    Advantage organizations under part C of title XVIII,
    prescription drug plan sponsors under part D of title XVIII,
    medicaid managed care organizations under title XIX, and
    entities that apply to participate as providers of services or
    suppliers in such managed care organizations and such plans.''.
    (2) Civil monetary penalties.--
    (A) In general.--Section 1128A(a) of the Social
    Security Act (42 U.S.C. 1320a-7a(a)) is amended--
    (i) in paragraph (1)(D), by striking ``was
    excluded'' and all that follows through the period
    at the end and inserting ``was excluded from the
    Federal health care program (as defined in section
    1128B(f)) under which the claim was made pursuant
    to Federal law.'';
    (ii) in paragraph (6), by striking ``or'' at
    the end;
    (iii) by inserting after paragraph (7), the
    following new paragraphs:
    ``(8) orders or prescribes a medical or other item or
    service during a period in which the person was excluded from a
    Federal health care program (as so defined), in the case where
    the person knows or should know that a claim for such medical or
    other item or service will be made under such a program;
    ``(9) knowingly makes or causes to be made any false
    statement, omission, or misrepresentation of a material fact in
    any application, bid, or contract to participate or enroll as a
    provider of services or a supplier under a Federal health care
    program (as so defined), including Medicare Advantage
    organizations under part C of title XVIII, prescription drug
    plan sponsors under part D of title XVIII, medicaid managed care
    organizations under title XIX, and entities that apply to
    participate

    [[Page 758]]

    as providers of services or suppliers in such managed care
    organizations and such plans;
    ``(10) knows of an overpayment (as defined in paragraph (4)
    of section 1128J(d)) and does not report and return the
    overpayment in accordance with such section;'';
    (iv) in the first sentence--
    (I) by striking the ``or'' after
    ``prohibited relationship occurs;''; and
    (II) by striking ``act)'' and
    inserting ``act; or in cases under
    paragraph (9), $50,000 for each false
    statement or misrepresentation of a
    material fact)''; and
    (v) in the second sentence, by striking
    ``purpose)'' and inserting ``purpose; or in cases
    under paragraph (9), an assessment of not more
    than 3 times the total amount claimed for each
    item or service for which payment was made based
    upon the application containing the false
    statement or misrepresentation of a material
    fact)''.
    (B) Clarification of treatment of certain charitable
    and other innocuous programs.--Section 1128A(i)(6) of
    the Social Security Act (42 U.S.C. 1320a-7a(i)(6)) is
    amended--
    (i) in subparagraph (C), by striking ``or'' at
    the end;
    (ii) in subparagraph (D), as redesignated by
    section 4331(e) of the Balanced Budget Act of 1997
    (Public Law 105-33), by striking the period at the
    end and inserting a semicolon;
    (iii) by redesignating subparagraph (D), as
    added by section 4523(c) of such Act, as
    subparagraph (E) and striking the period at the
    end and inserting ``; or''; and
    (iv) by adding at the end the following new
    subparagraphs:
    ``(F) <> any other remuneration
    which promotes access to care and poses a low risk of
    harm to patients and Federal health care programs (as
    defined in section 1128B(f) and designated by the
    Secretary under regulations);
    ``(G) the offer or transfer of items or services for
    free or less than fair market value by a person, if--
    ``(i) the items or services consist of
    coupons, rebates, or other rewards from a
    retailer;
    ``(ii) the items or services are offered or
    transferred on equal terms available to the
    general public, regardless of health insurance
    status; and
    ``(iii) the offer or transfer of the items or
    services is not tied to the provision of other
    items or services reimbursed in whole or in part
    by the program under title XVIII or a State health
    care program (as defined in section 1128(h));
    ``(H) the offer or transfer of items or services for
    free or less than fair market value by a person, if--
    ``(i) the items or services are not offered as
    part of any advertisement or solicitation;

    [[Page 759]]

    ``(ii) the items or services are not tied to
    the provision of other services reimbursed in
    whole or in part by the program under title XVIII
    or a State health care program (as so defined);
    ``(iii) there is a reasonable connection
    between the items or services and the medical care
    of the individual; and
    ``(iv) the person provides the items or
    services after determining in good faith that the
    individual is in financial need; or
    ``(I) effective on a date specified by the Secretary
    (but not earlier than January 1, 2011), the waiver by a
    PDP sponsor of a prescription drug plan under part D of
    title XVIII or an MA organization offering an MA-PD plan
    under part C of such title of any copayment for the
    first fill of a covered part D drug (as defined in
    section 1860D-2(e)) that is a generic drug for
    individuals enrolled in the prescription drug plan or
    MA-PD plan, respectively.''.

    (e) Testimonial Subpoena Authority in Exclusion-only Cases.--Section
    1128(f) of the Social Security Act (42 U.S.C. 1320a-7(f)) is amended by
    adding at the end the following new paragraph:
    ``(4) <> The provisions of subsections
    (d) and (e) of section 205 shall apply with respect to this
    section to the same extent as they are applicable with respect
    to title II. The Secretary may delegate the authority granted by
    section 205(d) (as made applicable to this section) to the
    Inspector General of the Department of Health and Human Services
    for purposes of any investigation under this section.''.

    (f) Health Care Fraud.--
    (1) Kickbacks.--Section 1128B of the Social Security Act (42
    U.S.C. 1320a-7b) is amended by adding at the end the following
    new subsection:

    ``(g) In addition to the penalties provided for in this section or
    section 1128A, a claim that includes items or services resulting from a
    violation of this section constitutes a false or fraudulent claim for
    purposes of subchapter III of chapter 37 of title 31, United States
    Code.''.
    (2) Revising the intent requirement.--Section 1128B of the
    Social Security Act (42 U.S.C. 1320a-7b), as amended by
    paragraph (1), is amended by adding at the end the following new
    subsection:

    ``(h) With respect to violations of this section, a person need not
    have actual knowledge of this section or specific intent to commit a
    violation of this section.''.
    (g) Surety Bond Requirements.--
    (1) Durable medical equipment.--Section 1834(a)(16)(B) of
    the Social Security Act (42 U.S.C. 1395m(a)(16)(B)) is amended
    by inserting ``that the Secretary determines is commensurate
    with the volume of the billing of the supplier'' before the
    period at the end.
    (2) Home health agencies.--Section 1861(o)(7)(C) of the
    Social Security Act (42 U.S.C. 1395x(o)(7)(C)) is amended by
    inserting ``that the Secretary determines is commensurate with
    the volume of the billing of the home health agency'' before the
    semicolon at the end.
    (3) Requirements for certain other providers of services and
    suppliers.--Section 1862 of the Social Security Act

    [[Page 760]]

    (42 U.S.C. 1395y) is amended by adding at the end the following
    new subsection:

    ``(n) Requirement of a Surety Bond for Certain Providers of Services
    and Suppliers.--
    ``(1) In general.--The Secretary may require a provider of
    services or supplier described in paragraph (2) to provide the
    Secretary on a continuing basis with a surety bond in a form
    specified by the Secretary in an amount (not less than $50,000)
    that the Secretary determines is commensurate with the volume of
    the billing of the provider of services or supplier.
    The <>  Secretary may waive the
    requirement of a bond under the preceding sentence in the case
    of a provider of services or supplier that provides a comparable
    surety bond under State law.
    ``(2) Provider of services or supplier described.--A
    provider of services or supplier described in this paragraph is
    a provider of services or supplier the Secretary determines
    appropriate based on the level of risk involved with respect to
    the provider of services or supplier, and consistent with the
    surety bond requirements under sections 1834(a)(16)(B) and
    1861(o)(7)(C).''.

    (h) Suspension of Medicare and Medicaid Payments Pending
    Investigation of Credible Allegations of Fraud.--
    (1) Medicare.--Section 1862 of the Social Security Act (42
    U.S.C. 1395y), as amended by subsection (g)(3), is amended by
    adding at the end the following new subsection:

    ``(o) Suspension of Payments Pending Investigation of Credible
    Allegations of Fraud.--
    ``(1) In general.-- <> The Secretary
    may suspend payments to a provider of services or supplier under
    this title pending an investigation of a credible allegation of
    fraud against the provider of services or supplier, unless the
    Secretary determines there is good cause not to suspend such
    payments.
    ``(2) Consultation.--The Secretary shall consult with the
    Inspector General of the Department of Health and Human Services
    in determining whether there is a credible allegation of fraud
    against a provider of services or supplier.
    ``(3) Promulgation of regulations.--The Secretary shall
    promulgate regulations to carry out this subsection and section
    1903(i)(2)(C).''.
    (2) Medicaid.--Section 1903(i)(2) of such Act (42 U.S.C.
    1396b(i)(2)) is amended--
    (A) in subparagraph (A), by striking ``or'' at the
    end; and
    (B) by inserting after subparagraph (B), the
    following:
    ``(C) <> by any individual or
    entity to whom the State has failed to suspend payments
    under the plan during any period when there is pending
    an investigation of a credible allegation of fraud
    against the individual or entity, as determined by the
    State in accordance with regulations promulgated by the
    Secretary for purposes of section 1862(o) and this
    subparagraph, unless the State determines in accordance
    with such regulations there is good cause not to suspend
    such payments; or''.

    (i) Increased Funding To Fight Fraud and Abuse.--
    (1) In general.--Section 1817(k) of the Social Security Act
    (42 U.S.C. 1395i(k)) is amended--

    [[Page 761]]

    (A) by adding at the end the following new
    paragraph:
    ``(7) Additional funding.--In addition to the funds
    otherwise appropriated to the Account from the Trust Fund under
    paragraphs (3) and (4) and for purposes described in paragraphs
    (3)(C) and (4)(A), there are hereby appropriated an additional
    $10,000,000 to such Account from such Trust Fund for each of
    fiscal years 2011 through 2020. The funds appropriated under
    this paragraph shall be allocated in the same proportion as the
    total funding appropriated with respect to paragraphs (3)(A) and
    (4)(A) was allocated with respect to fiscal year 2010, and shall
    be available without further appropriation until expended.'';
    and
    (B) in paragraph (4)(A), by inserting ``until
    expended'' after ``appropriation''.
    (2) Indexing of amounts appropriated.--
    (A) Departments of health and human services and
    justice.--Section 1817(k)(3)(A)(i) of the Social
    Security Act (42 U.S.C. 1395i(k)(3)(A)(i)) is amended--
    (i) in subclause (III), by inserting ``and''
    at the end;
    (ii) in subclause (IV)--
    (I) by striking ``for each of fiscal
    years 2007, 2008, 2009, and 2010'' and
    inserting ``for each fiscal year after
    fiscal year 2006''; and
    (II) by striking ``; and'' and
    inserting a period; and
    (iii) by striking subclause (V).
    (B) Office of the inspector general of the
    department of health and human services.--Section
    1817(k)(3)(A)(ii) of such Act (42 U.S.C.
    1395i(k)(3)(A)(ii)) is amended--
    (i) in subclause (VIII), by inserting ``and''
    at the end;
    (ii) in subclause (IX)--
    (I) by striking ``for each of fiscal
    years 2008, 2009, and 2010'' and
    inserting ``for each fiscal year after
    fiscal year 2007''; and
    (II) by striking ``; and'' and
    inserting a period; and
    (iii) by striking subclause (X).
    (C) Federal bureau of investigation.--Section
    1817(k)(3)(B) of the Social Security Act (42 U.S.C.
    1395i(k)(3)(B)) is amended--
    (i) in clause (vii), by inserting ``and'' at
    the end;
    (ii) in clause (viii)--
    (I) by striking ``for each of fiscal
    years 2007, 2008, 2009, and 2010'' and
    inserting ``for each fiscal year after
    fiscal year 2006''; and
    (II) by striking ``; and'' and
    inserting a period; and
    (iii) by striking clause (ix).
    (D) Medicare integrity program.--Section
    1817(k)(4)(C) of the Social Security Act (42 U.S.C.
    1395i(k)(4)(C)) is amended by adding at the end the
    following new clause:
    ``(ii) For each fiscal year after 2010, by the
    percentage increase in the consumer price index
    for all urban

    [[Page 762]]

    consumers (all items; United States city average)
    over the previous year.''.

    (j) Medicare Integrity Program and Medicaid Integrity Program.--
    (1) Medicare integrity program.--
    (A) Requirement to provide performance statistics.--
    Section 1893(c) of the Social Security Act (42 U.S.C.
    1395ddd(c)) is amended--
    (i) in paragraph (3), by striking ``and'' at
    the end;
    (ii) by redesignating paragraph (4) as
    paragraph (5); and
    (iii) by inserting after paragraph (3) the
    following new paragraph:
    ``(4) the entity agrees to provide the Secretary and the
    Inspector General of the Department of Health and Human Services
    with such performance statistics (including the number and
    amount of overpayments recovered, the number of fraud referrals,
    and the return on investment of such activities by the entity)
    as the Secretary or the Inspector General may request; and''.
    (B) Evaluations and annual report.--Section 1893 of
    the Social Security Act (42 U.S.C. 1395ddd) is amended
    by adding at the end the following new subsection:

    ``(i) Evaluations and Annual Report.--
    ``(1) Evaluations.--The Secretary shall conduct evaluations
    of eligible entities which the Secretary contracts with under
    the Program not less frequently than every 3 years.
    ``(2) Annual report.--Not later than 180 days after the end
    of each fiscal year (beginning with fiscal year 2011), the
    Secretary shall submit a report to Congress which identifies--
    ``(A) the use of funds, including funds transferred
    from the Federal Hospital Insurance Trust Fund under
    section 1817 and the Federal Supplementary Insurance
    Trust Fund under section 1841, to carry out this
    section; and
    ``(B) the effectiveness of the use of such funds.''.
    (C) Flexibility in pursuing fraud and abuse.--
    Section 1893(a) of the Social Security Act (42 U.S.C.
    1395ddd(a)) is amended by inserting ``, or otherwise,''
    after ``entities''.
    (2) Medicaid integrity program.--
    (A) Requirement to provide performance statistics.--
    Section 1936(c)(2) of the Social Security Act (42 U.S.C.
    1396u-6(c)(2)) is amended--
    (i) by redesignating subparagraph (D) as
    subparagraph (E); and
    (ii) by inserting after subparagraph (C) the
    following new subparagraph:
    ``(D) The entity agrees to provide the Secretary and
    the Inspector General of the Department of Health and
    Human Services with such performance statistics
    (including the number and amount of overpayments
    recovered, the number of fraud referrals, and the return
    on investment of such activities by the entity) as the
    Secretary or the Inspector General may request.''.
    (B) Evaluations and annual report.--Section 1936(e)
    of the Social Security Act <> (42
    U.S.C. 1396u-7(e)) is amended--

    [[Page 763]]

    (i) by redesignating paragraph (4) as
    paragraph (5); and
    (ii) by inserting after paragraph (3) the
    following new paragraph:
    ``(4) Evaluations.--The Secretary shall conduct evaluations
    of eligible entities which the Secretary contracts with under
    the Program not less frequently than every 3 years.''.

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

    SEC. 6403. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY
    AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER DATA
    BANK.

    (a) Information Reported by Federal Agencies and Health Plans.--
    Section 1128E of the Social Security Act (42 U.S.C. 1320a-7e) is
    amended--
    (1) by striking subsection (a) and inserting the following:

    ``(a) In General.--The Secretary shall maintain a national health
    care fraud and abuse data collection program under this section for the
    reporting of certain final adverse actions (not including settlements in
    which no findings of liability have been made) against health care
    providers, suppliers, or practitioners as required by subsection (b),
    with access as set forth in subsection (d), and shall furnish the
    information collected under this section to the National Practitioner
    Data Bank established pursuant to the Health Care Quality Improvement
    Act of 1986 (42 U.S.C. 11101 et seq.).'';
    (2) by striking subsection (d) and inserting the following:

    ``(d) Access to Reported Information.--
    ``(1) Availability.--The information collected under this
    section shall be available from the National Practitioner Data
    Bank to the agencies, authorities, and officials which are
    provided under section 1921(b) information reported under
    section 1921(a).
    ``(2) Fees for disclosure.--The Secretary may establish or
    approve reasonable fees for the disclosure of information under
    this section. The amount of such a fee may not exceed the costs
    of processing the requests for disclosure and of providing such
    information. Such fees shall be available to the Secretary to
    cover such costs.'';
    (3) by striking subsection (f) and inserting the following:

    ``(f) Appropriate Coordination.--In implementing this section, the
    Secretary shall provide for the maximum appropriate coordination with
    part B of the Health Care Quality Improvement Act of 1986 (42 U.S.C.
    11131 et seq.) and section 1921.''; and
    (4) in subsection (g)--
    (A) in paragraph (1)(A)--
    (i) in clause (iii)--
    (I) by striking ``or State'' each
    place it appears;
    (II) by redesignating subclauses
    (II) and (III) as subclauses (III) and
    (IV), respectively; and
    (III) by inserting after subclause
    (I) the following new subclause:

    [[Page 764]]

    ``(II) any dismissal or closure of
    the proceedings by reason of the
    provider, supplier, or practitioner
    surrendering their license or leaving
    the State or jurisdiction''; and
    (ii) by striking clause (iv) and inserting the
    following:
    ``(iv) Exclusion from participation in a
    Federal health care program (as defined in section
    1128B(f)).'';
    (B) in paragraph (3)--
    (i) by striking subparagraphs (D) and (E); and
    (ii) by redesignating subparagraph (F) as
    subparagraph (D); and
    (C) in subparagraph (D) (as so redesignated), by
    striking ``or State''.

    (b) Information Reported by State Law or Fraud Enforcement
    Agencies.--Section 1921 of the Social Security Act (42 U.S.C. 1396r-2)
    is amended--
    (1) in subsection (a)--
    (A) in paragraph (1)--
    (i) by striking ``system.--The State'' and all
    that follows through the semicolon and inserting
    system.--
    ``(A) Licensing or certification actions.--
    <> The State must have in
    effect a system of reporting the following information
    with respect to formal proceedings (as defined by the
    Secretary in regulations) concluded against a health
    care practitioner or entity by a State licensing or
    certification agency:'';
    (ii) by redesignating subparagraphs (A)
    through (D) as clauses (i) through (iv),
    respectively, and indenting appropriately;
    (iii) in subparagraph (A)(iii) (as so
    redesignated)--
    (I) by striking ``the license of''
    and inserting ``license or the right to
    apply for, or renew, a license by''; and
    (II) by inserting
    ``nonrenewability,'' after ``voluntary
    surrender,''; and
    (iv) by adding at the end the following new
    subparagraph:
    ``(B) Other final adverse actions.--
    <> The State must have in effect a
    system of reporting information with respect to any
    final adverse action (not including settlements in which
    no findings of liability have been made) taken against a
    health care provider, supplier, or practitioner by a
    State law or fraud enforcement agency.''; and
    (B) in paragraph (2), by striking ``the authority
    described in paragraph (1)'' and inserting ``a State
    licensing or certification agency or State law or fraud
    enforcement agency'';
    (2) in subsection (b)--
    (A) by striking paragraph (2) and inserting the
    following:
    ``(2) to State licensing or certification agencies and
    Federal agencies responsible for the licensing and certification
    of health care providers, suppliers, and licensed health care
    practitioners;'';

    [[Page 765]]

    (B) in each of paragraphs (4) and (6), by inserting
    ``, but only with respect to information provided
    pursuant to subsection (a)(1)(A)'' before the comma at
    the end;
    (C) by striking paragraph (5) and inserting the
    following:
    ``(5) to State law or fraud enforcement agencies,'';
    (D) by redesignating paragraphs (7) and (8) as
    paragraphs (8) and (9), respectively; and
    (E) by inserting after paragraph (6) the following
    new paragraph:
    ``(7) to health plans (as defined in section 1128C(c));'';
    (3) by redesignating subsection (d) as subsection (h), and
    by inserting after subsection (c) the following new subsections:

    ``(d) Disclosure and Correction of Information.--
    ``(1) Disclosure.--With respect to information reported
    pursuant to subsection (a)(1), the Secretary shall--
    ``(A) provide for disclosure of the information,
    upon request, to the health care practitioner who, or
    the entity that, is the subject of the information
    reported; and
    ``(B) <> establish procedures for
    the case where the health care practitioner or entity
    disputes the accuracy of the information reported.
    ``(2) Corrections.-- <> Each
    State licensing or certification agency and State law or fraud
    enforcement agency shall report corrections of information
    already reported about any formal proceeding or final adverse
    action described in subsection (a), in such form and manner as
    the Secretary prescribes by regulation.

    ``(e) Fees for Disclosure.--The Secretary may establish or approve
    reasonable fees for the disclosure of information under this section.
    The amount of such a fee may not exceed the costs of processing the
    requests for disclosure and of providing such information. Such fees
    shall be available to the Secretary to cover such costs.
    ``(f) Protection From Liability for Reporting.--No person or entity,
    including any agency designated by the Secretary in subsection (b),
    shall be held liable in any civil action with respect to any reporting
    of information as required under this section, without knowledge of the
    falsity of the information contained in the report.
    ``(g) References.--For purposes of this section:
    ``(1) State licensing or certification agency.--The term
    `State licensing or certification agency' includes any authority
    of a State (or of a political subdivision thereof) responsible
    for the licensing of health care practitioners (or any peer
    review organization or private accreditation entity reviewing
    the services provided by health care practitioners) or entities.
    ``(2) State law or fraud enforcement agency.--The term
    `State law or fraud enforcement agency' includes--
    ``(A) a State law enforcement agency; and
    ``(B) a State medicaid fraud control unit (as
    defined in section 1903(q)).
    ``(3) Final adverse action.--
    ``(A) In general.--Subject to subparagraph (B), the
    term `final adverse action' includes--

    [[Page 766]]

    ``(i) civil judgments against a health care
    provider, supplier, or practitioner in State court
    related to the delivery of a health care item or
    service;
    ``(ii) State criminal convictions related to
    the delivery of a health care item or service;
    ``(iii) exclusion from participation in State
    health care programs (as defined in section
    1128(h));
    ``(iv) any licensing or certification action
    described in subsection (a)(1)(A) taken against a
    supplier by a State licensing or certification
    agency; and
    ``(v) any other adjudicated actions or
    decisions that the Secretary shall establish by
    regulation.
    ``(B) Exception.--Such term does not include any
    action with respect to a malpractice claim.''; and
    (4) in subsection (h), as so redesignated, by striking ``The
    Secretary'' and all that follows through the period at the end
    and inserting ``In implementing this section, the Secretary
    shall provide for the maximum appropriate coordination with part
    B of the Health Care Quality Improvement Act of 1986 (42 U.S.C.
    11131 et seq.) and section 1128E.''.

    (c) Conforming Amendment.--Section 1128C(a)(1) of the Social
    Security Act (42 U.S.C. 1320a-7c(a)(1)) is amended--
    (1) in subparagraph (C), by adding ``and'' after the comma
    at the end;
    (2) in subparagraph (D), by striking ``, and'' and inserting
    a period; and
    (3) by striking subparagraph (E).

    (d) <> Transition Process; Effective
    Date.--
    (1) In general.--Effective on the date of enactment of this
    Act, the Secretary of Health and Human Services (in this section
    referred to as the ``Secretary'') shall implement a transition
    process under which, by not later than the end of the transition
    period described in paragraph (5), the Secretary shall cease
    operating the Healthcare Integrity and Protection Data Bank
    established under section 1128E of the Social Security Act (as
    in effect before the effective date specified in paragraph (6))
    and shall transfer all data collected in the Healthcare
    Integrity and Protection Data Bank to the National Practitioner
    Data Bank established pursuant to the Health Care Quality
    Improvement Act of 1986 (42 U.S.C. 11101 et
    seq.). <> During such transition process, the
    Secretary shall have in effect appropriate procedures to ensure
    that data collection and access to the Healthcare Integrity and
    Protection Data Bank and the National Practitioner Data Bank are
    not disrupted.
    (2) Regulations.--The Secretary shall promulgate regulations
    to carry out the amendments made by subsections (a) and (b).
    (3) Funding.--
    (A) Availability of fees.--Fees collected pursuant
    to section 1128E(d)(2) of the Social Security Act prior
    to the effective date specified in paragraph (6) for the
    disclosure of information in the Healthcare Integrity
    and Protection Data Bank shall be available to the
    Secretary, without fiscal year limitation, for payment
    of costs related to the transition process described in
    paragraph (1). Any such fees remaining after the
    transition period is complete shall

    [[Page 767]]

    be available to the Secretary, without fiscal year
    limitation, for payment of the costs of operating the
    National Practitioner Data Bank.
    (B) Availability of additional funds.--In addition
    to the fees described in subparagraph (A), any funds
    available to the Secretary or to the Inspector General
    of the Department of Health and Human Services for a
    purpose related to combating health care fraud, waste,
    or abuse shall be available to the extent necessary for
    operating the Healthcare Integrity and Protection Data
    Bank during the transition period, including systems
    testing and other activities necessary to ensure that
    information formerly reported to the Healthcare
    Integrity and Protection Data Bank will be accessible
    through the National Practitioner Data Bank after the
    end of such transition period.
    (4) Special provision for access to the national
    practitioner data bank by the department of veterans affairs.--
    (A) In general.-- <> Notwithstanding any other provision of law,
    during the 1-year period that begins on the effective
    date specified in paragraph (6), the information
    described in subparagraph (B) shall be available from
    the National Practitioner Data Bank to the Secretary of
    Veterans Affairs without charge.
    (B) Information described.--For purposes of
    subparagraph (A), the information described in this
    subparagraph is the information that would, but for the
    amendments made by this section, have been available to
    the Secretary of Veterans Affairs from the Healthcare
    Integrity and Protection Data Bank.
    (5) Transition period defined.--For purposes of this
    subsection, the term ``transition period'' means the period that
    begins on the date of enactment of this Act and ends on the
    later of--
    (A) the date that is 1 year after such date of
    enactment; or
    (B) the effective date of the regulations
    promulgated under paragraph (2).
    (6) Effective date.--The amendments made by subsections (a),
    (b), and (c) shall take effect on the first day after the final
    day of the transition period.

    SEC. 6404. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO
    NOT MORE THAN 12 MONTHS.

    (a) Reducing Maximum Period for Submission.--
    (1) Part a.--Section 1814(a) of the Social Security Act (42
    U.S.C. 1395f(a)(1)) is amended--
    (A) in paragraph (1), by striking ``period of 3
    calendar years'' and all that follows through the
    semicolon and inserting ``period ending 1 calendar year
    after the date of service;''; and
    (B) by adding at the end the following new sentence:
    ``In applying paragraph (1), the Secretary may specify
    exceptions to the 1 calendar year period specified in
    such paragraph.''
    (2) Part b.--

    [[Page 768]]

    (A) Section 1842(b)(3) of such Act (42 U.S.C.
    1395u(b)(3)(B)) is amended--
    (i) in subparagraph (B), in the flush language
    following clause (ii), by striking ``close of the
    calendar year following the year in which such
    service is furnished (deeming any service
    furnished in the last 3 months of any calendar
    year to have been furnished in the succeeding
    calendar year)'' and inserting ``period ending 1
    calendar year after the date of service''; and
    (ii) by adding at the end the following new
    sentence: ``In applying subparagraph (B), the
    Secretary may specify exceptions to the 1 calendar
    year period specified in such subparagraph.''
    (B) Section 1835(a) of such Act (42 U.S.C. 1395n(a))
    is amended--
    (i) in paragraph (1), by striking ``period of
    3 calendar years'' and all that follows through
    the semicolon and inserting ``period ending 1
    calendar year after the date of service;''; and
    (ii) by adding at the end the following new
    sentence: ``In applying paragraph (1), the
    Secretary may specify exceptions to the 1 calendar
    year period specified in such paragraph.''

    (b) <> Effective Date.--
    (1) In general.--The amendments made by subsection (a) shall
    apply to services furnished on or after January 1, 2010.
    (2) Services furnished before 2010.-- <> In
    the case of services furnished before January 1, 2010, a bill or
    request for payment under section 1814(a)(1), 1842(b)(3)(B), or
    1835(a) shall be filed not later that December 31, 2010.

    SEC. 6405. PHYSICIANS WHO ORDER ITEMS OR SERVICES REQUIRED TO BE
    MEDICARE ENROLLED PHYSICIANS OR ELIGIBLE PROFESSIONALS.

    (a) DME.--Section 1834(a)(11)(B) of the Social Security Act (42
    U.S.C. 1395m(a)(11)(B)) is amended by striking ``physician'' and
    inserting ``physician enrolled under section 1866(j) or an eligible
    professional under section 1848(k)(3)(B) that is enrolled under section
    1866(j)''.
    (b) Home Health Services.--
    (1) Part a.--Section 1814(a)(2) of such Act <> (42 U.S.C. 1395(a)(2)) is amended in the matter
    preceding subparagraph (A) by inserting ``in the case of
    services described in subparagraph (C), a physician enrolled
    under section 1866(j) or an eligible professional under section
    1848(k)(3)(B),'' before ``or, in the case of services''.
    (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C.
    1395n(a)(2)) is amended in the matter preceding subparagraph (A)
    by inserting ``, or in the case of services described in
    subparagraph (A), a physician enrolled under section 1866(j) or
    an eligible professional under section 1848(k)(3)(B),'' after
    ``a physician''.

    (c) <> Application to Other Items or
    Services.--The Secretary may extend the requirement applied by the
    amendments made by subsections (a) and (b) to durable medical equipment
    and home health services (relating to requiring certifications and
    written

    [[Page 769]]

    orders to be made by enrolled physicians and health professions) to all
    other categories of items or services under title XVIII of the Social
    Security Act (42 U.S.C. 1395 et seq.), including covered part D drugs as
    defined in section 1860D-2(e) of such Act (42 U.S.C. 1395w-102), that
    are ordered, prescribed, or referred by a physician enrolled under
    section 1866(j) of such Act (42 U.S.C. 1395cc(j)) or an eligible
    professional under section 1848(k)(3)(B) of such Act (42 U.S.C. 1395w-
    4(k)(3)(B)).

    (d) <> Effective Date.--The amendments
    made by this section shall apply to written orders and certifications
    made on or after July 1, 2010.

    SEC. 6406. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON
    REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

    (a) Physicians and Other Suppliers.--Section 1842(h) of the Social
    Security Act (42 U.S.C. 1395u(h)) is amended by adding at the end the
    following new paragraph:
    ``(9) The Secretary may revoke enrollment, for a period of not more
    than one year for each act, for a physician or supplier under section
    1866(j) if such physician or supplier fails to maintain and, upon
    request of the Secretary, provide access to documentation relating to
    written orders or requests for payment for durable medical equipment,
    certifications for home health services, or referrals for other items or
    services written or ordered by such physician or supplier under this
    title, as specified by the Secretary.''.
    (b) Providers of Services.--Section 1866(a)(1) of such Act (42
    U.S.C. 1395cc) is further amended--
    (1) in subparagraph (U), by striking at the end ``and'';
    (2) in subparagraph (V), by striking the period at the end
    and adding ``; and''; and
    (3) by adding at the end the following new subparagraph:
    ``(W) maintain and, upon request of the Secretary,
    provide access to documentation relating to written
    orders or requests for payment for durable medical
    equipment, certifications for home health services, or
    referrals for other items or services written or ordered
    by the provider under this title, as specified by the
    Secretary.''.

    (c) OIG Permissive Exclusion Authority.--Section 1128(b)(11) of the
    Social Security Act (42 U.S.C. 1320a-7(b)(11)) is amended by inserting
    ``, ordering, referring for furnishing, or certifying the need for''
    after ``furnishing''.
    (d) <> Effective Date.--The amendments
    made by this section shall apply to orders, certifications, and
    referrals made on or after January 1, 2010.

    SEC. 6407. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE
    PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH SERVICES
    OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

    (a) Condition of Payment for Home Health Services.--
    (1) Part a.--Section 1814(a)(2)(C) of such Act <> is amended--
    (A) by striking ``and such services'' and inserting
    ``such services''; and
    (B) by inserting after ``care of a physician'' the
    following: ``, and, in the case of a certification made
    by a physician after January 1, 2010, prior to making
    such

    [[Page 770]]

    certification the physician must document that the
    physician himself or herself has had a face-to-face
    encounter (including through use of telehealth, subject
    to the requirements in section 1834(m), and other than
    with respect to encounters that are incident to services
    involved) with the individual within a reasonable
    timeframe as determined by the Secretary''.
    (2) Part b.--Section 1835(a)(2)(A) of the Social Security
    Act <> is amended--
    (A) by striking ``and'' before ``(iii)''; and
    (B) by inserting after ``care of a physician'' the
    following: ``, and (iv) in the case of a certification
    after January 1, 2010, prior to making such
    certification the physician must document that the
    physician has had a face-to-face encounter (including
    through use of telehealth and other than with respect to
    encounters that are incident to services involved) with
    the individual during the 6-month period preceding such
    certification, or other reasonable timeframe as
    determined by the Secretary''.

    (b) Condition of Payment for Durable Medical Equipment.--Section
    1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B)) is
    amended--
    (1) by striking ``Order.--The Secretary'' and inserting
    ``Order.--
    ``(i) In general.--The Secretary''; and
    (2) by adding at the end the following new clause:
    ``(ii) Requirement for face to face
    encounter.--The Secretary shall require that such
    an order be written pursuant to the physician
    documenting that a physician, a physician
    assistant, a nurse practitioner, or a clinical
    nurse specialist (as those terms are defined in
    section 1861(aa)(5)) has had a face-to-face
    encounter (including through use of telehealth
    under subsection (m) and other than with respect
    to encounters that are incident to services
    involved) with the individual involved during the
    6-month period preceding such written order, or
    other reasonable timeframe as determined by the
    Secretary.''.

    (c) <> Application to Other Areas Under
    Medicare.--The Secretary may apply the face-to-face encounter
    requirement described in the amendments made by subsections (a) and (b)
    to other items and services for which payment is provided under title
    XVIII of the Social Security Act based upon a finding that such an
    decision would reduce the risk of waste, fraud, or abuse.

    (d) <> Application to Medicaid.--The
    requirements pursuant to the amendments made by subsections (a) and (b)
    shall apply in the case of physicians making certifications for home
    health services under title XIX of the Social Security Act in the same
    manner and to the same extent as such requirements apply in the case of
    physicians making such certifications under title XVIII of such Act.

    SEC. 6408. ENHANCED PENALTIES.

    (a) Civil Monetary Penalties for False Statements or Delaying
    Inspections.--Section 1128A(a) of the Social Security Act (42 U.S.C.
    1320a-7a(a)), as amended by section 5002(d)(2)(A), is amended--

    [[Page 771]]

    (1) in paragraph (6), by striking ``or'' at the end; and
    (2) by inserting after paragraph (7) the following new
    paragraphs:
    ``(8) knowingly makes, uses, or causes to be made or used, a
    false record or statement material to a false or fraudulent
    claim for payment for items and services furnished under a
    Federal health care program; or
    ``(9) fails to grant timely access, upon reasonable request
    (as defined by the Secretary in regulations), to the Inspector
    General of the Department of Health and Human Services, for the
    purpose of audits, investigations, evaluations, or other
    statutory functions of the Inspector General of the Department
    of Health and Human Services;''; and
    (3) in the first sentence--
    (A) by striking ``or in cases under paragraph (7)''
    and inserting ``in cases under paragraph (7)''; and
    (B) by striking ``act)'' and inserting ``act, in
    cases under paragraph (8), $50,000 for each false record
    or statement, or in cases under paragraph (9), $15,000
    for each day of the failure described in such
    paragraph)''.

    (b) Medicare Advantage and Part D Plans.--
    (1) Ensuring timely inspections relating to contracts with
    ma organizations.--Section 1857(d)(2) of such Act (42 U.S.C.
    1395w-27(d)(2)) is amended--
    (A) in subparagraph (A), by inserting ``timely''
    before ``inspect''; and
    (B) in subparagraph (B), by inserting ``timely''
    before ``audit and inspect''.
    (2) Marketing violations.--Section 1857(g)(1) of the Social
    Security Act (42 U.S.C. 1395w-27(g)(1)) is amended--
    (A) in subparagraph (F), by striking ``or'' at the
    end;
    (B) by inserting after subparagraph (G) the
    following new subparagraphs:
    ``(H) except as provided under subparagraph (C) or
    (D) of section 1860D-1(b)(1), enrolls an individual in
    any plan under this part without the prior consent of
    the individual or the designee of the individual;
    ``(I) transfers an individual enrolled under this
    part from one plan to another without the prior consent
    of the individual or the designee of the individual or
    solely for the purpose of earning a commission;
    ``(J) fails to comply with marketing restrictions
    described in subsections (h) and (j) of section 1851 or
    applicable implementing regulations or guidance; or
    ``(K) employs or contracts with any individual or
    entity who engages in the conduct described in
    subparagraphs (A) through (J) of this paragraph;''; and
    (C) by adding at the end the following new sentence:
    ``The <> Secretary may provide, in
    addition to any other remedies authorized by law, for
    any of the remedies described in paragraph (2), if the
    Secretary determines that any employee or agent of such
    organization, or any provider or supplier who contracts
    with such organization, has engaged in any conduct
    described in subparagraphs (A) through (K) of this
    paragraph.''.
    (3) Provision of false information.--Section 1857(g)(2)(A)
    of the Social Security Act (42 U.S.C. 1395w-

    [[Page 772]]

    27(g)(2)(A)) is amended by inserting ``except with respect to a
    determination under subparagraph (E), an assessment of not more
    than the amount claimed by such plan or plan sponsor based upon
    the misrepresentation or falsified information involved,'' after
    ``for each such determination,''.

    (c) Obstruction of Program Audits.--Section 1128(b)(2) of the Social
    Security Act (42 U.S.C. 1320a-7(b)(2)) is amended--
    (1) in the heading, by inserting ``or audit'' after
    ``investigation''; and
    (2) by striking ``investigation into'' and all that follows
    through the period and inserting ``investigation or audit
    related to--''
    ``(i) any offense described in paragraph (1)
    or in subsection (a); or
    ``(ii) the use of funds received, directly or
    indirectly, from any Federal health care program
    (as defined in section 1128B(f)).''.

    (d) <> Effective Date.--
    (1) In general.--Except as provided in paragraph (2), the
    amendments made by this section shall apply to acts committed on
    or after January 1, 2010.
    (2) Exception.--The amendments made by subsection (b)(1)
    take effect on the date of enactment of this Act.

    SEC. 6409. <> MEDICARE SELF-REFERRAL
    DISCLOSURE PROTOCOL.

    (a) Development of Self-Referral Disclosure Protocol.--
    (1) <> In general.--The Secretary of Health
    and Human Services, in cooperation with the Inspector General of
    the Department of Health and Human Services, shall establish,
    not later than 6 months after the date of the enactment of this
    Act, a protocol to enable health care providers of services and
    suppliers to disclose an actual or potential violation of
    section 1877 of the Social Security Act (42 U.S.C. 1395nn)
    pursuant to a self-referral disclosure protocol (in this section
    referred to as an ``SRDP''). The SRDP shall include direction to
    health care providers of services and suppliers on--
    (A) a specific person, official, or office to whom
    such disclosures shall be made; and
    (B) instruction on the implication of the SRDP on
    corporate integrity agreements and corporate compliance
    agreements.
    (2) Publication on internet website of srdp information.--
    The Secretary of Health and Human Services shall post
    information on the public Internet website of the Centers for
    Medicare & Medicaid Services to inform relevant stakeholders of
    how to disclose actual or potential violations pursuant to an
    SRDP.
    (3) Relation to advisory opinions.--The SRDP shall be
    separate from the advisory opinion process set forth in
    regulations implementing section 1877(g) of the Social Security
    Act.

    (b) Reduction in Amounts Owed.--The Secretary of Health and Human
    Services is authorized to reduce the amount due and owing for all
    violations under section 1877 of the Social Security Act to an amount
    less than that specified in subsection (g) of such section. In
    establishing such amount for a violation, the Secretary may consider the
    following factors:

    [[Page 773]]

    (1) The nature and extent of the improper or illegal
    practice.
    (2) The timeliness of such self-disclosure.
    (3) The cooperation in providing additional information
    related to the disclosure.
    (4) Such other factors as the Secretary considers
    appropriate.

    (c) Report.--Not later than 18 months after the date on which the
    SRDP protocol is established under subsection (a)(1), the Secretary
    shall submit to Congress a report on the implementation of this section.
    Such report shall include--
    (1) the number of health care providers of services and
    suppliers making disclosures pursuant to the SRDP;
    (2) the amounts collected pursuant to the SRDP;
    (3) the types of violations reported under the SRDP; and
    (4) such other information as may be necessary to evaluate
    the impact of this section.

    SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE MEDICAL EQUIPMENT,
    PROSTHETICS, ORTHOTICS, AND SUPPLIES COMPETITIVE ACQUISITION
    PROGRAM.

    (a) Expansion of Round 2 of the DME Competitive Bidding Program.--
    Section 1847(a)(1) of the Social Security Act (42 U.S.C. 1395w-3(a)(1))
    is amended--
    (1) in subparagraph (B)(i)(II), by striking ``70'' and
    inserting ``91''; and
    (2) in subparagraph (D)(ii)--
    (A) in subclause (I), by striking ``and'' at the
    end;
    (B) by redesignating subclause (II) as subclause
    (III); and
    (C) by inserting after subclause (I) the following
    new subclause:
    ``(II) the Secretary shall include
    the next 21 largest metropolitan
    statistical areas by total population
    (after those selected under subclause
    (I)) for such round; and''.

    (b) Requirement to Either Competitively Bid Areas or Use Competitive
    Bid Prices by 2016.--Section 1834(a)(1)(F) of the Social Security Act
    (42 U.S.C. 1395m(a)(1)(F)) is amended--
    (1) in clause (i), by striking ``and'' at the end;
    (2) in clause (ii)--
    (A) by inserting ``(and, in the case of covered
    items furnished on or after January 1, 2016, subject to
    clause (iii), shall)'' after ``may''; and
    (B) by striking the period at the end and inserting
    ``; and''; and
    (3) by adding at the end the following new clause:
    ``(iii) in the case of covered items furnished
    on or after January 1, 2016, the Secretary shall
    continue to make such adjustments described in
    clause (ii) as, under such competitive acquisition
    programs, additional covered items are phased in
    or information is updated as contracts under
    section 1847 are recompeted in accordance with
    section 1847(b)(3)(B).''.

    SEC. 6411. EXPANSION OF THE RECOVERY AUDIT CONTRACTOR (RAC) PROGRAM.

    (a) Expansion to Medicaid.--

    [[Page 774]]

    (1) State plan amendment.--Section 1902(a)(42) of the Social
    Security Act (42 U.S.C. 1396a(a)(42)) is amended--
    (A) by striking ``that the records'' and inserting
    ``that--
    ``(A) the records'';
    (B) by inserting ``and'' after the semicolon; and
    (C) by adding at the end the following:
    ``(B) <> not later than December
    31, 2010, the State shall--
    ``(i) establish a program under which the
    State contracts (consistent with State law and in
    the same manner as the Secretary enters into
    contracts with recovery audit contractors under
    section 1893(h), subject to such exceptions or
    requirements as the Secretary may require for
    purposes of this title or a particular State) with
    1 or more recovery audit contractors for the
    purpose of identifying underpayments and
    overpayments and recouping overpayments under the
    State plan and under any waiver of the State plan
    with respect to all services for which payment is
    made to any entity under such plan or waiver; and
    ``(ii) provide assurances satisfactory to the
    Secretary that--
    ``(I) under such contracts, payment
    shall be made to such a contractor only
    from amounts recovered;
    ``(II) from such amounts recovered,
    payment--
    ``(aa) shall be made on a
    contingent basis for collecting
    overpayments; and
    ``(bb) may be made in such
    amounts as the State may specify
    for identifying underpayments;
    ``(III) the State has an adequate
    process for entities to appeal any
    adverse determination made by such
    contractors; and
    ``(IV) such program is carried out
    in accordance with such requirements as
    the Secretary shall specify, including--
    ``(aa) for purposes of
    section 1903(a)(7), that amounts
    expended by the State to carry
    out the program shall be
    considered amounts expended as
    necessary for the proper and
    efficient administration of the
    State plan or a waiver of the
    plan;
    ``(bb) that section 1903(d)
    shall apply to amounts recovered
    under the program; and
    ``(cc) that the State and
    any such contractors under
    contract with the State shall
    coordinate such recovery audit
    efforts with other contractors
    or entities performing audits of
    entities receiving payments
    under the State plan or waiver
    in the State, including efforts
    with Federal and State law
    enforcement with respect to the
    Department of Justice, including
    the Federal Bureau of
    Investigations, the Inspector
    General of the Department of
    Health and Human Services, and
    the State medicaid fraud control
    unit; and''.

    [[Page 775]]

    (2) <> Coordination;
    regulations.--
    (A) In general.--The Secretary of Health and Human
    Services, acting through the Administrator of the
    Centers for Medicare & Medicaid Services, shall
    coordinate the expansion of the Recovery Audit
    Contractor program to Medicaid with States, particularly
    with respect to each State that enters into a contract
    with a recovery audit contractor for purposes of the
    State's Medicaid program prior to December 31, 2010.
    (B) Regulations.--The Secretary of Health and Human
    Services shall promulgate regulations to carry out this
    subsection and the amendments made by this subsection,
    including with respect to conditions of Federal
    financial participation, as specified by the Secretary.

    (b) Expansion to Medicare Parts C and D.--Section 1893(h) of the
    Social Security Act (42 U.S.C. 1395ddd(h)) is amended--
    (1) in paragraph (1), in the matter preceding subparagraph
    (A), by striking ``part A or B'' and inserting ``this title'';
    (2) in paragraph (2), by striking ``parts A and B'' and
    inserting ``this title'';
    (3) in paragraph (3), by inserting ``(not later than
    December 31, 2010, in the case of contracts relating to payments
    made under part C or D)'' after ``2010'';
    (4) in paragraph (4), in the matter preceding subparagraph
    (A), by striking ``part A or B'' and inserting ``this title'';
    and
    (5) by adding at the end the following:
    ``(9) Special rules relating to parts c and d.--The
    Secretary shall enter into contracts under paragraph (1) to
    require recovery audit contractors to--
    ``(A) ensure that each MA plan under part C has an
    anti-fraud plan in effect and to review the
    effectiveness of each such anti-fraud plan;
    ``(B) ensure that each prescription drug plan under
    part D has an anti-fraud plan in effect and to review
    the effectiveness of each such anti-fraud plan;
    ``(C) examine claims for reinsurance payments under
    section 1860D-15(b) to determine whether prescription
    drug plans submitting such claims incurred costs in
    excess of the allowable reinsurance costs permitted
    under paragraph (2) of that section; and
    ``(D) review estimates submitted by prescription
    drug plans by private plans with respect to the
    enrollment of high cost beneficiaries (as defined by the
    Secretary) and to compare such estimates with the
    numbers of such beneficiaries actually enrolled by such
    plans.''.

    (c) <> Annual Report.--The Secretary of
    Health and Human Services, acting through the Administrator of the
    Centers for Medicare & Medicaid Services, shall submit an annual report
    to Congress concerning the effectiveness of the Recovery Audit
    Contractor program under Medicaid and Medicare and shall include such
    reports recommendations for expanding or improving the program.

    [[Page 776]]

    Subtitle F--Additional Medicaid Program Integrity Provisions

    SEC. 6501. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID IF
    TERMINATED UNDER MEDICARE OR OTHER STATE PLAN.

    Section 1902(a)(39) of the Social Security Act (42 U.S.C. 42 U.S.C.
    1396a(a)) is amended by inserting after ``1128A,'' the following:
    ``terminate the participation of any individual or entity in such
    program if (subject to such exceptions as are permitted with respect to
    exclusion under sections 1128(c)(3)(B) and 1128(d)(3)(B)) participation
    of such individual or entity is terminated under title XVIII or any
    other State plan under this title,''.

    SEC. 6502. MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO CERTAIN
    OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as
    amended by section 6401(b), is amended by inserting after paragraph (77)
    the following:
    ``(78) provide that the State agency described in paragraph
    (9) exclude, with respect to a period, any individual or entity
    from participation in the program under the State plan if such
    individual or entity owns, controls, or manages an entity that
    (or if such entity is owned, controlled, or managed by an
    individual or entity that)--
    ``(A) has unpaid overpayments (as defined by the
    Secretary) under this title during such period
    determined by the Secretary or the State agency to be
    delinquent;
    ``(B) is suspended or excluded from participation
    under or whose participation is terminated under this
    title during such period; or
    ``(C) is affiliated with an individual or entity
    that has been suspended or excluded from participation
    under this title or whose participation is terminated
    under this title during such period;''.

    SEC. 6503. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES
    REQUIRED TO REGISTER UNDER MEDICAID.

    (a) In General.--Section 1902(a) of the Social Security Act (42
    U.S.C. 42 U.S.C. 1396a(a)), as amended by section 6502(a), is amended by
    inserting after paragraph (78), the following:
    ``(79) provide that any agent, clearinghouse, or other
    alternate payee (as defined by the Secretary) that submits
    claims on behalf of a health care provider must register with
    the State and the Secretary in a form and manner specified by
    the Secretary;''.

    SEC. 6504. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER
    MMIS TO DETECT FRAUD AND ABUSE.

    (a) <> In General.--Section 1903(r)(1)(F) of
    the Social Security Act (42 U.S.C. 1396b(r)(1)(F)) is amended by
    inserting after ``necessary'' the following: ``and including, for data
    submitted to the Secretary on or after January 1, 2010, data elements
    from the

    [[Page 777]]

    automated data system that the Secretary determines to be necessary for
    program integrity, program oversight, and administration, at such
    frequency as the Secretary shall determine''.

    (b) Managed Care Organizations.--
    (1) In general.--Section 1903(m)(2)(A)(xi) of the Social
    Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by
    inserting ``and for the provision of such data to the State at a
    frequency and level of detail to be specified by the Secretary''
    after ``patients''.
    (2) <> Effective date.--The
    amendment made by paragraph (1) shall apply with respect to
    contract years beginning on or after January 1, 2010.

    SEC. 6505. PROHIBITION ON PAYMENTS TO INSTITUTIONS OR ENTITIES LOCATED
    OUTSIDE OF THE UNITED STATES.

    Section 1902(a) of the Social Security Act <> (42 U.S.C. 1396b(a)), as amended by section 6503, is amended by
    inserting after paragraph (79) the following new paragraph:
    ``(80) provide that the State shall not provide any payments
    for items or services provided under the State plan or under a
    waiver to any financial institution or entity located outside of
    the United States;''.

    SEC. 6506. OVERPAYMENTS.

    (a) Extension of Period for Collection of Overpayments Due to
    Fraud.--
    (1) In general.--Section 1903(d)(2) of the Social Security
    Act (42 U.S.C. 1396b(d)(2)) is amended--
    (A) in subparagraph (C)--
    (i) in the first sentence, by striking ``60
    days'' and inserting ``1 year''; and
    (ii) in the second sentence, by striking ``60
    days'' and inserting ``1-year period''; and
    (B) in subparagraph (D)--
    (i) in inserting ``(i)'' after ``(D)''; and
    (ii) by adding at the end the following:

    ``(ii) In any case where the State is unable to recover a debt which
    represents an overpayment (or any portion thereof) made to a person or
    other entity due to fraud within 1 year of discovery because there is
    not a final determination of the amount of the overpayment under an
    administrative or judicial process (as applicable), including as a
    result of a judgment being under appeal, no adjustment shall be made in
    the Federal payment to such State on account of such overpayment (or
    portion thereof) before the date that is 30 days after the date on which
    a final judgment (including, if applicable, a final determination on an
    appeal) is made.''.
    (2) <> Effective date.--The
    amendments made by this subsection take effect on the date of
    enactment of this Act and apply to overpayments discovered on or
    after that date.

    (b) <> Corrective Action.--
    The Secretary shall promulgate regulations that require States to
    correct Federally identified claims overpayments, of an ongoing or
    recurring nature, with new Medicaid Management Information System (MMIS)
    edits, audits, or other appropriate corrective action.

    [[Page 778]]

    SEC. 6507. MANDATORY STATE USE OF NATIONAL CORRECT CODING INITIATIVE.

    Section 1903(r) of the Social Security Act (42 U.S.C. 1396b(r)) is
    amended--
    (1) in paragraph (1)(B)--
    (A) in clause (ii), by striking ``and'' at the end;
    (B) in clause (iii), by adding ``and'' after the
    semi-colon; and
    (C) by adding at the end the following new clause:
    ``(iv) <> effective for
    claims filed on or after October 1, 2010,
    incorporate compatible methodologies of the
    National Correct Coding Initiative administered by
    the Secretary (or any successor initiative to
    promote correct coding and to control improper
    coding leading to inappropriate payment) and such
    other methodologies of that Initiative (or such
    other national correct coding methodologies) as
    the Secretary identifies in accordance with
    paragraph (4);''; and
    (2) by adding at the end the following new paragraph:

    ``(4) <> For purposes of paragraph (1)(B)(iv), the
    Secretary shall do the following:
    ``(A) Not later than September 1, 2010:
    ``(i) Identify those methodologies of the National
    Correct Coding Initiative administered by the Secretary
    (or any successor initiative to promote correct coding
    and to control improper coding leading to inappropriate
    payment) which are compatible to claims filed under this
    title.
    ``(ii) Identify those methodologies of such
    Initiative (or such other national correct coding
    methodologies) that should be incorporated into claims
    filed under this title with respect to items or services
    for which States provide medical assistance under this
    title and no national correct coding methodologies have
    been established under such Initiative with respect to
    title XVIII.
    ``(iii) <> Notify States of--
    ``(I) the methodologies identified under
    subparagraphs (A) and (B) (and of any other
    national correct coding methodologies identified
    under subparagraph (B)); and
    ``(II) how States are to incorporate such
    methodologies into claims filed under this title.
    ``(B) Not later than March 1, 2011, submit a report to
    Congress that includes the notice to States under clause (iii)
    of subparagraph (A) and an analysis supporting the
    identification of the methodologies made under clauses (i) and
    (ii) of subparagraph (A).''.

    SEC. 6508. <> GENERAL EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this subtitle, this
    subtitle and the amendments made by this subtitle take effect on January
    1, 2011, without regard to whether final regulations to carry out such
    amendments and subtitle have been promulgated by that date.
    (b) <> Delay if State Legislation
    Required.--In the case of a State plan for medical assistance under
    title XIX of the Social Security Act or a child health plan under title
    XXI of such Act which the Secretary of Health and Human Services
    determines

    [[Page 779]]

    requires State legislation (other than legislation appropriating funds)
    in order for the plan to meet the additional requirement imposed by the
    amendments made by this subtitle, the State plan or child health plan
    shall not be regarded as failing to comply with the requirements of such
    title solely on the basis of its failure to meet this additional
    requirement before the first day of the first calendar quarter beginning
    after the close of the first regular session of the State legislature
    that begins after the date of the enactment of this Act. For purposes of
    the previous sentence, in the case of a State that has a 2-year
    legislative session, each year of such session shall be deemed to be a
    separate regular session of the State legislature.

    Subtitle G--Additional Program Integrity Provisions

    SEC. 6601. PROHIBITION ON FALSE STATEMENTS AND REPRESENTATIONS.

    (a) Prohibition.--Part 5 of subtitle B of title I of the Employee
    Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is
    amended by adding at the end the following:

    ``SEC. 519. <> PROHIBITION ON FALSE STATEMENTS AND
    REPRESENTATIONS.

    ``No person, in connection with a plan or other arrangement that is
    multiple employer welfare arrangement described in section 3(40), shall
    make a false statement or false representation of fact, knowing it to be
    false, in connection with the marketing or sale of such plan or
    arrangement, to any employee, any member of an employee organization,
    any beneficiary, any employer, any employee organization, the Secretary,
    or any State, or the representative or agent of any such person, State,
    or the Secretary, concerning--
    ``(1) the financial condition or solvency of such plan or
    arrangement;
    ``(2) the benefits provided by such plan or arrangement;
    ``(3) the regulatory status of such plan or other
    arrangement under any Federal or State law governing collective
    bargaining, labor management relations, or intern union affairs;
    or
    ``(4) the regulatory status of such plan or other
    arrangement regarding exemption from state regulatory authority
    under this Act.

    This section shall not apply to any plan or arrangement that does not
    fall within the meaning of the term `multiple employer welfare
    arrangement' under section 3(40)(A).''.
    (b) Criminal Penalties.--Section 501 of the Employee Retirement
    Income Security Act of 1974 (29 U.S.C. 1131) is amended--
    (1) by inserting ``(a)'' before ``Any person''; and
    (2) by adding at the end the following:

    ``(b) Any person that violates section 519 shall upon conviction be
    imprisoned not more than 10 years or fined under title 18, United States
    Code, or both.''.
    (c) Conforming Amendment.--The table of sections for part 5 of
    subtitle B of title I of the Employee Retirement Income Security Act of
    1974 is amended by adding at the end the following:

    ``Sec. 519. Prohibition on false statement and representations.''.

    [[Page 780]]

    SEC. 6602. CLARIFYING DEFINITION.

    Section 24(a)(2) of title 18, United States Code, is amended by
    inserting ``or section 411, 518, or 511 of the Employee Retirement
    Income Security Act of 1974,'' after ``1954 of this title''.

    SEC. 6603. DEVELOPMENT OF MODEL UNIFORM REPORT FORM.

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

    ``SEC. 2794. <> UNIFORM FRAUD AND ABUSE REFERRAL
    FORMAT.

    ``The Secretary shall request the National Association of Insurance
    Commissioners to develop a model uniform report form for private health
    insurance issuer seeking to refer suspected fraud and abuse to State
    insurance departments or other responsible State agencies for
    investigation. The Secretary shall request that the National Association
    of Insurance Commissioners develop recommendations for uniform reporting
    standards for such referrals.''.

    SEC. 6604. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND ABUSE.

    (a) In General.--Part 5 of subtitle B of title I of the Employee
    Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as
    amended by section 6601, is further amended by adding at the end the
    following:

    ``SEC. 520. <> APPLICABILITY OF STATE LAW TO COMBAT
    FRAUD AND ABUSE.

    ``The Secretary may, for the purpose of identifying, preventing, or
    prosecuting fraud and abuse, adopt regulatory standards establishing, or
    issue an order relating to a specific person establishing, that a person
    engaged in the business of providing insurance through a multiple
    employer welfare arrangement described in section 3(40) is subject to
    the laws of the States in which such person operates which regulate
    insurance in such State, notwithstanding section 514(b)(6) of this Act
    or the Liability Risk Retention Act of 1986, and regardless of whether
    the law of the State is otherwise preempted under any of such
    provisions. This section shall not apply to any plan or arrangement that
    does not fall within the meaning of the term `multiple employer welfare
    arrangement' under section 3(40)(A).''.
    (b) Conforming Amendment.--The table of sections for part 5 of
    subtitle B of title I of the Employee Retirement Income Security Act of
    1974, as amended by section 6601, is further amended by adding at the
    end the following:

    ``Sec. 520. Applicability of State law to combat fraud and abuse.''.

    SEC. 6605. ENABLING THE DEPARTMENT OF LABOR TO ISSUE ADMINISTRATIVE
    SUMMARY CEASE AND DESIST ORDERS AND SUMMARY SEIZURES ORDERS
    AGAINST PLANS THAT ARE IN FINANCIALLY HAZARDOUS CONDITION.

    (a) In General.--Part 5 of subtitle B of title I of the Employee
    Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as
    amended by section 6604, is further amended by adding at the end the
    following:

    [[Page 781]]

    ``SEC. 521. <> ADMINISTRATIVE SUMMARY CEASE AND
    DESIST ORDERS AND SUMMARY SEIZURE ORDERS AGAINST MULTIPLE
    EMPLOYER WELFARE ARRANGEMENTS IN FINANCIALLY HAZARDOUS
    CONDITION.

    ``(a) In General.--The Secretary may issue a cease and desist (ex
    parte) order under this title if it appears to the Secretary that the
    alleged conduct of a multiple employer welfare arrangement described in
    section 3(40), other than a plan or arrangement described in subsection
    (g), is fraudulent, or creates an immediate danger to the public safety
    or welfare, or is causing or can be reasonably expected to cause
    significant, imminent, and irreparable public injury.
    ``(b) Hearing.--A person that is adversely affected by the issuance
    of a cease and desist order under subsection (a) may request a hearing
    by the Secretary regarding such order. The Secretary may require that a
    proceeding under this section, including all related information and
    evidence, be conducted in a confidential manner.
    ``(c) Burden of Proof.--The burden of proof in any hearing conducted
    under subsection (b) shall be on the party requesting the hearing to
    show cause why the cease and desist order should be set aside.
    ``(d) Determination.--Based upon the evidence presented at a hearing
    under subsection (b), the cease and desist order involved may be
    affirmed, modified, or set aside by the Secretary in whole or in part.
    ``(e) Seizure.--The Secretary may issue a summary seizure order
    under this title if it appears that a multiple employer welfare
    arrangement is in a financially hazardous condition.
    ``(f) Regulations.--The Secretary may promulgate such regulations or
    other guidance as may be necessary or appropriate to carry out this
    section.
    ``(g) Exception.--This section shall not apply to any plan or
    arrangement that does not fall within the meaning of the term `multiple
    employer welfare arrangement' under section 3(40)(A).''.
    (b) Conforming Amendment.--The table of sections for part 5 of
    subtitle B of title I of the Employee Retirement Income Security Act of
    1974, as amended by section 6604, is further amended by adding at the
    end the following:

    ``Sec. 521. Administrative summary cease and desist orders and summary
    seizure orders against health plans in financially hazardous
    condition.''.

    SEC. 6606. MEWA PLAN REGISTRATION WITH DEPARTMENT OF LABOR.

    Section 101(g) of the Employee Retirement Income Security Act of
    1974 (29 U.S.C. 1021(g)) is amended--
    (1) by striking ``Secretary may'' and inserting ``Secretary
    shall''; and
    (2) by inserting ``to register with the Secretary prior to
    operating in a State and may, by regulation, require such
    multiple employer welfare arrangements'' after ``not group
    health plans''.

    SEC. 6607. PERMITTING EVIDENTIARY PRIVILEGE AND CONFIDENTIAL
    COMMUNICATIONS.

    Section 504 of the Employee Retirement Income Security Act of 1974
    (29 U.S.C. 1134) is amended by adding at the end the following:

    [[Page 782]]

    ``(d) The Secretary may promulgate a regulation that provides an
    evidentiary privilege for, and provides for the confidentiality of
    communications between or among, any of the following entities or their
    agents, consultants, or employees:
    ``(1) A State insurance department.
    ``(2) A State attorney general.
    ``(3) The National Association of Insurance Commissioners.
    ``(4) The Department of Labor.
    ``(5) The Department of the Treasury.
    ``(6) The Department of Justice.
    ``(7) The Department of Health and Human Services.
    ``(8) Any other Federal or State authority that the
    Secretary determines is appropriate for the purposes of
    enforcing the provisions of this title.

    ``(e) <> The privilege established under
    subsection (d) shall apply to communications related to any
    investigation, audit, examination, or inquiry conducted or coordinated
    by any of the agencies. A communication that is privileged under
    subsection (d) shall not waive any privilege otherwise available to the
    communicating agency or to any person who provided the information that
    is communicated.''.

    Subtitle H <> --Elder Justice Act

    SEC. 6701. <> SHORT TITLE OF SUBTITLE.

    This subtitle may be cited as the ``Elder Justice Act of 2009''.

    SEC. 6702. <> DEFINITIONS.

    Except as otherwise specifically provided, any term that is defined
    in section 2011 of the Social Security Act (as added by section 6703(a))
    and is used in this subtitle has the meaning given such term by such
    section.

    SEC. 6703. ELDER JUSTICE.

    (a) Elder Justice.--
    (1) In general.--Title XX of the Social Security Act (42
    U.S.C. 1397 et seq.) is amended--
    (A) in the heading, by inserting ``AND ELDER
    JUSTICE'' after ``SOCIAL SERVICES'';
    (B) by inserting before section 2001 the following:

    ``Subtitle A--Block Grants to States for Social Services'';

    and
    (C) by adding at the end the following:

    ``Subtitle B--Elder Justice

    ``SEC. 2011. <> DEFINITIONS.

    ``In this subtitle:
    ``(1) Abuse.--The term `abuse' means the knowing infliction
    of physical or psychological harm or the knowing deprivation of
    goods or services that are necessary to meet essential needs or
    to avoid physical or psychological harm.

    [[Page 783]]

    ``(2) Adult protective services.--The term `adult protective
    services' means such services provided to adults as the
    Secretary may specify and includes services such as--
    ``(A) receiving reports of adult abuse, neglect, or
    exploitation;
    ``(B) investigating the reports described in
    subparagraph (A);
    ``(C) case planning, monitoring, evaluation, and
    other case work and services; and
    ``(D) providing, arranging for, or facilitating the
    provision of medical, social service, economic, legal,
    housing, law enforcement, or other protective,
    emergency, or support services.
    ``(3) Caregiver.--The term `caregiver' means an individual
    who has the responsibility for the care of an elder, either
    voluntarily, by contract, by receipt of payment for care, or as
    a result of the operation of law, and means a family member or
    other individual who provides (on behalf of such individual or
    of a public or private agency, organization, or institution)
    compensated or uncompensated care to an elder who needs
    supportive services in any setting.
    ``(4) Direct care.--The term `direct care' means care by an
    employee or contractor who provides assistance or long-term care
    services to a recipient.
    ``(5) Elder.--The term `elder' means an individual age 60 or
    older.
    ``(6) Elder justice.--The term `elder justice' means--
    ``(A) from a societal perspective, efforts to--
    ``(i) prevent, detect, treat, intervene in,
    and prosecute elder abuse, neglect, and
    exploitation; and
    ``(ii) protect elders with diminished capacity
    while maximizing their autonomy; and
    ``(B) from an individual perspective, the
    recognition of an elder's rights, including the right to
    be free of abuse, neglect, and exploitation.
    ``(7) Eligible entity.--The term `eligible entity' means a
    State or local government agency, Indian tribe or tribal
    organization, or any other public or private entity that is
    engaged in and has expertise in issues relating to elder justice
    or in a field necessary to promote elder justice efforts.
    ``(8) Exploitation.--The term `exploitation' means the
    fraudulent or otherwise illegal, unauthorized, or improper act
    or process of an individual, including a caregiver or fiduciary,
    that uses the resources of an elder for monetary or personal
    benefit, profit, or gain, or that results in depriving an elder
    of rightful access to, or use of, benefits, resources,
    belongings, or assets.
    ``(9) Fiduciary.--The term `fiduciary'--
    ``(A) means a person or entity with the legal
    responsibility--
    ``(i) to make decisions on behalf of and for
    the benefit of another person; and
    ``(ii) to act in good faith and with fairness;
    and
    ``(B) includes a trustee, a guardian, a conservator,
    an executor, an agent under a financial power of
    attorney or health care power of attorney, or a
    representative payee.

    [[Page 784]]

    ``(10) Grant.--The term `grant' includes a contract,
    cooperative agreement, or other mechanism for providing
    financial assistance.
    ``(11) Guardianship.--The term `guardianship' means--
    ``(A) the process by which a State court determines
    that an adult individual lacks capacity to make
    decisions about self-care or property, and appoints
    another individual or entity known as a guardian, as a
    conservator, or by a similar term, as a surrogate
    decisionmaker;
    ``(B) the manner in which the court-appointed
    surrogate decisionmaker carries out duties to the
    individual and the court; or
    ``(C) the manner in which the court exercises
    oversight of the surrogate decisionmaker.
    ``(12) Indian tribe.--
    ``(A) In general.--The term `Indian tribe' has the
    meaning given such term in section 4 of the Indian Self-
    Determination and Education Assistance Act (25 U.S.C.
    450b).
    ``(B) Inclusion of pueblo and rancheria.--The term
    `Indian tribe' includes any Pueblo or Rancheria.
    ``(13) Law enforcement.--The term `law enforcement' means
    the full range of potential responders to elder abuse, neglect,
    and exploitation including--
    ``(A) police, sheriffs, detectives, public safety
    officers, and corrections personnel;
    ``(B) prosecutors;
    ``(C) medical examiners;
    ``(D) investigators; and
    ``(E) coroners.
    ``(14) Long-term care.--
    ``(A) In general.--The term `long-term care' means
    supportive and health services specified by the
    Secretary for individuals who need assistance because
    the individuals have a loss of capacity for self-care
    due to illness, disability, or vulnerability.
    ``(B) Loss of capacity for self-care.--For purposes
    of subparagraph (A), the term `loss of capacity for
    self-care' means an inability to engage in 1 or more
    activities of daily living, including eating, dressing,
    bathing, management of one's financial affairs, and
    other activities the Secretary determines appropriate.
    ``(15) Long-term care facility.--The term `long-term care
    facility' means a residential care provider that arranges for,
    or directly provides, long-term care.
    ``(16) Neglect.--The term `neglect' means--
    ``(A) the failure of a caregiver or fiduciary to
    provide the goods or services that are necessary to
    maintain the health or safety of an elder; or
    ``(B) self-neglect.
    ``(17) Nursing facility.--
    ``(A) In general.--The term `nursing facility' has
    the meaning given such term under section 1919(a).
    ``(B) Inclusion of skilled nursing facility.--The
    term `nursing facility' includes a skilled nursing
    facility (as defined in section 1819(a)).

    [[Page 785]]

    ``(18) Self-neglect.--The term `self-neglect' means an
    adult's inability, due to physical or mental impairment or
    diminished capacity, to perform essential self-care tasks
    including--
    ``(A) obtaining essential food, clothing, shelter,
    and medical care;
    ``(B) obtaining goods and services necessary to
    maintain physical health, mental health, or general
    safety; or
    ``(C) managing one's own financial affairs.
    ``(19) Serious bodily injury.--
    ``(A) In general.--The term `serious bodily injury'
    means an injury--
    ``(i) involving extreme physical pain;
    ``(ii) involving substantial risk of death;
    ``(iii) involving protracted loss or
    impairment of the function of a bodily member,
    organ, or mental faculty; or
    ``(iv) requiring medical intervention such as
    surgery, hospitalization, or physical
    rehabilitation.
    ``(B) Criminal sexual abuse.--Serious bodily injury
    shall be considered to have occurred if the conduct
    causing the injury is conduct described in section 2241
    (relating to aggravated sexual abuse) or 2242 (relating
    to sexual abuse) of title 18, United States Code, or any
    similar offense under State law.
    ``(20) Social.--The term `social', when used with respect to
    a service, includes adult protective services.
    ``(21) State legal assistance developer.--The term `State
    legal assistance developer' means an individual described in
    section 731 of the Older Americans Act of 1965.
    ``(22) State long-term care ombudsman.--The term `State
    Long-Term Care Ombudsman' means the State Long-Term Care
    Ombudsman described in section 712(a)(2) of the Older Americans
    Act of 1965.

    ``SEC. 2012. <> GENERAL PROVISIONS.

    ``(a) Protection of Privacy.--In pursuing activities under this
    subtitle, the Secretary shall ensure the protection of individual health
    privacy consistent with the regulations promulgated under section 264(c)
    of the Health Insurance Portability and Accountability Act of 1996 and
    applicable State and local privacy regulations.
    ``(b) Rule of Construction.--Nothing in this subtitle shall be
    construed to interfere with or abridge an elder's right to practice his
    or her religion through reliance on prayer alone for healing when this
    choice--
    ``(1) is contemporaneously expressed, either orally or in
    writing, with respect to a specific illness or injury which the
    elder has at the time of the decision by an elder who is
    competent at the time of the decision;
    ``(2) is previously set forth in a living will, health care
    proxy, or other advance directive document that is validly
    executed and applied under State law; or
    ``(3) may be unambiguously deduced from the elder's life
    history.

    [[Page 786]]

    ``PART I--NATIONAL COORDINATION OF ELDER JUSTICE ACTIVITIES AND RESEARCH

    ``Subpart A--Elder Justice Coordinating Council and Advisory Board on
    Elder Abuse, Neglect, and Exploitation

    ``SEC. 2021. <> ELDER JUSTICE COORDINATING COUNCIL.

    ``(a) Establishment.--There is established within the Office of the
    Secretary an Elder Justice Coordinating Council (in this section
    referred to as the `Council').
    ``(b) Membership.--
    ``(1) In general.--The Council shall be composed of the
    following members:
    ``(A) The Secretary (or the Secretary's designee).
    ``(B) The Attorney General (or the Attorney
    General's designee).
    ``(C) The head of each Federal department or agency
    or other governmental entity identified by the Chair
    referred to in subsection (d) as having
    responsibilities, or administering programs, relating to
    elder abuse, neglect, and exploitation.
    ``(2) Requirement.--Each member of the Council shall be an
    officer or employee of the Federal Government.

    ``(c) Vacancies.--Any vacancy in the Council shall not affect its
    powers, but shall be filled in the same manner as the original
    appointment was made.
    ``(d) Chair.--The member described in subsection (b)(1)(A) shall be
    Chair of the Council.
    ``(e) Meetings.--The Council shall meet at least 2 times per year,
    as determined by the Chair.
    ``(f) Duties.--
    ``(1) <> In general.--The Council
    shall make recommendations to the Secretary for the coordination
    of activities of the Department of Health and Human Services,
    the Department of Justice, and other relevant Federal, State,
    local, and private agencies and entities, relating to elder
    abuse, neglect, and exploitation and other crimes against
    elders.
    ``(2) Report.--Not later than the date that is 2 years after
    the date of enactment of the Elder Justice Act of 2009 and every
    2 years thereafter, the Council shall submit to the Committee on
    Finance of the Senate and the Committee on Ways and Means and
    the Committee on Energy and Commerce of the House of
    Representatives a report that--
    ``(A) describes the activities and accomplishments
    of, and challenges faced by--
    ``(i) the Council; and
    ``(ii) the entities represented on the
    Council; and
    ``(B) makes such recommendations for legislation,
    model laws, or other action as the Council determines to
    be appropriate.

    ``(g) Powers of the Council.--
    ``(1) Information from federal agencies.--Subject to the
    requirements of section 2012(a), the Council may secure directly
    from any Federal department or agency such information as the
    Council considers necessary to carry out this section. Upon

    [[Page 787]]

    request of the Chair of the Council, the head of such department
    or agency shall furnish such information to the Council.
    ``(2) Postal services.--The Council may use the United
    States mails in the same manner and under the same conditions as
    other departments and agencies of the Federal Government.

    ``(h) Travel Expenses.--The members of the Council shall not receive
    compensation for the performance of services for the Council. The
    members shall be allowed travel expenses, including per diem in lieu of
    subsistence, at rates authorized for employees of agencies under
    subchapter I of chapter 57 of title 5, United States Code, while away
    from their homes or regular places of business in the performance of
    services for the Council. Notwithstanding section 1342 of title 31,
    United States Code, the Secretary may accept the voluntary and
    uncompensated services of the members of the Council.
    ``(i) Detail of Government Employees.--Any Federal Government
    employee may be detailed to the Council without reimbursement, and such
    detail shall be without interruption or loss of civil service status or
    privilege.
    ``(j) Status as Permanent Council.--Section 14 of the Federal
    Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council.
    ``(k) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.

    ``SEC. 2022. <> ADVISORY BOARD ON ELDER ABUSE,
    NEGLECT, AND EXPLOITATION.

    ``(a) Establishment.--There is established a board to be known as
    the `Advisory Board on Elder Abuse, Neglect, and Exploitation' (in this
    section referred to as the `Advisory Board') to create short- and long-
    term multidisciplinary strategic plans for the development of the field
    of elder justice and to make recommendations to the Elder Justice
    Coordinating Council established under section 2021.
    ``(b) Composition.--The Advisory Board shall be composed of 27
    members appointed by the Secretary from among members of the general
    public who are individuals with experience and expertise in elder abuse,
    neglect, and exploitation prevention, detection, treatment,
    intervention, or prosecution.
    ``(c) <> Solicitation
    of Nominations.--The Secretary shall publish a notice in the Federal
    Register soliciting nominations for the appointment of members of the
    Advisory Board under subsection (b).

    ``(d) Terms.--
    ``(1) In general.--Each member of the Advisory Board shall
    be appointed for a term of 3 years, except that, of the members
    first appointed--
    ``(A) 9 shall be appointed for a term of 3 years;
    ``(B) 9 shall be appointed for a term of 2 years;
    and
    ``(C) 9 shall be appointed for a term of 1 year.
    ``(2) Vacancies.--
    ``(A) In general.--Any vacancy on the Advisory Board
    shall not affect its powers, but shall be filled in the
    same manner as the original appointment was made.
    ``(B) Filling unexpired term.--An individual chosen
    to fill a vacancy shall be appointed for the unexpired
    term of the member replaced.

    [[Page 788]]

    ``(3) Expiration of terms.--The term of any member shall not
    expire before the date on which the member's successor takes
    office.

    ``(e) Election of Officers.--The Advisory Board shall elect a Chair
    and Vice Chair from among its members. The Advisory Board shall elect
    its initial Chair and Vice Chair at its initial meeting.
    ``(f) Duties.--
    ``(1) Enhance communication on promoting quality of, and
    preventing abuse, neglect, and exploitation in, long-term
    care.--The Advisory Board shall develop collaborative and
    innovative approaches to improve the quality of, including
    preventing abuse, neglect, and exploitation in, long-term care.
    ``(2) Collaborative efforts to develop consensus around the
    management of certain quality-related factors.--
    ``(A) <> In general.--The Advisory
    Board shall establish multidisciplinary panels to
    address, and develop consensus on, subjects relating to
    improving the quality of long-term care. At least 1 such
    panel shall address, and develop consensus on, methods
    for managing resident-to-resident abuse in long-term
    care.
    ``(B) Activities conducted.--The multidisciplinary
    panels established under subparagraph (A) shall examine
    relevant research and data, identify best practices with
    respect to the subject of the panel, determine the best
    way to carry out those best practices in a practical and
    feasible manner, and determine an effective manner of
    distributing information on such subject.
    ``(3) Report.--Not later than the date that is 18 months
    after the date of enactment of the Elder Justice Act of 2009,
    and annually thereafter, the Advisory Board shall prepare and
    submit to the Elder Justice Coordinating Council, the Committee
    on Finance of the Senate, and the Committee on Ways and Means
    and the Committee on Energy and Commerce of the House of
    Representatives a report containing--
    ``(A) information on the status of Federal, State,
    and local public and private elder justice activities;
    ``(B) recommendations (including recommended
    priorities) regarding--
    ``(i) elder justice programs, research,
    training, services, practice, enforcement, and
    coordination;
    ``(ii) coordination between entities pursuing
    elder justice efforts and those involved in
    related areas that may inform or overlap with
    elder justice efforts, such as activities to
    combat violence against women and child abuse and
    neglect; and
    ``(iii) activities relating to adult fiduciary
    systems, including guardianship and other
    fiduciary arrangements;
    ``(C) recommendations for specific modifications
    needed in Federal and State laws (including regulations)
    or for programs, research, and training to enhance
    prevention, detection, and treatment (including
    diagnosis) of, intervention in (including investigation
    of), and prosecution of elder abuse, neglect, and
    exploitation;

    [[Page 789]]

    ``(D) recommendations on methods for the most
    effective coordinated national data collection with
    respect to elder justice, and elder abuse, neglect, and
    exploitation; and
    ``(E) recommendations for a multidisciplinary
    strategic plan to guide the effective and efficient
    development of the field of elder justice.

    ``(g) Powers of the Advisory Board.--
    ``(1) Information from federal agencies.--Subject to the
    requirements of section 2012(a), the Advisory Board may secure
    directly from any Federal department or agency such information
    as the Advisory Board considers necessary to carry out this
    section. Upon request of the Chair of the Advisory Board, the
    head of such department or agency shall furnish such information
    to the Advisory Board.
    ``(2) Sharing of data and reports.--The Advisory Board may
    request from any entity pursuing elder justice activities under
    the Elder Justice Act of 2009 or an amendment made by that Act,
    any data, reports, or recommendations generated in connection
    with such activities.
    ``(3) Postal services.--The Advisory Board may use the
    United States mails in the same manner and under the same
    conditions as other departments and agencies of the Federal
    Government.

    ``(h) Travel Expenses.--The members of the Advisory Board shall not
    receive compensation for the performance of services for the Advisory
    Board. The members shall be allowed travel expenses for up to 4 meetings
    per year, including per diem in lieu of subsistence, at rates authorized
    for employees of agencies under subchapter I of chapter 57 of title 5,
    United States Code, while away from their homes or regular places of
    business in the performance of services for the Advisory Board.
    Notwithstanding section 1342 of title 31, United States Code, the
    Secretary may accept the voluntary and uncompensated services of the
    members of the Advisory Board.
    ``(i) Detail of Government Employees.--Any Federal Government
    employee may be detailed to the Advisory Board without reimbursement,
    and such detail shall be without interruption or loss of civil service
    status or privilege.
    ``(j) Status as Permanent Advisory Committee.--Section 14 of the
    Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the
    advisory board.
    ``(k) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.

    ``SEC. 2023. <> RESEARCH PROTECTIONS.

    ``(a) Guidelines.--The Secretary shall promulgate guidelines to
    assist researchers working in the area of elder abuse, neglect, and
    exploitation, with issues relating to human subject protections.
    ``(b) Definition of Legally Authorized Representative for
    Application of Regulations.--For purposes of the application of subpart
    A of part 46 of title 45, Code of Federal Regulations, to research
    conducted under this subpart, the term `legally authorized
    representative' means, unless otherwise provided by law, the individual
    or judicial or other body authorized under the applicable law to consent
    to medical treatment on behalf of another person.

    [[Page 790]]

    ``SEC. 2024. <> AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this
    subpart--
    ``(1) for fiscal year 2011, $6,500,000; and
    ``(2) for each of fiscal years 2012 through 2014,
    $7,000,000.

    ``Subpart B--Elder Abuse, Neglect, and Exploitation Forensic Centers

    ``SEC. 2031. <> ESTABLISHMENT AND SUPPORT
    OF ELDER ABUSE, NEGLECT, AND EXPLOITATION FORENSIC CENTERS.

    ``(a) In General.--The Secretary, in consultation with the Attorney
    General, shall make grants to eligible entities to establish and operate
    stationary and mobile forensic centers, to develop forensic expertise
    regarding, and provide services relating to, elder abuse, neglect, and
    exploitation.
    ``(b) Stationary Forensic Centers.--The Secretary shall make 4 of
    the grants described in subsection (a) to institutions of higher
    education with demonstrated expertise in forensics or commitment to
    preventing or treating elder abuse, neglect, or exploitation, to
    establish and operate stationary forensic centers.
    ``(c) Mobile Centers.--The Secretary shall make 6 of the grants
    described in subsection (a) to appropriate entities to establish and
    operate mobile forensic centers.
    ``(d) Authorized Activities.--
    ``(1) Development of forensic markers and methodologies.--An
    eligible entity that receives a grant under this section shall
    use funds made available through the grant to assist in
    determining whether abuse, neglect, or exploitation occurred and
    whether a crime was committed and to conduct research to
    describe and disseminate information on--
    ``(A) forensic markers that indicate a case in which
    elder abuse, neglect, or exploitation may have occurred;
    and
    ``(B) methodologies for determining, in such a case,
    when and how health care, emergency service, social and
    protective services, and legal service providers should
    intervene and when the providers should report the case
    to law enforcement authorities.
    ``(2) Development of forensic expertise.--An eligible entity
    that receives a grant under this section shall use funds made
    available through the grant to develop forensic expertise
    regarding elder abuse, neglect, and exploitation in order to
    provide medical and forensic evaluation, therapeutic
    intervention, victim support and advocacy, case review, and case
    tracking.
    ``(3) Collection of evidence.--The Secretary, in
    coordination with the Attorney General, shall use data made
    available by grant recipients under this section to develop the
    capacity of geriatric health care professionals and law
    enforcement to collect forensic evidence, including collecting
    forensic evidence relating to a potential determination of elder
    abuse, neglect, or exploitation.

    ``(e) Application.--To be eligible to receive a grant under this
    section, an entity shall submit an application to the Secretary

    [[Page 791]]

    at such time, in such manner, and containing such information as the
    Secretary may require.
    ``(f) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section--
    ``(1) for fiscal year 2011, $4,000,000;
    ``(2) for fiscal year 2012, $6,000,000; and
    ``(3) for each of fiscal years 2013 and 2014, $8,000,000.

    ``PART II--PROGRAMS TO PROMOTE ELDER JUSTICE

    ``SEC. 2041. <> ENHANCEMENT OF LONG-TERM CARE.

    ``(a) Grants and Incentives for Long-Term Care Staffing.--
    ``(1) In general.--The Secretary shall carry out activities,
    including activities described in paragraphs (2) and (3), to
    provide incentives for individuals to train for, seek, and
    maintain employment providing direct care in long-term care.
    ``(2) Specific programs to enhance training, recruitment,
    and retention of staff.--
    ``(A) Coordination with secretary of labor to
    recruit and train long-term care staff.--The Secretary
    shall coordinate activities under this subsection with
    the Secretary of Labor in order to provide incentives
    for individuals to train for and seek employment
    providing direct care in long-term care.
    ``(B) <> Career ladders and wage or
    benefit increases to increase staffing in long-term
    care.--
    ``(i) In general.--The Secretary shall make
    grants to eligible entities to carry out programs
    through which the entities--
    ``(I) offer, to employees who
    provide direct care to residents of an
    eligible entity or individuals receiving
    community-based long-term care from an
    eligible entity, continuing training and
    varying levels of certification, based
    on observed clinical care practices and
    the amount of time the employees spend
    providing direct care; and
    ``(II) provide, or make arrangements
    to provide, bonuses or other increased
    compensation or benefits to employees
    who achieve certification under such a
    program.
    ``(ii) Application.--To be eligible to receive
    a grant under this subparagraph, an eligible
    entity shall submit an application to the
    Secretary at such time, in such manner, and
    containing such information as the Secretary may
    require (which may include evidence of
    consultation with the State in which the eligible
    entity is located with respect to carrying out
    activities funded under the grant).
    ``(iii) Authority to limit number of
    applicants.--Nothing in this subparagraph shall be
    construed as prohibiting the Secretary from
    limiting the number of applicants for a grant
    under this subparagraph.
    ``(3) <> Specific programs to improve
    management practices.--

    [[Page 792]]

    ``(A) In general.--The Secretary shall make grants
    to eligible entities to enable the entities to provide
    training and technical assistance.
    ``(B) Authorized activities.--An eligible entity
    that receives a grant under subparagraph (A) shall use
    funds made available through the grant to provide
    training and technical assistance regarding management
    practices using methods that are demonstrated to promote
    retention of individuals who provide direct care, such
    as--
    ``(i) the establishment of standard human
    resource policies that reward high performance,
    including policies that provide for improved wages
    and benefits on the basis of job reviews;
    ``(ii) the establishment of motivational and
    thoughtful work organization practices;
    ``(iii) the creation of a workplace culture
    that respects and values caregivers and their
    needs;
    ``(iv) the promotion of a workplace culture
    that respects the rights of residents of an
    eligible entity or individuals receiving
    community-based long-term care from an eligible
    entity and results in improved care for the
    residents or the individuals; and
    ``(v) the establishment of other programs that
    promote the provision of high quality care, such
    as a continuing education program that provides
    additional hours of training, including on-the-job
    training, for employees who are certified nurse
    aides.
    ``(C) Application.--To be eligible to receive a
    grant under this paragraph, an eligible entity shall
    submit an application to the Secretary at such time, in
    such manner, and containing such information as the
    Secretary may require (which may include evidence of
    consultation with the State in which the eligible entity
    is located with respect to carrying out activities
    funded under the grant).
    ``(D) Authority to limit number of applicants.--
    Nothing in this paragraph shall be construed as
    prohibiting the Secretary from limiting the number of
    applicants for a grant under this paragraph.
    ``(4) Accountability measures.--The Secretary shall develop
    accountability measures to ensure that the activities conducted
    using funds made available under this subsection benefit
    individuals who provide direct care and increase the stability
    of the long-term care workforce.
    ``(5) Definitions.--In this subsection:
    ``(A) Community-based long-term care.--The term
    `community-based long-term care' has the meaning given
    such term by the Secretary.
    ``(B) Eligible entity.--The term `eligible entity'
    means the following:
    ``(i) A long-term care facility.
    ``(ii) A community-based long-term care entity
    (as defined by the Secretary).

    ``(b) Certified EHR Technology Grant Program.--
    ``(1) Grants authorized.--The Secretary is authorized to
    make grants to long-term care facilities for the purpose of
    assisting such entities in offsetting the costs related to
    purchasing, leasing, developing, and implementing certified EHR

    [[Page 793]]

    technology (as defined in section 1848(o)(4)) designed to
    improve patient safety and reduce adverse events and health care
    complications resulting from medication errors.
    ``(2) Use of grant funds.--Funds provided under grants under
    this subsection may be used for any of the following:
    ``(A) Purchasing, leasing, and installing computer
    software and hardware, including handheld computer
    technologies.
    ``(B) Making improvements to existing computer
    software and hardware.
    ``(C) Making upgrades and other improvements to
    existing computer software and hardware to enable e-
    prescribing.
    ``(D) Providing education and training to eligible
    long-term care facility staff on the use of such
    technology to implement the electronic transmission of
    prescription and patient information.
    ``(3) Application.--
    ``(A) In general.--To be eligible to receive a grant
    under this subsection, a long-term care facility shall
    submit an application to the Secretary at such time, in
    such manner, and containing such information as the
    Secretary may require (which may include evidence of
    consultation with the State in which the long-term care
    facility is located with respect to carrying out
    activities funded under the grant).
    ``(B) Authority to limit number of applicants.--
    Nothing in this subsection shall be construed as
    prohibiting the Secretary from limiting the number of
    applicants for a grant under this subsection.
    ``(4) Participation in state health exchanges.--A long-term
    care facility that receives a grant under this subsection shall,
    where available, participate in activities conducted by a State
    or a qualified State-designated entity (as defined in section
    3013(f) of the Public Health Service Act) under a grant under
    section 3013 of the Public Health Service Act to coordinate care
    and for other purposes determined appropriate by the Secretary.
    ``(5) Accountability measures.--The Secretary shall develop
    accountability measures to ensure that the activities conducted
    using funds made available under this subsection help improve
    patient safety and reduce adverse events and health care
    complications resulting from medication errors.

    ``(c) Adoption of Standards for Transactions Involving Clinical Data
    by Long-Term Care Facilities.--
    ``(1) Standards and compatibility.--The Secretary shall
    adopt electronic standards for the exchange of clinical data by
    long-term care facilities, including, where available, standards
    for messaging and nomenclature. Standards adopted by the
    Secretary under the preceding sentence shall be compatible with
    standards established under part C of title XI, standards
    established under subsections (b)(2)(B)(i) and (e)(4) of section
    1860D-4, standards adopted under section 3004 of the Public
    Health Service Act, and general health information technology
    standards.
    ``(2) Electronic submission of data to the secretary.--

    [[Page 794]]

    ``(A) <> In general.--
    Not later than 10 years after the date of enactment of
    the Elder Justice Act of 2009, the Secretary shall have
    procedures in place to accept the optional electronic
    submission of clinical data by long-term care facilities
    pursuant to the standards adopted under paragraph (1).
    ``(B) Rule of construction.--Nothing in this
    subsection shall be construed to require a long-term
    care facility to submit clinical data electronically to
    the Secretary.
    ``(3) Regulations.--The Secretary shall promulgate
    regulations to carry out this subsection. Such regulations shall
    require a State, as a condition of the receipt of funds under
    this part, to conduct such data collection and reporting as the
    Secretary determines are necessary to satisfy the requirements
    of this subsection.

    ``(d) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section--
    ``(1) for fiscal year 2011, $20,000,000;
    ``(2) for fiscal year 2012, $17,500,000; and
    ``(3) for each of fiscal years 2013 and 2014, $15,000,000.

    ``SEC. 2042. <> ADULT PROTECTIVE SERVICES
    FUNCTIONS AND GRANT PROGRAMS.

    ``(a) Secretarial Responsibilities.--
    ``(1) In general.--The Secretary shall ensure that the
    Department of Health and Human Services--
    ``(A) provides funding authorized by this part to
    State and local adult protective services offices that
    investigate reports of the abuse, neglect, and
    exploitation of elders;
    ``(B) collects and disseminates data annually
    relating to the abuse, exploitation, and neglect of
    elders in coordination with the Department of Justice;
    ``(C) develops and disseminates information on best
    practices regarding, and provides training on, carrying
    out adult protective services;
    ``(D) conducts research related to the provision of
    adult protective services; and
    ``(E) provides technical assistance to States and
    other entities that provide or fund the provision of
    adult protective services, including through grants made
    under subsections (b) and (c).
    ``(2) Authorization of appropriations.--There are authorized
    to be appropriated to carry out this subsection, $3,000,000 for
    fiscal year 2011 and $4,000,000 for each of fiscal years 2012
    through 2014.

    ``(b) Grants To Enhance the Provision of Adult Protective
    Services.--
    ``(1) Establishment.--There is established an adult
    protective services grant program under which the Secretary
    shall annually award grants to States in the amounts calculated
    under paragraph (2) for the purposes of enhancing adult
    protective services provided by States and local units of
    government.
    ``(2) Amount of payment.--
    ``(A) In general.--Subject to the availability of
    appropriations and subparagraphs (B) and (C), the amount
    paid to a State for a fiscal year under the program
    under this

    [[Page 795]]

    subsection shall equal the amount appropriated for that
    year to carry out this subsection multiplied by the
    percentage of the total number of elders who reside in
    the United States who reside in that State.
    ``(B) Guaranteed minimum payment amount.--
    ``(i) 50 states.--Subject to clause (ii), if
    the amount determined under subparagraph (A) for a
    State for a fiscal year is less than 0.75 percent
    of the amount appropriated for such year, the
    Secretary shall increase such determined amount so
    that the total amount paid under this subsection
    to the State for the year is equal to 0.75 percent
    of the amount so appropriated.
    ``(ii)
    Territories. <> --In the
    case of a State other than 1 of the 50 States,
    clause (i) shall be applied as if each reference
    to `0.75' were a reference to `0.1'.
    ``(C) Pro rata reductions.--The Secretary shall make
    such pro rata reductions to the amounts described in
    subparagraph (A) as are necessary to comply with the
    requirements of subparagraph (B).
    ``(3) Authorized activities.--
    ``(A) Adult protective services.--Funds made
    available pursuant to this subsection may only be used
    by States and local units of government to provide adult
    protective services and may not be used for any other
    purpose.
    ``(B) Use by agency.--Each State receiving funds
    pursuant to this subsection shall provide such funds to
    the agency or unit of State government having legal
    responsibility for providing adult protective services
    within the State.
    ``(C) Supplement not supplant.--Each State or local
    unit of government shall use funds made available
    pursuant to this subsection to supplement and not
    supplant other Federal, State, and local public funds
    expended to provide adult protective services in the
    State.
    ``(4) State reports.--Each State receiving funds under this
    subsection shall submit to the Secretary, at such time and in
    such manner as the Secretary may require, a report on the number
    of elders served by the grants awarded under this subsection.
    ``(5) Authorization of appropriations.--There are authorized
    to be appropriated to carry out this subsection, $100,000,000
    for each of fiscal years 2011 through 2014.

    ``(c) State Demonstration Programs.--
    ``(1) Establishment.--The Secretary shall award grants to
    States for the purposes of conducting demonstration programs in
    accordance with paragraph (2).
    ``(2) Demonstration programs.--Funds made available pursuant
    to this subsection may be used by States and local units of
    government to conduct demonstration programs that test--
    ``(A) training modules developed for the purpose of
    detecting or preventing elder abuse;
    ``(B) methods to detect or prevent financial
    exploitation of elders;
    ``(C) methods to detect elder abuse;

    [[Page 796]]

    ``(D) whether training on elder abuse forensics
    enhances the detection of elder abuse by employees of
    the State or local unit of government; or
    ``(E) other matters relating to the detection or
    prevention of elder abuse.
    ``(3) Application.--To be eligible to receive a grant under
    this subsection, a State shall submit an application to the
    Secretary at such time, in such manner, and containing such
    information as the Secretary may require.
    ``(4) State reports.--Each State that receives funds under
    this subsection shall submit to the Secretary a report at such
    time, in such manner, and containing such information as the
    Secretary may require on the results of the demonstration
    program conducted by the State using funds made available under
    this subsection.
    ``(5) Authorization of appropriations.--There are authorized
    to be appropriated to carry out this subsection, $25,000,000 for
    each of fiscal years 2011 through 2014.

    ``SEC. 2043. <> LONG-TERM CARE OMBUDSMAN PROGRAM
    GRANTS AND TRAINING.

    ``(a) Grants To Support the Long-Term Care Ombudsman Program.--
    ``(1) In general.--The Secretary shall make grants to
    eligible entities with relevant expertise and experience in
    abuse and neglect in long-term care facilities or long-term care
    ombudsman programs and responsibilities, for the purpose of--
    ``(A) improving the capacity of State long-term care
    ombudsman programs to respond to and resolve complaints
    about abuse and neglect;
    ``(B) conducting pilot programs with State long-term
    care ombudsman offices or local ombudsman entities; and
    ``(C) providing support for such State long-term
    care ombudsman programs and such pilot programs (such as
    through the establishment of a national long-term care
    ombudsman resource center).
    ``(2) Authorization of appropriations.--There are authorized
    to be appropriated to carry out this subsection--
    ``(A) for fiscal year 2011, $5,000,000;
    ``(B) for fiscal year 2012, $7,500,000; and
    ``(C) for each of fiscal years 2013 and 2014,
    $10,000,000.

    ``(b) Ombudsman Training Programs.--
    ``(1) In general.--The Secretary shall establish programs to
    provide and improve ombudsman training with respect to elder
    abuse, neglect, and exploitation for national organizations and
    State long-term care ombudsman programs.
    ``(2) Authorization of appropriations.--There are authorized
    to be appropriated to carry out this subsection, for each of
    fiscal years 2011 through 2014, $10,000,000.

    ``SEC. 2044. <> PROVISION OF INFORMATION
    REGARDING, AND EVALUATIONS OF, ELDER JUSTICE PROGRAMS.

    ``(a) Provision of Information.--To be eligible to receive a grant
    under this part, an applicant shall agree--
    ``(1) except as provided in paragraph (2), to provide the
    eligible entity conducting an evaluation under subsection (b) of
    the activities funded through the grant with such information

    [[Page 797]]

    as the eligible entity may require in order to conduct such
    evaluation; or
    ``(2) in the case of an applicant for a grant under section
    2041(b), to provide the Secretary with such information as the
    Secretary may require to conduct an evaluation or audit under
    subsection (c).

    ``(b) Use of Eligible Entities To Conduct Evaluations.--
    ``(1) Evaluations required.--Except as provided in paragraph
    (2), the Secretary shall--
    ``(A) reserve a portion (not less than 2 percent) of
    the funds appropriated with respect to each program
    carried out under this part; and
    ``(B) use the funds reserved under subparagraph (A)
    to provide assistance to eligible entities to conduct
    evaluations of the activities funded under each program
    carried out under this part.
    ``(2) Certified ehr technology grant program not included.--
    The provisions of this subsection shall not apply to the
    certified EHR technology grant program under section 2041(b).
    ``(3) Authorized activities.--A recipient of assistance
    described in paragraph (1)(B) shall use the funds made available
    through the assistance to conduct a validated evaluation of the
    effectiveness of the activities funded under a program carried
    out under this part.
    ``(4) Applications.--To be eligible to receive assistance
    under paragraph (1)(B), an entity shall submit an application to
    the Secretary at such time, in such manner, and containing such
    information as the Secretary may require, including a proposal
    for the evaluation.
    ``(5) Reports.--Not later than a date specified by the
    Secretary, an eligible entity receiving assistance under
    paragraph (1)(B) shall submit to the Secretary, the Committee on
    Ways and Means and the Committee on Energy and Commerce of the
    House of Representatives, and the Committee on Finance of the
    Senate a report containing the results of the evaluation
    conducted using such assistance together with such
    recommendations as the entity determines to be appropriate.

    ``(c) Evaluations and Audits of Certified EHR Technology Grant
    Program by the Secretary.--
    ``(1) Evaluations.--The Secretary shall conduct an
    evaluation of the activities funded under the certified EHR
    technology grant program under section 2041(b). Such evaluation
    shall include an evaluation of whether the funding provided
    under the grant is expended only for the purposes for which it
    is made.
    ``(2) Audits.--The Secretary shall conduct appropriate
    audits of grants made under section 2041(b).

    ``SEC. 2045. <> REPORT.

    ``Not later than October 1, 2014, the Secretary shall submit to the
    Elder Justice Coordinating Council established under section 2021, the
    Committee on Ways and Means and the Committee on Energy and Commerce of
    the House of Representatives, and the Committee on Finance of the Senate
    a report--

    [[Page 798]]

    ``(1) compiling, summarizing, and analyzing the information
    contained in the State reports submitted under subsections
    (b)(4) and (c)(4) of section 2042; and
    ``(2) containing such recommendations for legislative or
    administrative action as the Secretary determines to be
    appropriate.

    ``SEC. 2046. <> RULE OF CONSTRUCTION.

    ``Nothing in this subtitle shall be construed as--
    ``(1) limiting any cause of action or other relief related
    to obligations under this subtitle that is available under the
    law of any State, or political subdivision thereof; or
    ``(2) creating a private cause of action for a violation of
    this subtitle.''.
    (2) Option for state plan under program for temporary
    assistance for needy families.--
    (A) In general.--Section 402(a)(1)(B) of the Social
    Security Act (42 U.S.C. 602(a)(1)(B)) is amended by
    adding at the end the following new clause:
    ``(v) The document shall indicate whether the
    State intends to assist individuals to train for,
    seek, and maintain employment--
    ``(I) providing direct care in a
    long-term care facility (as such terms
    are defined under section 2011); or
    ``(II) in other occupations related
    to elder care determined appropriate by
    the State for which the State identifies
    an unmet need for service personnel,
    and, if so, shall include an overview of such
    assistance.''.
    (B) <> Effective date.--The
    amendment made by subparagraph (A) shall take effect on
    January 1, 2011.

    (b) <> Protecting Residents of Long-Term
    Care Facilities.--
    (1) National training institute for surveyors.--
    (A) In general. <> --The Secretary
    of Health and Human Services shall enter into a contract
    with an entity for the purpose of establishing and
    operating a National Training Institute for Federal and
    State surveyors. Such Institute shall provide and
    improve the training of surveyors with respect to
    investigating allegations of abuse, neglect, and
    misappropriation of property in programs and long-term
    care facilities that receive payments under title XVIII
    or XIX of the Social Security Act.
    (B) Activities carried out by the institute.--The
    contract entered into under subparagraph (A) shall
    require the Institute established and operated under
    such contract to carry out the following activities:
    (i) Assess the extent to which State agencies
    use specialized surveyors for the investigation of
    reported allegations of abuse, neglect, and
    misappropriation of property in such programs and
    long-term care facilities.
    (ii) Evaluate how the competencies of
    surveyors may be improved to more effectively
    investigate reported allegations of such abuse,
    neglect, and misappropriation of property, and
    provide feedback to Federal and State agencies on
    the evaluations conducted.

    [[Page 799]]

    (iii) Provide a national program of training,
    tools, and technical assistance to Federal and
    State surveyors on investigating reports of such
    abuse, neglect, and misappropriation of property.
    (iv) Develop and disseminate information on
    best practices for the investigation of such
    abuse, neglect, and misappropriation of property.
    (v) Assess the performance of State complaint
    intake systems, in order to ensure that the intake
    of complaints occurs 24 hours per day, 7 days a
    week (including holidays).
    (vi) To the extent approved by the Secretary
    of Health and Human Services, provide a national
    24 hours per day, 7 days a week (including
    holidays), back-up system to State complaint
    intake systems in order to ensure optimum national
    responsiveness to complaints of such abuse,
    neglect, and misappropriation of property.
    (vii) Analyze and report annually on the
    following:
    (I) The total number and sources of
    complaints of such abuse, neglect, and
    misappropriation of property.
    (II) The extent to which such
    complaints are referred to law
    enforcement agencies.
    (III) General results of Federal and
    State investigations of such complaints.
    (viii) Conduct a national study of the cost to
    State agencies of conducting complaint
    investigations of skilled nursing facilities and
    nursing facilities under sections 1819 and 1919,
    respectively, of the Social Security Act (42
    U.S.C. 1395i-3; 1396r), and making recommendations
    to the Secretary of Health and Human Services with
    respect to options to increase the efficiency and
    cost-effectiveness of such investigations.
    (C) Authorization.--There are authorized to be
    appropriated to carry out this paragraph, for the period
    of fiscal years 2011 through 2014, $12,000,000.
    (2) Grants to state survey agencies.--
    (A) In general.--The Secretary of Health and Human
    Services shall make grants to State agencies that
    perform surveys of skilled nursing facilities or nursing
    facilities under sections 1819 or 1919, respectively, of
    the Social Security Act (42 U.S.C. 1395i-3; 1395r).
    (B) Use of funds.--A grant awarded under
    subparagraph (A) shall be used for the purpose of
    designing and implementing complaint investigations
    systems that--
    (i) promptly prioritize complaints in order to
    ensure a rapid response to the most serious and
    urgent complaints;
    (ii) respond to complaints with optimum
    effectiveness and timeliness; and
    (iii) optimize the collaboration between local
    authorities, consumers, and providers, including--
    (I) such State agency;
    (II) the State Long-Term Care
    Ombudsman;
    (III) local law enforcement
    agencies;
    (IV) advocacy and consumer
    organizations;

    [[Page 800]]

    (V) State aging units;
    (VI) Area Agencies on Aging; and
    (VII) other appropriate entities.
    (C) Authorization.--There are authorized to be
    appropriated to carry out this paragraph, for each of
    fiscal years 2011 through 2014, $5,000,000.
    (3) Reporting of crimes in federally funded long-term care
    facilities.--Part A of title XI of the Social Security Act (42
    U.S.C. 1301 et seq.), as amended by section 6005, is amended by
    inserting after section 1150A the following new section:

    ``reporting to law enforcement of crimes occurring in federally funded
    long-term care facilities

    ``Sec. 1150B.  <> (a) Determination and
    Notification.--
    ``(1) Determination.--The owner or operator of each long-
    term care facility that receives Federal funds under this Act
    shall annually determine whether the facility received at least
    $10,000 in such Federal funds during the preceding year.
    ``(2) Notification.--If the owner or operator determines
    under paragraph (1) that the facility received at least $10,000
    in such Federal funds during the preceding year, such owner or
    operator shall annually notify each covered individual (as
    defined in paragraph (3)) of that individual's obligation to
    comply with the reporting requirements described in subsection
    (b).
    ``(3) Covered individual defined.--In this section, the term
    `covered individual' means each individual who is an owner,
    operator, employee, manager, agent, or contractor of a long-term
    care facility that is the subject of a determination described
    in paragraph (1).

    ``(b) Reporting Requirements.--
    ``(1) In general.--Each covered individual shall report to
    the Secretary and 1 or more law enforcement entities for the
    political subdivision in which the facility is located any
    reasonable suspicion of a crime (as defined by the law of the
    applicable political subdivision) against any individual who is
    a resident of, or is receiving care from, the facility.
    ``(2) Timing.--If the events that cause the suspicion--
    ``(A) result in serious bodily injury, the
    individual shall report the suspicion immediately, but
    not later than 2 hours after forming the suspicion; and
    ``(B) do not result in serious bodily injury, the
    individual shall report the suspicion not later than 24
    hours after forming the suspicion.

    ``(c) Penalties.--
    ``(1) In general.--If a covered individual violates
    subsection (b)--
    ``(A) the covered individual shall be subject to a
    civil money penalty of not more than $200,000; and
    ``(B) the Secretary may make a determination in the
    same proceeding to exclude the covered individual from
    participation in any Federal health care program (as
    defined in section 1128B(f)).
    ``(2) Increased harm.--If a covered individual violates
    subsection (b) and the violation exacerbates the harm to the
    victim of the crime or results in harm to another individual--

    [[Page 801]]

    ``(A) the covered individual shall be subject to a
    civil money penalty of not more than $300,000; and
    ``(B) the Secretary may make a determination in the
    same proceeding to exclude the covered individual from
    participation in any Federal health care program (as
    defined in section 1128B(f)).
    ``(3) Excluded individual.--During any period for which a
    covered individual is classified as an excluded individual under
    paragraph (1)(B) or (2)(B), a long-term care facility that
    employs such individual shall be ineligible to receive Federal
    funds under this Act.
    ``(4) Extenuating circumstances.--
    ``(A) In general.--The Secretary may take into
    account the financial burden on providers with
    underserved populations in determining any penalty to be
    imposed under this subsection.
    ``(B) Underserved population defined.--In this
    paragraph, the term `underserved population' means the
    population of an area designated by the Secretary as an
    area with a shortage of elder justice programs or a
    population group designated by the Secretary as having a
    shortage of such programs. Such areas or groups
    designated by the Secretary may include--
    ``(i) areas or groups that are geographically
    isolated (such as isolated in a rural area);
    ``(ii) racial and ethnic minority populations;
    and
    ``(iii) populations underserved because of
    special needs (such as language barriers,
    disabilities, alien status, or age).

    ``(d) Additional Penalties for Retaliation.--
    ``(1) In general.--A long-term care facility may not--
    ``(A) discharge, demote, suspend, threaten, harass,
    or deny a promotion or other employment-related benefit
    to an employee, or in any other manner discriminate
    against an employee in the terms and conditions of
    employment because of lawful acts done by the employee;
    or
    ``(B) file a complaint or a report against a nurse
    or other employee with the appropriate State
    professional disciplinary agency because of lawful acts
    done by the nurse or employee,
    for making a report, causing a report to be made, or for taking
    steps in furtherance of making a report pursuant to subsection
    (b)(1).
    ``(2) Penalties for retaliation.--If a long-term care
    facility violates subparagraph (A) or (B) of paragraph (1) the
    facility shall be subject to a civil money penalty of not more
    than $200,000 or the Secretary may classify the entity as an
    excluded entity for a period of 2 years pursuant to section
    1128(b), or both.
    ``(3) Requirement to post notice.--Each long-term care
    facility shall post conspicuously in an appropriate location a
    sign (in a form specified by the Secretary) specifying the
    rights of employees under this section. Such sign shall include
    a statement that an employee may file a complaint with the
    Secretary against a long-term care facility that violates the
    provisions of this subsection and information with respect to
    the manner of filing such a complaint.

    [[Page 802]]

    ``(e) Procedure. <> --The provisions of
    section 1128A (other than subsections (a) and (b) and the second
    sentence of subsection (f)) shall apply to a civil money penalty or
    exclusion under this section in the same manner as such provisions apply
    to a penalty or proceeding under section 1128A(a).

    ``(f) Definitions.--In this section, the terms `elder justice',
    `long-term care facility', and `law enforcement' have the meanings given
    those terms in section 2011.''.
    (c) National Nurse Aide Registry.--
    (1) Definition of nurse aide.--In this subsection, the term
    ``nurse aide'' has the meaning given that term in sections
    1819(b)(5)(F) and 1919(b)(5)(F) of the Social Security Act (42
    U.S.C. 1395i-3(b)(5)(F); 1396r(b)(5)(F)).
    (2) Study and report.--
    (A) In general.--The Secretary, in consultation with
    appropriate government agencies and private sector
    organizations, shall conduct a study on establishing a
    national nurse aide registry.
    (B) Areas evaluated.--The study conducted under this
    subsection shall include an evaluation of--
    (i) who should be included in the registry;
    (ii) how such a registry would comply with
    Federal and State privacy laws and regulations;
    (iii) how data would be collected for the
    registry;
    (iv) what entities and individuals would have
    access to the data collected;
    (v) how the registry would provide appropriate
    information regarding violations of Federal and
    State law by individuals included in the registry;
    (vi) how the functions of a national nurse
    aide registry would be coordinated with the
    nationwide program for national and State
    background checks on direct patient access
    employees of long-term care facilities and
    providers under section 4301; and
    (vii) how the information included in State
    nurse aide registries developed and maintained
    under sections 1819(e)(2) and 1919(e)(2) of the
    Social Security Act (42 U.S.C. 1395i-3(e)(2);
    1396r(e)(2)(2)) would be provided as part of a
    national nurse aide registry.
    (C) Considerations.--In conducting the study and
    preparing the report required under this subsection, the
    Secretary shall take into consideration the findings and
    conclusions of relevant reports and other relevant
    resources, including the following:
    (i) The Department of Health and Human
    Services Office of Inspector General Report, Nurse
    Aide Registries: State Compliance and Practices
    (February 2005).
    (ii) The General Accounting Office (now known
    as the Government Accountability Office) Report,
    Nursing Homes: More Can Be Done to Protect
    Residents from Abuse (March 2002).
    (iii) The Department of Health and Human
    Services Office of the Inspector General Report,
    Nurse Aide Registries: Long-Term Care Facility
    Compliance and Practices (July 2005).

    [[Page 803]]

    (iv) The Department of Health and Human
    Services Health Resources and Services
    Administration Report, Nursing Aides, Home Health
    Aides, and Related Health Care Occupations--
    National and Local Workforce Shortages and
    Associated Data Needs (2004) (in particular with
    respect to chapter 7 and appendix F).
    (v) The 2001 Report to CMS from the School of
    Rural Public Health, Texas A&M University,
    Preventing Abuse and Neglect in Nursing Homes: The
    Role of Nurse Aide Registries.
    (vi) Information included in State nurse aide
    registries developed and maintained under sections
    1819(e)(2) and 1919(e)(2) of the Social Security
    Act (42 U.S.C. 1395i-3(e)(2); 1396r(e)(2)(2)).
    (D) Report.--Not later than 18 months after the date
    of enactment of this Act, the Secretary shall submit to
    the Elder Justice Coordinating Council established under
    section 2021 of the Social Security Act, as added by
    section 1805(a), the Committee on Finance of the Senate,
    and the Committee on Ways and Means and the Committee on
    Energy and Commerce of the House of Representatives a
    report containing the findings and recommendations of
    the study conducted under this paragraph.
    (E) Funding limitation.--Funding for the study
    conducted under this subsection shall not exceed
    $500,000.
    (3) Congressional action.--After receiving the report
    submitted by the Secretary under paragraph (2)(D), the Committee
    on Finance of the Senate and the Committee on Ways and Means and
    the Committee on Energy and Commerce of the House of
    Representatives shall, as they deem appropriate, take action
    based on the recommendations contained in the report.
    (4) Authorization of appropriations.--There are authorized
    to be appropriated such sums as are necessary for the purpose of
    carrying out this subsection.

    (d) Conforming Amendments.--
    (1) Title xx.--Title XX of the Social Security Act (42
    U.S.C. 1397 et seq.), as amended by section 6703(a), is
    amended--
    (A) in the heading of section 2001, <> by striking ``title'' and inserting
    ``subtitle''; and
    (B) in subtitle 1, <> by striking ``this title'' each
    place it appears and inserting ``this subtitle''.
    (2) Title iv.--Title IV of the Social Security Act (42
    U.S.C. 601 et seq.) is amended--
    (A) in section 404(d) <> --
    (i) in paragraphs (1)(A), (2)(A), and (3)(B),
    by inserting ``subtitle 1 of'' before ``title XX''
    each place it appears;
    (ii) in the heading of paragraph (2), by
    inserting ``subtitle 1 of'' before ``title xx'';
    and
    (iii) in the heading of paragraph (3)(B), by
    inserting ``subtitle 1 of'' before ``title xx'';
    and
    (B) in sections 422(b), 471(a)(4), 472(h)(1), and
    473(b)(2), <> by inserting
    ``subtitle 1 of'' before ``title XX'' each place it
    appears.

    [[Page 804]]

    (3) Title xi.--Title XI of the Social Security Act (42
    U.S.C. 1301 et seq.) is amended--
    (A) in section 1128(h)(3) <> --
    (i) by inserting ``subtitle 1 of'' before
    ``title XX''; and
    (ii) by striking ``such title'' and inserting
    ``such subtitle''; and
    (B) in section 1128A(i)(1), <> by inserting ``subtitle 1 of'' before ``title
    XX''.

    Subtitle I--Sense of the Senate Regarding Medical Malpractice

    SEC. 6801. SENSE OF THE SENATE REGARDING MEDICAL MALPRACTICE.

    It is the sense of the Senate that--
    (1) health care reform presents an opportunity to address
    issues related to medical malpractice and medical liability
    insurance;
    (2) States should be encouraged to develop and test
    alternatives to the existing civil litigation system as a way of
    improving patient safety, reducing medical errors, encouraging
    the efficient resolution of disputes, increasing the
    availability of prompt and fair resolution of disputes, and
    improving access to liability insurance, while preserving an
    individual's right to seek redress in court; and
    (3) Congress should consider establishing a State
    demonstration program to evaluate alternatives to the existing
    civil litigation system with respect to the resolution of
    medical malpractice claims.

    TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES

    Subtitle A <> --Biologics Price Competition and Innovation

    SEC. 7001. <> SHORT TITLE.

    (a) In General.--This subtitle may be cited as the ``Biologics Price
    Competition and Innovation Act of 2009''.
    (b) Sense of the Senate.--It is the sense of the Senate that a
    biosimilars pathway balancing innovation and consumer interests should
    be established.

    SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

    (a) Licensure of Biological Products as Biosimilar or
    Interchangeable.--Section 351 of the Public Health Service Act (42
    U.S.C. 262) is amended--
    (1) in subsection (a)(1)(A), by inserting ``under this
    subsection or subsection (k)'' after ``biologics license''; and
    (2) by adding at the end the following:

    [[Page 805]]

    ``(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

    [[Page 806]]

    ``(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

    [[Page 807]]

    such authority applies to biological products licensed
    under subsection (a).
    ``(6) Exclusivity for first interchangeable biological
    product.--Upon review of an application submitted under this
    subsection relying on the same reference product for which a
    prior biological product has received a determination of
    interchangeability for any condition of use, the Secretary shall
    not make a determination under paragraph (4) that the second or
    subsequent biological product is interchangeable for any
    condition of use until the earlier of--
    ``(A) 1 year after the first commercial marketing of
    the first interchangeable biosimilar biological product
    to be approved as interchangeable for that reference
    product;
    ``(B) 18 months after--
    ``(i) a final court decision on all patents in
    suit in an action instituted under subsection
    (l)(6) against the applicant that submitted the
    application for the first approved interchangeable
    biosimilar biological product; or
    ``(ii) the dismissal with or without prejudice
    of an action instituted under subsection (l)(6)
    against the applicant that submitted the
    application for the first approved interchangeable
    biosimilar biological product; or
    ``(C)(i) 42 months after approval of the first
    interchangeable biosimilar biological product if the
    applicant that submitted such application has been sued
    under subsection (l)(6) and such litigation is still
    ongoing within such 42-month period; or
    ``(ii) 18 months after approval of the first
    interchangeable biosimilar biological product if the
    applicant that submitted such application has not been
    sued under subsection (l)(6).
    <> For purposes of this paragraph, the term
    `final court decision' means a final decision of a court from
    which no appeal (other than a petition to the United States
    Supreme Court for a writ of certiorari) has been or can be
    taken.
    ``(7) Exclusivity for reference product.--
    ``(A) Effective date of biosimilar application
    approval.--Approval of an application under this
    subsection may not be made effective by the Secretary
    until the date that is 12 years after the date on which
    the reference product was first licensed under
    subsection (a).
    ``(B) Filing period.--An application under this
    subsection may not be submitted to the Secretary until
    the date that is 4 years after the date on which the
    reference product was first licensed under subsection
    (a).
    ``(C) First licensure.--Subparagraphs (A) and (B)
    shall not apply to a license for or approval of--
    ``(i) a supplement for the biological product
    that is the reference product; or
    ``(ii) a subsequent application filed by the
    same sponsor or manufacturer of the biological
    product that is the reference product (or a
    licensor, predecessor in interest, or other
    related entity) for--
    ``(I) a change (not including a
    modification to the structure of the
    biological product) that results

    [[Page 808]]

    in a new indication, route of
    administration, dosing schedule, dosage
    form, delivery system, delivery device,
    or strength; or
    ``(II) a modification to the
    structure of the biological product that
    does not result in a change in safety,
    purity, or potency.
    ``(8) Guidance documents.--
    ``(A) In general.--The Secretary may, after
    opportunity for public comment, issue guidance in
    accordance, except as provided in subparagraph (B)(i),
    with section 701(h) of the Federal Food, Drug, and
    Cosmetic Act with respect to the licensure of a
    biological product under this subsection. Any such
    guidance may be general or specific.
    ``(B) Public comment.--
    ``(i) In general.--The Secretary shall provide
    the public an opportunity to comment on any
    proposed guidance issued under subparagraph (A)
    before issuing final guidance.
    ``(ii) Input regarding most valuable
    guidance.--The Secretary shall establish a process
    through which the public may provide the Secretary
    with input regarding priorities for issuing
    guidance.
    ``(C) No requirement for application
    consideration.--The issuance (or non-issuance) of
    guidance under subparagraph (A) shall not preclude the
    review of, or action on, an application submitted under
    this subsection.
    ``(D) Requirement for product class-specific
    guidance.--If the Secretary issues product class-
    specific guidance under subparagraph (A), such guidance
    shall include a description of--
    <> ``(i) the criteria that
    the Secretary will use to determine whether a
    biological product is highly similar to a
    reference product in such product class; and
    ``(ii) the criteria, if available, that the
    Secretary will use to determine whether a
    biological product meets the standards described
    in paragraph (4).
    ``(E) Certain product classes.--
    ``(i) Guidance.--The Secretary may indicate in
    a guidance document that the science and
    experience, as of the date of such guidance, with
    respect to a product or product class (not
    including any recombinant protein) does not allow
    approval of an application for a license as
    provided under this subsection for such product or
    product class.
    ``(ii) Modification or reversal.--The
    Secretary may issue a subsequent guidance document
    under subparagraph (A) to modify or reverse a
    guidance document under clause (i).
    ``(iii) No effect on ability to deny
    license.--Clause (i) shall not be construed to
    require the Secretary to approve a product with
    respect to which the Secretary has not indicated
    in a guidance document that the science and
    experience, as described in clause (i), does not
    allow approval of such an application.

    ``(l) Patents.--
    ``(1) Confidential access to subsection (k) application.--

    [[Page 809]]

    ``(A) Application of paragraph.--Unless otherwise
    agreed to by a person that submits an application under
    subsection (k) (referred to in this subsection as the
    `subsection (k) applicant') and the sponsor of the
    application for the reference product (referred to in
    this subsection as the `reference product sponsor'), the
    provisions of this paragraph shall apply to the exchange
    of information described in this subsection.
    ``(B) In general.--
    ``(i) Provision of confidential information.--
    When a subsection (k) applicant submits an
    application under subsection (k), such applicant
    shall provide to the persons described in clause
    (ii), subject to the terms of this paragraph,
    confidential access to the information required to
    be produced pursuant to paragraph (2) and any
    other information that the subsection (k)
    applicant determines, in its sole discretion, to
    be appropriate (referred to in this subsection as
    the `confidential information').
    ``(ii) Recipients of information.--The persons
    described in this clause are the following:
    ``(I) Outside counsel.--One or more
    attorneys designated by the reference
    product sponsor who are employees of an
    entity other than the reference product
    sponsor (referred to in this paragraph
    as the `outside counsel'), provided that
    such attorneys do not engage, formally
    or informally, in patent prosecution
    relevant or related to the reference
    product.
    ``(II) In-house counsel.--One
    attorney that represents the reference
    product sponsor who is an employee of
    the reference product sponsor, provided
    that such attorney does not engage,
    formally or informally, in patent
    prosecution relevant or related to the
    reference product.
    ``(iii) Patent owner access.--A representative
    of the owner of a patent exclusively licensed to a
    reference product sponsor with respect to the
    reference product and who has retained a right to
    assert the patent or participate in litigation
    concerning the patent may be provided the
    confidential information, provided that the
    representative informs the reference product
    sponsor and the subsection (k) applicant of his or
    her agreement to be subject to the confidentiality
    provisions set forth in this paragraph, including
    those under clause (ii).
    ``(C) Limitation on disclosure.--No person that
    receives confidential information pursuant to
    subparagraph (B) shall disclose any confidential
    information to any other person or entity, including the
    reference product sponsor employees, outside scientific
    consultants, or other outside counsel retained by the
    reference product sponsor, without the prior written
    consent of the subsection (k) applicant, which shall not
    be unreasonably withheld.
    ``(D) Use of confidential information.--Confidential
    information shall be used for the sole and exclusive
    purpose of determining, with respect to each patent
    assigned to

    [[Page 810]]

    or exclusively licensed by the reference product
    sponsor, whether a claim of patent infringement could
    reasonably be asserted if the subsection (k) applicant
    engaged in the manufacture, use, offering for sale,
    sale, or importation into the United States of the
    biological product that is the subject of the
    application under subsection (k).
    ``(E) Ownership of confidential information.--The
    confidential information disclosed under this paragraph
    is, and shall remain, the property of the subsection (k)
    applicant. By providing the confidential information
    pursuant to this paragraph, the subsection (k) applicant
    does not provide the reference product sponsor or the
    outside counsel any interest in or license to use the
    confidential information, for purposes other than those
    specified in subparagraph (D).
    ``(F) Effect of infringement action.--In the event
    that the reference product sponsor files a patent
    infringement suit, the use of confidential information
    shall continue to be governed by the terms of this
    paragraph until such time as a court enters a protective
    order regarding the information. Upon entry of such
    order, the subsection (k) applicant may redesignate
    confidential information in accordance with the terms of
    that order. No confidential information shall be
    included in any publicly-available complaint or other
    pleading. In the event that the reference product
    sponsor does not file an infringement action by the date
    specified in paragraph (6), the reference product
    sponsor shall return or destroy all confidential
    information received under this paragraph, provided that
    if the reference product sponsor opts to destroy such
    information, it will confirm destruction in writing to
    the subsection (k) applicant.
    ``(G) Rule of construction.--Nothing in this
    paragraph shall be construed--
    ``(i) as an admission by the subsection (k)
    applicant regarding the validity, enforceability,
    or infringement of any patent; or
    ``(ii) as an agreement or admission by the
    subsection (k) applicant with respect to the
    competency, relevance, or materiality of any
    confidential information.
    ``(H) Effect of violation.--The disclosure of any
    confidential information in violation of this paragraph
    shall be deemed to cause the subsection (k) applicant to
    suffer irreparable harm for which there is no adequate
    legal remedy and the court shall consider immediate
    injunctive relief to be an appropriate and necessary
    remedy for any violation or threatened violation of this
    paragraph.
    ``(2) Subsection (k) application information.--
    <> Not later than 20 days after
    the Secretary notifies the subsection (k) applicant that the
    application has been accepted for review, the subsection (k)
    applicant--
    ``(A) shall provide to the reference product sponsor
    a copy of the application submitted to the Secretary
    under subsection (k), and such other information that
    describes the process or processes used to manufacture
    the biological product that is the subject of such
    application; and

    [[Page 811]]

    ``(B) may provide to the reference product sponsor
    additional information requested by or on behalf of the
    reference product sponsor.
    ``(3) <> List and description of
    patents.--
    ``(A) List by reference product sponsor.--Not later
    than 60 days after the receipt of the application and
    information under paragraph (2), the reference product
    sponsor shall provide to the subsection (k) applicant--
    ``(i) a list of patents for which the
    reference product sponsor believes a claim of
    patent infringement could reasonably be asserted
    by the reference product sponsor, or by a patent
    owner that has granted an exclusive license to the
    reference product sponsor with respect to the
    reference product, if a person not licensed by the
    reference product sponsor engaged in the making,
    using, offering to sell, selling, or importing
    into the United States of the biological product
    that is the subject of the subsection (k)
    application; and
    ``(ii) an identification of the patents on
    such list that the reference product sponsor would
    be prepared to license to the subsection (k)
    applicant.
    ``(B) List and description by subsection (k)
    applicant.--Not later than 60 days after receipt of the
    list under subparagraph (A), the subsection (k)
    applicant--
    ``(i) may provide to the reference product
    sponsor a list of patents to which the subsection
    (k) applicant believes a claim of patent
    infringement could reasonably be asserted by the
    reference product sponsor if a person not licensed
    by the reference product sponsor engaged in the
    making, using, offering to sell, selling, or
    importing into the United States of the biological
    product that is the subject of the subsection (k)
    application;
    ``(ii) shall provide to the reference product
    sponsor, with respect to each patent listed by the
    reference product sponsor under subparagraph (A)
    or listed by the subsection (k) applicant under
    clause (i)--
    ``(I) a detailed statement that
    describes, on a claim by claim basis,
    the factual and legal basis of the
    opinion of the subsection (k) applicant
    that such patent is invalid,
    unenforceable, or will not be infringed
    by the commercial marketing of the
    biological product that is the subject
    of the subsection (k) application; or
    ``(II) a statement that the
    subsection (k) applicant does not intend
    to begin commercial marketing of the
    biological product before the date that
    such patent expires; and
    ``(iii) shall provide to the reference product
    sponsor a response regarding each patent
    identified by the reference product sponsor under
    subparagraph (A)(ii).
    ``(C) Description by reference product sponsor.--Not
    later than 60 days after receipt of the list and
    statement under subparagraph (B), the reference product
    sponsor shall provide to the subsection (k) applicant a
    detailed statement that describes, with respect to each
    patent described in subparagraph (B)(ii)(I), on a claim
    by

    [[Page 812]]

    claim basis, the factual and legal basis of the opinion
    of the reference product sponsor that such patent will
    be infringed by the commercial marketing of the
    biological product that is the subject of the subsection
    (k) application and a response to the statement
    concerning validity and enforceability provided under
    subparagraph (B)(ii)(I).
    ``(4) Patent resolution negotiations.--
    ``(A) In general.--After receipt by the subsection
    (k) applicant of the statement under paragraph (3)(C),
    the reference product sponsor and the subsection (k)
    applicant shall engage in good faith negotiations to
    agree on which, if any, patents listed under paragraph
    (3) by the subsection (k) applicant or the reference
    product sponsor shall be the subject of an action for
    patent infringement under paragraph (6).
    ``(B) Failure to reach agreement. <> --If, within 15 days of
    beginning negotiations under subparagraph (A), the
    subsection (k) applicant and the reference product
    sponsor fail to agree on a final and complete list of
    which, if any, patents listed under paragraph (3) by the
    subsection (k) applicant or the reference product
    sponsor shall be the subject of an action for patent
    infringement under paragraph (6), the provisions of
    paragraph (5) shall apply to the parties.
    ``(5) Patent resolution if no agreement.--
    <>
    ``(A) Number of patents.--The subsection (k)
    applicant shall notify the reference product sponsor of
    the number of patents that such applicant will provide
    to the reference product sponsor under subparagraph
    (B)(i)(I).
    ``(B) Exchange of patent lists.--
    ``(i) In general. <> --On a
    date agreed to by the subsection (k) applicant and
    the reference product sponsor, but in no case
    later than 5 days after the subsection (k)
    applicant notifies the reference product sponsor
    under subparagraph (A), the subsection (k)
    applicant and the reference product sponsor shall
    simultaneously exchange--
    ``(I) the list of patents that the
    subsection (k) applicant believes should
    be the subject of an action for patent
    infringement under paragraph (6); and
    ``(II) the list of patents, in
    accordance with clause (ii), that the
    reference product sponsor believes
    should be the subject of an action for
    patent infringement under paragraph (6).
    ``(ii) Number of patents listed by reference
    product sponsor.--
    ``(I) In general.--Subject to
    subclause (II), the number of patents
    listed by the reference product sponsor
    under clause (i)(II) may not exceed the
    number of patents listed by the
    subsection (k) applicant under clause
    (i)(I).
    ``(II) Exception.--If a subsection
    (k) applicant does not list any patent
    under clause (i)(I), the reference
    product sponsor may list 1 patent under
    clause (i)(II).
    ``(6) <> Immediate patent infringement
    action.--

    [[Page 813]]

    ``(A) Action if agreement on patent list.--If the
    subsection (k) applicant and the reference product
    sponsor agree on patents as described in paragraph (4),
    not later than 30 days after such agreement, the
    reference product sponsor shall bring an action for
    patent infringement with respect to each such patent.
    ``(B) Action if no agreement on patent list.--If the
    provisions of paragraph (5) apply to the parties as
    described in paragraph (4)(B), not later than 30 days
    after the exchange of lists under paragraph (5)(B), the
    reference product sponsor shall bring an action for
    patent infringement with respect to each patent that is
    included on such lists.
    ``(C) Notification and publication of complaint.--
    ``(i) Notification to secretary.--Not later
    than 30 days after a complaint is served to a
    subsection (k) applicant in an action for patent
    infringement described under this paragraph, the
    subsection (k) applicant shall provide the
    Secretary with notice and a copy of such
    complaint.
    ``(ii) Publication by
    secretary. <> --The Secretary shall
    publish in the Federal Register notice of a
    complaint received under clause (i).
    ``(7) Newly issued or licensed patents.--In the case of a
    patent that--
    ``(A) is issued to, or exclusively licensed by, the
    reference product sponsor after the date that the
    reference product sponsor provided the list to the
    subsection (k) applicant under paragraph (3)(A); and
    ``(B) the reference product sponsor reasonably
    believes that, due to the issuance of such patent, a
    claim of patent infringement could reasonably be
    asserted by the reference product sponsor if a person
    not licensed by the reference product sponsor engaged in
    the making, using, offering to sell, selling, or
    importing into the United States of the biological
    product that is the subject of the subsection
    (k) <> application,
    not later than 30 days after such issuance or licensing, the
    reference product sponsor shall provide to the subsection (k)
    applicant a supplement to the list provided by the reference
    product sponsor under paragraph (3)(A) that includes such
    patent, not later than 30 days after such supplement is
    provided, the subsection (k) applicant shall provide a statement
    to the reference product sponsor in accordance with paragraph
    (3)(B), and such patent shall be subject to paragraph (8).
    ``(8) Notice of commercial marketing and preliminary
    injunction.--
    ``(A) Notice of commercial
    marketing. <> --The subsection (k)
    applicant shall provide notice to the reference product
    sponsor not later than 180 days before the date of the
    first commercial marketing of the biological product
    licensed under subsection (k).
    ``(B) Preliminary injunction.--After receiving the
    notice under subparagraph (A) and before such date of
    the first commercial marketing of such biological
    product, the reference product sponsor may seek a
    preliminary injunction prohibiting the subsection (k)
    applicant from

    [[Page 814]]

    engaging in the commercial manufacture or sale of such
    biological product until the court decides the issue of
    patent validity, enforcement, and infringement with
    respect to any patent that is--
    ``(i) included in the list provided by the
    reference product sponsor under paragraph (3)(A)
    or in the list provided by the subsection (k)
    applicant under paragraph (3)(B); and
    ``(ii) not included, as applicable, on--
    ``(I) the list of patents described
    in paragraph (4); or
    ``(II) the lists of patents
    described in paragraph (5)(B).
    ``(C) Reasonable cooperation.--If the reference
    product sponsor has sought a preliminary injunction
    under subparagraph (B), the reference product sponsor
    and the subsection (k) applicant shall reasonably
    cooperate to expedite such further discovery as is
    needed in connection with the preliminary injunction
    motion.
    ``(9) Limitation on declaratory judgment action.--
    ``(A) Subsection (k) application provided.--If a
    subsection (k) applicant provides the application and
    information required under paragraph (2)(A), neither the
    reference product sponsor nor the subsection (k)
    applicant may, prior to the date notice is received
    under paragraph (8)(A), bring any action under section
    2201 of title 28, United States Code, for a declaration
    of infringement, validity, or enforceability of any
    patent that is described in clauses (i) and (ii) of
    paragraph (8)(B).
    ``(B) Subsequent failure to act by subsection (k)
    applicant.--If a subsection (k) applicant fails to
    complete an action required of the subsection (k)
    applicant under paragraph (3)(B)(ii), paragraph (5),
    paragraph (6)(C)(i), paragraph (7), or paragraph (8)(A),
    the reference product sponsor, but not the subsection
    (k) applicant, may bring an action under section 2201 of
    title 28, United States Code, for a declaration of
    infringement, validity, or enforceability of any patent
    included in the list described in paragraph (3)(A),
    including as provided under paragraph (7).
    ``(C) Subsection (k) application not provided.--If a
    subsection (k) applicant fails to provide the
    application and information required under paragraph
    (2)(A), the reference product sponsor, but not the
    subsection (k) applicant, may bring an action under
    section 2201 of title 28, United States Code, for a
    declaration of infringement, validity, or enforceability
    of any patent that claims the biological product or a
    use of the biological product.''.

    (b) Definitions.--Section 351(i) of the Public Health Service Act
    (42 U.S.C. 262(i)) is amended--
    (1) by striking ``In this section, the term `biological
    product' means'' and inserting the following: ``In this section:
    ``(1) The term `biological product' means'';
    (2) in paragraph (1), as so designated, by inserting
    ``protein (except any chemically synthesized polypeptide),''
    after ``allergenic product,''; and
    (3) by adding at the end the following:

    [[Page 815]]

    ``(2) The term `biosimilar' or `biosimilarity', in reference
    to a biological product that is the subject of an application
    under subsection (k), means--
    ``(A) that the biological product is highly similar
    to the reference product notwithstanding minor
    differences in clinically inactive components; and
    ``(B) there are no clinically meaningful differences
    between the biological product and the reference product
    in terms of the safety, purity, and potency of the
    product.
    ``(3) The term `interchangeable' or `interchangeability', in
    reference to a biological product that is shown to meet the
    standards described in subsection (k)(4), means that the
    biological product may be substituted for the reference product
    without the intervention of the health care provider who
    prescribed the reference product.
    ``(4) The term `reference product' means the single
    biological product licensed under subsection (a) against which a
    biological product is evaluated in an application submitted
    under subsection (k).''.

    (c) Conforming Amendments Relating to Patents.--
    (1) Patents.--Section 271(e) of title 35, United States
    Code, is amended--
    (A) in paragraph (2)--
    (i) in subparagraph (A), by striking ``or'' at
    the end;
    (ii) in subparagraph (B), by adding ``or'' at
    the end; and
    (iii) by inserting after subparagraph (B) the
    following:
    ``(C)(i) with respect to a patent that is identified in the
    list of patents described in section 351(l)(3) of the Public
    Health Service Act (including as provided under section
    351(l)(7) of such Act), an application seeking approval of a
    biological product, or
    ``(ii) if the applicant for the application fails to provide
    the application and information required under section
    351(l)(2)(A) of such Act, an application seeking approval of a
    biological product for a patent that could be identified
    pursuant to section 351(l)(3)(A)(i) of such Act,''; and
    (iv) in the matter following subparagraph (C)
    (as added by clause (iii)), by striking ``or
    veterinary biological product'' and inserting ``,
    veterinary biological product, or biological
    product'';
    (B) in paragraph (4)--
    (i) in subparagraph (B), by--
    (I) striking ``or veterinary
    biological product'' and inserting ``,
    veterinary biological product, or
    biological product''; and
    (II) striking ``and'' at the end;
    (ii) in subparagraph (C), by--
    (I) striking ``or veterinary
    biological product'' and inserting ``,
    veterinary biological product, or
    biological product''; and
    (II) striking the period and
    inserting ``, and'';
    (iii) by inserting after subparagraph (C) the
    following:

    [[Page 816]]

    ``(D) <> the court shall order a permanent
    injunction prohibiting any infringement of the patent by the
    biological product involved in the infringement until a date
    which is not earlier than the date of the expiration of the
    patent that has been infringed under paragraph (2)(C), provided
    the patent is the subject of a final court decision, as defined
    in section 351(k)(6) of the Public Health Service Act, in an
    action for infringement of the patent under section 351(l)(6) of
    such Act, and the biological product has not yet been approved
    because of section 351(k)(7) of such Act.''; and
    (iv) in the matter following subparagraph (D)
    (as added by clause (iii)), by striking ``and
    (C)'' and inserting ``(C), and (D)''; and
    (C) by adding at the end the following:

    ``(6)(A) <> Subparagraph (B) applies, in lieu
    of paragraph (4), in the case of a patent--
    ``(i) that is identified, as applicable, in the list of
    patents described in section 351(l)(4) of the Public Health
    Service Act or the lists of patents described in section
    351(l)(5)(B) of such Act with respect to a biological product;
    and
    ``(ii) for which an action for infringement of the patent
    with respect to the biological product--
    ``(I) was brought after the expiration of the 30-day
    period described in subparagraph (A) or (B), as
    applicable, of section 351(l)(6) of such Act; or
    ``(II) was brought before the expiration of the 30-
    day period described in subclause (I), but which was
    dismissed without prejudice or was not prosecuted to
    judgment in good faith.

    ``(B) In an action for infringement of a patent described in
    subparagraph (A), the sole and exclusive remedy that may be granted by a
    court, upon a finding that the making, using, offering to sell, selling,
    or importation into the United States of the biological product that is
    the subject of the action infringed the patent, shall be a reasonable
    royalty.
    ``(C) The owner of a patent that should have been included in the
    list described in section 351(l)(3)(A) of the Public Health Service Act,
    including as provided under section 351(l)(7) of such Act for a
    biological product, but was not timely included in such list, may not
    bring an action under this section for infringement of the patent with
    respect to the biological product.''.
    (2) Conforming amendment under title 28.--Section 2201(b) of
    title 28, United States Code, is amended by inserting before the
    period the following: ``, or section 351 of the Public Health
    Service Act''.

    (d) Conforming Amendments Under the Federal Food, Drug, and Cosmetic
    Act.--
    (1) Content and review of applications.--Section
    505(b)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21
    U.S.C. 355(b)(5)(B)) is amended by inserting before the period
    at the end of the first sentence the following: ``or, with
    respect to an applicant for approval of a biological product
    under section 351(k) of the Public Health Service Act, any
    necessary clinical study or studies''.
    (2) New active ingredient.--Section 505B of the Federal
    Food, Drug, and Cosmetic Act (21 U.S.C. 355c) is amended by
    adding at the end the following:

    [[Page 817]]

    ``(n) New Active Ingredient.--
    ``(1) Non-interchangeable biosimilar biological product.--A
    biological product that is biosimilar to a reference product
    under section 351 of the Public Health Service Act, and that the
    Secretary has not determined to meet the standards described in
    subsection (k)(4) of such section for interchangeability with
    the reference product, shall be considered to have a new active
    ingredient under this section.
    ``(2) Interchangeable biosimilar biological product.--A
    biological product that is interchangeable with a reference
    product under section 351 of the Public Health Service Act shall
    not be considered to have a new active ingredient under this
    section.''.

    (e) <> Products Previously Approved Under
    Section 505.--
    (1) Requirement to follow section 351.--Except as provided
    in paragraph (2), an application for a biological product shall
    be submitted under section 351 of the Public Health Service Act
    (42 U.S.C. 262) (as amended by this Act).
    (2) Exception.--An application for a biological product may
    be submitted under section 505 of the Federal Food, Drug, and
    Cosmetic Act (21 U.S.C. 355) if--
    (A) such biological product is in a product class
    for which a biological product in such product class is
    the subject of an application approved under such
    section 505 not later than the date of enactment of this
    Act; and
    (B) <> such application--
    (i) has been submitted to the Secretary of
    Health and Human Services (referred to in this
    subtitle as the ``Secretary'') before the date of
    enactment of this Act; or
    (ii) is submitted to the Secretary not later
    than the date that is 10 years after the date of
    enactment of this Act.
    (3) Limitation.--Notwithstanding paragraph (2), an
    application for a biological product may not be submitted under
    section 505 of the Federal Food, Drug, and Cosmetic Act (21
    U.S.C. 355) if there is another biological product approved
    under subsection (a) of section 351 of the Public Health Service
    Act that could be a reference product with respect to such
    application (within the meaning of such section 351) if such
    application were submitted under subsection (k) of such section
    351.
    (4) Deemed approved under section 351 <> .--An approved application for a biological product
    under section 505 of the Federal Food, Drug, and Cosmetic Act
    (21 U.S.C. 355) shall be deemed to be a license for the
    biological product under such section 351 on the date that is 10
    years after the date of enactment of this Act.
    (5) Definitions.--For purposes of this subsection, the term
    ``biological product'' has the meaning given such term under
    section 351 of the Public Health Service Act (42 U.S.C. 262) (as
    amended by this Act).

    (f) Follow-on Biologics User Fees.--
    (1) Development of user fees for biosimilar biological
    products.--
    (A) In general. <> --Beginning not later than October 1, 2010, the
    Secretary shall develop recommendations to

    [[Page 818]]

    present to Congress with respect to the goals, and plans
    for meeting the goals, for the process for the review of
    biosimilar biological product applications submitted
    under section 351(k) of the Public Health Service Act
    (as added by this Act) for the first 5 fiscal years
    after fiscal year 2012. <> In
    developing such recommendations, the Secretary shall
    consult with--
    (i) the Committee on Health, Education, Labor,
    and Pensions of the Senate;
    (ii) the Committee on Energy and Commerce of
    the House of Representatives;
    (iii) scientific and academic experts;
    (iv) health care professionals;
    (v) representatives of patient and consumer
    advocacy groups; and
    (vi) the regulated industry.
    (B) Public review of recommendations.--After
    negotiations with the regulated industry, the Secretary
    shall--
    (i) present the recommendations developed
    under subparagraph (A) to the Congressional
    committees specified in such subparagraph;
    (ii) <> publish such recommendations in the
    Federal Register;
    (iii) <> provide for a
    period of 30 days for the public to provide
    written comments on such recommendations;
    (iv) hold a meeting at which the public may
    present its views on such recommendations; and
    (v) after consideration of such public views
    and comments, revise such recommendations as
    necessary.
    (C) Transmittal of
    recommendations. <> --Not later than
    January 15, 2012, the Secretary shall transmit to
    Congress the revised recommendations under subparagraph
    (B), a summary of the views and comments received under
    such subparagraph, and any changes made to the
    recommendations in response to such views and comments.
    (2) <>  Establishment of user fee
    program.--It is the sense of the Senate that, based on the
    recommendations transmitted to Congress by the Secretary
    pursuant to paragraph (1)(C), Congress should authorize a
    program, effective on October 1, 2012, for the collection of
    user fees relating to the submission of biosimilar biological
    product applications under section 351(k) of the Public Health
    Service Act (as added by this Act).
    (3) Transitional provisions for user fees for biosimilar
    biological products.--
    (A) Application of the prescription drug user fee
    provisions.--Section 735(1)(B) of the Federal Food,
    Drug, and Cosmetic Act (21 U.S.C. 379g(1)(B)) is amended
    by striking ``section 351'' and inserting ``subsection
    (a) or (k) of section 351''.
    (B) <> Evaluation of costs
    of reviewing biosimilar biological product
    applications. <> --During the period
    beginning on the date of enactment of this Act and
    ending on October 1, 2010, the Secretary shall collect
    and evaluate data regarding the costs of reviewing
    applications for biological products submitted under
    section 351(k) of the

    [[Page 819]]

    Public Health Service Act (as added by this Act) during
    such period.
    (C) Audit.--
    (i) <>  In general.--On
    the date that is 2 years after first receiving a
    user fee applicable to an application for a
    biological product under section 351(k) of the
    Public Health Service Act (as added by this Act),
    and on a biennial basis thereafter until October
    1, 2013, the Secretary shall perform an audit of
    the costs of reviewing such applications under
    such section 351(k). Such an audit shall compare--
    (I) the costs of reviewing such
    applications under such section 351(k)
    to the amount of the user fee applicable
    to such applications; and
    (II)(aa) such ratio determined under
    subclause (I); to
    (bb) the ratio of the costs of
    reviewing applications for biological
    products under section 351(a) of such
    Act (as amended by this Act) to the
    amount of the user fee applicable to
    such applications under such section
    351(a).
    (ii) Alteration of user fee.--If the audit
    performed under clause (i) indicates that the
    ratios compared under subclause (II) of such
    clause differ by more than 5 percent, then the
    Secretary shall alter the user fee applicable to
    applications submitted under such section 351(k)
    to more appropriately account for the costs of
    reviewing such applications.
    (iii) Accounting standards.--The Secretary
    shall perform an audit under clause (i) in
    conformance with the accounting principles,
    standards, and requirements prescribed by the
    Comptroller General of the United States under
    section 3511 of title 31, United State Code, to
    ensure the validity of any potential variability.
    (4) Authorization of appropriations.--There is authorized to
    be appropriated to carry out this subsection such sums as may be
    necessary for each of fiscal years 2010 through 2012.

    (g) Pediatric Studies of Biological Products.--
    (1) In general.--Section 351 of the Public Health Service
    Act (42 U.S.C. 262) is amended by adding at the end the
    following:

    ``(m) Pediatric Studies.--
    ``(1) Application of certain provisions.--The provisions of
    subsections (a), (d), (e), (f), (i), (j), (k), (l), (p), and (q)
    of section 505A of the Federal Food, Drug, and Cosmetic Act
    shall apply with respect to the extension of a period under
    paragraphs (2) and (3) to the same extent and in the same manner
    as such provisions apply with respect to the extension of a
    period under subsection (b) or (c) of section 505A of the
    Federal Food, Drug, and Cosmetic Act.
    ``(2) Market exclusivity for new biological products.--If,
    prior <>  to approval of an application
    that is submitted under subsection (a), the Secretary determines
    that information relating to the use of a new biological product
    in the pediatric population may produce health benefits in that
    population, the Secretary makes a written request for pediatric
    studies

    [[Page 820]]

    (which shall include a timeframe for completing such studies),
    the applicant agrees to the request, such studies are completed
    using appropriate formulations for each age group for which the
    study is requested within any such timeframe, and the reports
    thereof are submitted and accepted in accordance with section
    505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
    ``(A) the periods for such biological product
    referred to in subsection (k)(7) are deemed to be 4
    years and 6 months rather than 4 years and 12 years and
    6 months rather than 12 years; and
    ``(B) if the biological product is designated under
    section 526 for a rare disease or condition, the period
    for such biological product referred to in section
    527(a) is deemed to be 7 years and 6 months rather than
    7 years.
    ``(3) Market exclusivity for already-marketed biological
    products.--If the Secretary <>  determines
    that information relating to the use of a licensed biological
    product in the pediatric population may produce health benefits
    in that population and makes a written request to the holder of
    an approved application under subsection (a) for pediatric
    studies (which shall include a timeframe for completing such
    studies), the holder agrees to the request, such studies are
    completed using appropriate formulations for each age group for
    which the study is requested within any such timeframe, and the
    reports thereof are submitted and accepted in accordance with
    section 505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
    ``(A) the periods for such biological product
    referred to in subsection (k)(7) are deemed to be 4
    years and 6 months rather than 4 years and 12 years and
    6 months rather than 12 years; and
    ``(B) if the biological product is designated under
    section 526 for a rare disease or condition, the period
    for such biological product referred to in section
    527(a) is deemed to be 7 years and 6 months rather than
    7 years.
    ``(4) Exception.--The Secretary shall not extend a period
    referred to in paragraph (2)(A), (2)(B), (3)(A), or (3)(B) if
    the determination under section 505A(d)(3) is made later than 9
    months prior to the expiration of such period.''.
    (2) Studies regarding pediatric research.--
    (A) Program for pediatric study of drugs.--
    Subsection (a)(1) of section 409I of the Public Health
    Service Act (42 U.S.C. 284m) is amended by inserting ``,
    biological products,'' after ``including drugs''.
    (B) Institute of medicine study.--Section 505A(p) of
    the Federal Food, Drug, and Cosmetic Act <>  (21 U.S.C. 355b(p)) is amended by striking
    paragraphs (4) and (5) and inserting the following:
    ``(4) review and assess the number and importance of
    biological products for children that are being tested as a
    result of the amendments made by the Biologics Price Competition
    and Innovation Act of 2009 and the importance for children,
    health care providers, parents, and others of labeling changes
    made as a result of such testing;

    [[Page 821]]

    ``(5) review and assess the number, importance, and
    prioritization of any biological products that are not being
    tested for pediatric use; and
    ``(6) offer recommendations for ensuring pediatric testing
    of biological products, including consideration of any
    incentives, such as those provided under this section or section
    351(m) of the Public Health Service Act.''.

    (h) <>  Orphan Products.--If a
    reference product, as defined in section 351 of the Public Health
    Service Act (42 U.S.C. 262) (as amended by this Act) has been designated
    under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
    360bb) for a rare disease or condition, a biological product seeking
    approval for such disease or condition under subsection (k) of such
    section 351 as biosimilar to, or interchangeable with, such reference
    product may be licensed by the Secretary only after the expiration for
    such reference product of the later of--
    (1) the 7-year period described in section 527(a) of the
    Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); and
    (2) the 12-year period described in subsection (k)(7) of
    such section 351.

    SEC. 7003. <>  SAVINGS.

    (a) Determination.--The Secretary of the Treasury, in consultation
    with the Secretary of Health and Human Services, shall for each fiscal
    year determine the amount of savings to the Federal Government as a
    result of the enactment of this subtitle.
    (b) Use.--Notwithstanding any other provision of this subtitle (or
    an amendment made by this subtitle), the savings to the Federal
    Government generated as a result of the enactment of this subtitle shall
    be used for deficit reduction.

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

    SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM.

    (a) Expansion of Covered Entities Receiving Discounted Prices.--
    Section 340B(a)(4) of the Public Health Service Act (42 U.S.C.
    256b(a)(4)) is amended by adding at the end the following:
    ``(M) A children's hospital excluded from the
    Medicare prospective payment system pursuant to section
    1886(d)(1)(B)(iii) of the Social Security Act, or a
    free-standing cancer hospital excluded from the Medicare
    prospective payment system pursuant to section
    1886(d)(1)(B)(v) of the Social Security Act, that would
    meet the requirements of subparagraph (L), including the
    disproportionate share adjustment percentage requirement
    under clause (ii) of such subparagraph, if the hospital
    were a subsection (d) hospital as defined by section
    1886(d)(1)(B) of the Social Security Act.
    ``(N) An entity that is a critical access hospital
    (as determined under section 1820(c)(2) of the Social
    Security Act), and that meets the requirements of
    subparagraph (L)(i).
    ``(O) An entity that is a rural referral center, as
    defined by section 1886(d)(5)(C)(i) of the Social
    Security Act, or

    [[Page 822]]

    a sole community hospital, as defined by section
    1886(d)(5)(C)(iii) of such Act, and that both meets the
    requirements of subparagraph (L)(i) and has a
    disproportionate share adjustment percentage equal to or
    greater than 8 percent.''.

    (b) Extension of Discount to Inpatient Drugs.--Section 340B of the
    Public Health Service Act (42 U.S.C. 256b) is amended--
    (1) in paragraphs (2), (5), (7), and (9) of subsection (a),
    by striking ``outpatient'' each place it appears; and
    (2) in subsection (b)--
    (A) by striking ``Other Definition'' and all that
    follows through ``In this section'' and inserting the
    following: ``Other Definitions.--
    ``(1) In general.--In this section''; and
    (B) by adding at the end the following new
    paragraph:
    ``(2) Covered drug.--In this section, the term `covered
    drug'--
    ``(A) means a covered outpatient drug (as defined in
    section 1927(k)(2) of the Social Security Act); and
    ``(B) includes, notwithstanding paragraph (3)(A) of
    section 1927(k) of such Act, a drug used in connection
    with an inpatient or outpatient service provided by a
    hospital described in subparagraph (L), (M), (N), or (O)
    of subsection (a)(4) that is enrolled to participate in
    the drug discount program under this section.''.

    (c) Prohibition on Group Purchasing Arrangements.--Section 340B(a)
    of the Public Health Service Act (42 U.S.C. 256b(a)) is amended--
    (1) in paragraph (4)(L)--
    (A) in clause (i), by adding ``and'' at the end;
    (B) in clause (ii), by striking ``; and'' and
    inserting a period; and
    (C) by striking clause (iii); and
    (2) in paragraph (5), as amended by subsection (b)--
    (A) by redesignating subparagraphs (C) and (D) as
    subparagraphs (D) and (E); respectively; and
    (B) by inserting after subparagraph (B), the
    following:
    ``(C) Prohibition on group purchasing
    arrangements.--
    ``(i) In general.--A hospital described in
    subparagraph (L), (M), (N), or (O) of paragraph
    (4) shall not obtain covered outpatient drugs
    through a group purchasing organization or other
    group purchasing arrangement, except as permitted
    or provided for pursuant to clauses (ii) or (iii).
    ``(ii) Inpatient drugs.--Clause (i) shall not
    apply to drugs purchased for inpatient use.
    ``(iii) Exceptions.--The Secretary shall
    establish reasonable exceptions to clause (i)--
    ``(I) with respect to a covered
    outpatient drug that is unavailable to
    be purchased through the program under
    this section due to a drug shortage
    problem, manufacturer noncompliance, or
    any other circumstance beyond the
    hospital's control;
    ``(II) to facilitate generic
    substitution when a generic covered
    outpatient drug is available at a lower
    price; or

    [[Page 823]]

    ``(III) to reduce in other ways the
    administrative burdens of managing both
    inventories of drugs subject to this
    section and inventories of drugs that
    are not subject to this section, so long
    as the exceptions do not create a
    duplicate discount problem in violation
    of subparagraph (A) or a diversion
    problem in violation of subparagraph
    (B).
    ``(iv) Purchasing arrangements for inpatient
    drugs.--The Secretary shall ensure that a hospital
    described in subparagraph (L), (M), (N), or (O) of
    subsection (a)(4) that is enrolled to participate
    in the drug discount program under this section
    shall have multiple options for purchasing covered
    drugs for inpatients, including by utilizing a
    group purchasing organization or other group
    purchasing arrangement, establishing and utilizing
    its own group purchasing program, purchasing
    directly from a manufacturer, and any other
    purchasing arrangements that the Secretary
    determines is appropriate to ensure access to drug
    discount pricing under this section for inpatient
    drugs taking into account the particular needs of
    small and rural hospitals.''.

    (d) Medicaid Credits on Inpatient Drugs.--Section 340B of the Public
    Health Service Act (42 U.S.C. 256b) is amended by striking subsection
    (c) and inserting the following:
    ``(c) Medicaid Credit.--Not
    later <>  than 90 days after the date of
    filing of the hospital's most recently filed Medicare cost report, the
    hospital shall issue a credit as determined by the Secretary to the
    State Medicaid program for inpatient covered drugs provided to Medicaid
    recipients.''.

    (e) <>  Effective Dates.--
    (1) In general.--The amendments made by this section and
    section 7102 shall take effect on January 1, 2010, and shall
    apply to drugs purchased on or after January 1, 2010.
    (2) Effectiveness.--The amendments made by this section and
    section 7102 shall be effective and shall be taken into account
    in determining whether a manufacturer is deemed to meet the
    requirements of section 340B(a) of the Public Health Service Act
    (42 U.S.C. 256b(a)), notwithstanding any other provision of law.

    SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY.

    (a) Integrity Improvements.--Subsection (d) of section 340B of the
    Public Health Service Act (42 U.S.C. 256b) is amended to read as
    follows:
    ``(d) Improvements in Program Integrity.--
    ``(1) Manufacturer compliance.--
    ``(A) In general.--From amounts appropriated under
    paragraph (4), the Secretary shall provide for
    improvements in compliance by manufacturers with the
    requirements of this section in order to prevent
    overcharges and other violations of the discounted
    pricing requirements specified in this section.
    ``(B) Improvements.--The improvements described in
    subparagraph (A) shall include the following:

    [[Page 824]]

    ``(i) The development of a system to enable
    the Secretary to verify the accuracy of ceiling
    prices calculated by manufacturers under
    subsection (a)(1) and charged to covered entities,
    which shall include the following:
    ``(I) Developing and publishing
    through an appropriate policy or
    regulatory issuance, precisely defined
    standards and methodology for the
    calculation of ceiling prices under such
    subsection.
    ``(II) Comparing regularly the
    ceiling prices calculated by the
    Secretary with the quarterly pricing
    data that is reported by manufacturers
    to the Secretary.
    ``(III) Performing spot checks of
    sales transactions by covered entities.
    ``(IV) Inquiring into the cause of
    any pricing discrepancies that may be
    identified and either taking, or
    requiring manufacturers to take, such
    corrective action as is appropriate in
    response to such price discrepancies.
    ``(ii) The <>
    establishment of procedures for manufacturers to
    issue refunds to covered entities in the event
    that there is an overcharge by the manufacturers,
    including the following:
    ``(I) Providing the Secretary with
    an explanation of why and how the
    overcharge occurred, how the refunds
    will be calculated, and to whom the
    refunds will be issued.
    ``(II) Oversight by the Secretary to
    ensure that the refunds are issued
    accurately and within a reasonable
    period of time, both in routine
    instances of retroactive adjustment to
    relevant pricing data and exceptional
    circumstances such as erroneous or
    intentional overcharging for covered
    drugs.
    ``(iii) The provision of access through the
    Internet website of the Department of Health and
    Human Services to the applicable ceiling prices
    for covered drugs as calculated and verified by
    the Secretary in accordance with this section, in
    a manner (such as through the use of password
    protection) that limits such access to covered
    entities and adequately assures security and
    protection of privileged pricing data from
    unauthorized re-disclosure.
    ``(iv) The development of a mechanism by
    which--
    ``(I) rebates and other discounts
    provided by manufacturers to other
    purchasers subsequent to the sale of
    covered drugs to covered entities are
    reported to the Secretary; and
    ``(II) appropriate credits and
    refunds are issued to covered entities
    if such discounts or rebates have the
    effect of lowering the applicable
    ceiling price for the relevant quarter
    for the drugs involved.
    ``(v) Selective auditing of manufacturers and
    wholesalers to ensure the integrity of the drug
    discount program under this section.

    [[Page 825]]

    ``(vi) The imposition of sanctions in the form
    of civil monetary penalties, which--
    ``(I) shall be assessed according to
    standards established in regulations to
    be promulgated by the Secretary not
    later than 180 days after the date of
    enactment of the Patient Protection and
    Affordable Care Act;
    ``(II) shall not exceed $5,000 for
    each instance of overcharging a covered
    entity that may have occurred; and
    ``(III) <>
    shall apply to any manufacturer with an
    agreement under this section that
    knowingly and intentionally charges a
    covered entity a price for purchase of a
    drug that exceeds the maximum applicable
    price under subsection (a)(1).
    ``(2) Covered entity compliance.--
    ``(A) In general.--From amounts appropriated under
    paragraph (4), the Secretary shall provide for
    improvements in compliance by covered entities with the
    requirements of this section in order to prevent
    diversion and violations of the duplicate discount
    provision and other requirements specified under
    subsection (a)(5).
    ``(B) Improvements.--The improvements described in
    subparagraph (A) shall include the following:
    ``(i) <>  The development
    of procedures to enable and require covered
    entities to regularly update (at least annually)
    the information on the Internet website of the
    Department of Health and Human Services relating
    to this section.
    ``(ii) The development of a system for the
    Secretary to verify the accuracy of information
    regarding covered entities that is listed on the
    website described in clause (i).
    ``(iii) <>  The development
    of more detailed guidance describing methodologies
    and options available to covered entities for
    billing covered drugs to State Medicaid agencies
    in a manner that avoids duplicate discounts
    pursuant to subsection (a)(5)(A).
    ``(iv) The establishment of a single,
    universal, and standardized identification system
    by which each covered entity site can be
    identified by manufacturers, distributors, covered
    entities, and the Secretary for purposes of
    facilitating the ordering, purchasing, and
    delivery of covered drugs under this section,
    including the processing of chargebacks for such
    drugs.
    ``(v) <>  The
    imposition of sanctions, in appropriate cases as
    determined by the Secretary, additional to those
    to which covered entities are subject under
    subsection (a)(5)(E), through one or more of the
    following actions:
    ``(I) Where a covered entity
    knowingly and intentionally violates
    subsection (a)(5)(B), the covered entity
    shall be required to pay a monetary
    penalty to a manufacturer or
    manufacturers in the form of interest on
    sums for which the covered entity is
    found liable under subsection (a)(5)(E),
    such interest to be compounded monthly
    and equal

    [[Page 826]]

    to the current short term interest rate
    as determined by the Federal Reserve for
    the time period for which the covered
    entity is liable.
    ``(II) Where the Secretary
    determines a violation of subsection
    (a)(5)(B) was systematic and egregious
    as well as knowing and intentional,
    removing the covered entity from the
    drug discount program under this section
    and disqualifying the entity from re-
    entry into such program for a reasonable
    period of time to be determined by the
    Secretary.
    ``(III) Referring matters to
    appropriate Federal authorities within
    the Food and Drug Administration, the
    Office of Inspector General of
    Department of Health and Human Services,
    or other Federal agencies for
    consideration of appropriate action
    under other Federal statutes, such as
    the Prescription Drug Marketing Act (21
    U.S.C. 353).
    ``(3) Administrative dispute resolution process.--
    ``(A) In general.--Not
    later <>  than 180 days
    after the date of enactment of the Patient Protection
    and Affordable Care Act, the Secretary shall promulgate
    regulations to establish and implement an administrative
    process for the resolution of claims by covered entities
    that they have been overcharged for drugs purchased
    under this section, and claims by manufacturers, after
    the conduct of audits as authorized by subsection
    (a)(5)(D), of violations of subsections (a)(5)(A) or
    (a)(5)(B), including appropriate procedures for the
    provision of remedies and enforcement of determinations
    made pursuant to such process through mechanisms and
    sanctions described in paragraphs (1)(B) and (2)(B).
    ``(B) Deadlines and procedures.--Regulations
    promulgated by the Secretary under subparagraph (A)
    shall--
    ``(i) designate or establish a decision-making
    official or decision-making body within the
    Department of Health and Human Services to be
    responsible for reviewing and finally resolving
    claims by covered entities that they have been
    charged prices for covered drugs in excess of the
    ceiling price described in subsection (a)(1), and
    claims by manufacturers that violations of
    subsection (a)(5)(A) or (a)(5)(B) have occurred;
    ``(ii) establish such deadlines and procedures
    as may be necessary to ensure that claims shall be
    resolved fairly, efficiently, and expeditiously;
    ``(iii) establish procedures by which a
    covered entity may discover and obtain such
    information and documents from manufacturers and
    third parties as may be relevant to demonstrate
    the merits of a claim that charges for a
    manufacturer's product have exceeded the
    applicable ceiling price under this section, and
    may submit such documents and information to the
    administrative official or body responsible for
    adjudicating such claim;
    ``(iv) <>  require that a
    manufacturer conduct an audit of a covered entity
    pursuant to subsection (a)(5)(D)

    [[Page 827]]

    as a prerequisite to initiating administrative
    dispute resolution proceedings against a covered
    entity;
    ``(v) permit the official or body designated
    under clause (i), at the request of a manufacturer
    or manufacturers, to consolidate claims brought by
    more than one manufacturer against the same
    covered entity where, in the judgment of such
    official or body, consolidation is appropriate and
    consistent with the goals of fairness and economy
    of resources; and
    ``(vi) include provisions and procedures to
    permit multiple covered entities to jointly assert
    claims of overcharges by the same manufacturer for
    the same drug or drugs in one administrative
    proceeding, and permit such claims to be asserted
    on behalf of covered entities by associations or
    organizations representing the interests of such
    covered entities and of which the covered entities
    are members.
    ``(C) Finality of administrative resolution.--The
    administrative resolution of a claim or claims under the
    regulations promulgated under subparagraph (A) shall be
    a final agency decision and shall be binding upon the
    parties involved, unless invalidated by an order of a
    court of competent jurisdiction.
    ``(4) Authorization of appropriations.--There are authorized
    to be appropriated to carry out this subsection, such sums as
    may be necessary for fiscal year 2010 and each succeeding fiscal
    year.''.

    (b) Conforming Amendments.--Section 340B(a) of the Public Health
    Service Act (42 U.S.C. 256b(a)) is amended--
    (1) in subsection (a)(1), by adding at the end the
    following: ``Each such
    agreement <>  shall
    require that the manufacturer furnish the Secretary with
    reports, on a quarterly basis, of the price for each covered
    drug subject to the agreement that, according to the
    manufacturer, represents the maximum price that covered entities
    may permissibly be required to pay for the drug (referred to in
    this section as the `ceiling price'), and shall require that the
    manufacturer offer each covered entity covered drugs for
    purchase at or below the applicable ceiling price if such drug
    is made available to any other purchaser at any price.''; and
    (2) in the first sentence of subsection (a)(5)(E), as
    redesignated by section 7101(c), by inserting ``after audit as
    described in subparagraph (D) and'' after ``finds,''.

    SEC. 7103. GAO STUDY TO MAKE RECOMMENDATIONS ON IMPROVING THE 340B
    PROGRAM.

    (a) Report.--Not later than 18 months after the date of enactment of
    this Act, the Comptroller General of the United States shall submit to
    Congress a report that examines whether those individuals served by the
    covered entities under the program under section 340B of the Public
    Health Service Act (42 U.S.C. 256b) (referred to in this section as the
    ``340B program'') are receiving optimal health care services.
    (b) Recommendations.--The report under subsection (a) shall include
    recommendations on the following:

    [[Page 828]]

    (1) Whether the 340B program should be expanded since it is
    anticipated that the 47,000,000 individuals who are uninsured as
    of the date of enactment of this Act will have health care
    coverage once this Act is implemented.
    (2) Whether mandatory sales of certain products by the 340B
    program could hinder patients access to those therapies through
    any provider.
    (3) Whether income from the 340B program is being used by
    the covered entities under the program to further the program
    objectives.

    TITLE VIII--CLASS ACT <>

    SEC. 8001. SHORT TITLE OF TITLE.

    This title may be cited as the ``Community Living Assistance
    Services and Supports Act'' or the ``CLASS Act''.

    SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR
    PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORT.

    (a) Establishment of CLASS Program.--
    (1) In general.--The Public Health Service Act (42 U.S.C.
    201 et seq.), as amended by section 4302(a), is amended by
    adding at the end the following:

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

    ``SEC. 3201. <>  PURPOSE.

    ``The purpose of this title is to establish a national voluntary
    insurance program for purchasing community living assistance services
    and supports in order to--
    ``(1) provide individuals with functional limitations with
    tools that will allow them to maintain their personal and
    financial independence and live in the community through a new
    financing strategy for community living assistance services and
    supports;
    ``(2) establish an infrastructure that will help address the
    Nation's community living assistance services and supports
    needs;
    ``(3) alleviate burdens on family caregivers; and
    ``(4) address institutional bias by providing a financing
    mechanism that supports personal choice and independence to live
    in the community.

    ``SEC. 3202. <>  DEFINITIONS.

    ``In this title:
    ``(1) Active enrollee.--The term `active enrollee' means an
    individual who is enrolled in the CLASS program in accordance
    with section 3204 and who has paid any premiums due to maintain
    such enrollment.
    ``(2) Actively employed.--The term `actively employed' means
    an individual who--
    ``(A) is reporting for work at the individual's
    usual place of employment or at another location to
    which the

    [[Page 829]]

    individual is required to travel because of the
    individual's employment (or in the case of an individual
    who is a member of the uniformed services, is on active
    duty and is physically able to perform the duties of the
    individual's position); and
    ``(B) is able to perform all the usual and customary
    duties of the individual's employment on the
    individual's regular work schedule.
    ``(3) Activities of daily living.--The term `activities of
    daily living' means each of the following activities specified
    in section 7702B(c)(2)(B) of the Internal Revenue Code of 1986:
    ``(A) Eating.
    ``(B) Toileting.
    ``(C) Transferring.
    ``(D) Bathing.
    ``(E) Dressing.
    ``(F) Continence.
    ``(4) CLASS program.--The term `CLASS program' means the
    program established under this title.
    ``(5) Eligibility assessment system.--The term `Eligibility
    Assessment System' means the entity established by the Secretary
    under section 3205(a)(2) to make functional eligibility
    determinations for the CLASS program.
    ``(6) Eligible beneficiary.--
    ``(A) In general.--The term `eligible beneficiary'
    means any individual who is an active enrollee in the
    CLASS program and, as of the date described in
    subparagraph (B)--
    ``(i) has paid premiums for enrollment in such
    program for at least 60 months;
    ``(ii) has earned, with respect to at least 3
    calendar years that occur during the first 60
    months for which the individual has paid premiums
    for enrollment in the program, at least an amount
    equal to the amount of wages and self-employment
    income which an individual must have in order to
    be credited with a quarter of coverage under
    section 213(d) of the Social Security Act for the
    year; and
    ``(iii) has paid premiums for enrollment in
    such program for at least 24 consecutive months,
    if a lapse in premium payments of more than 3
    months has occurred during the period that begins
    on the date of the individual's enrollment and
    ends on the date of such determination.
    ``(B) Date described.--For purposes of subparagraph
    (A), the date described in this subparagraph is the date
    on which the individual is determined to have a
    functional limitation described in section 3203(a)(1)(C)
    that is expected to last for a continuous period of more
    than 90 days.
    ``(C) Regulations.--The Secretary shall promulgate
    regulations specifying exceptions to the minimum
    earnings requirements under subparagraph (A)(ii) for
    purposes of being considered an eligible beneficiary for
    certain populations.
    ``(7) Hospital; nursing facility; intermediate care facility
    for the mentally retarded; institution for

    [[Page 830]]

    mental diseases.--The terms `hospital', `nursing facility',
    `intermediate care facility for the mentally retarded', and
    `institution for mental diseases' have the meanings given such
    terms for purposes of Medicaid.
    ``(8) CLASS independence advisory council.--The term `CLASS
    Independence Advisory Council' or `Council' means the Advisory
    Council established under section 3207 to advise the Secretary.
    ``(9) CLASS independence benefit plan.--The term `CLASS
    Independence Benefit Plan' means the benefit plan developed and
    designated by the Secretary in accordance with section 3203.
    ``(10) CLASS independence fund.--The term `CLASS
    Independence Fund' or `Fund' means the fund established under
    section 3206.
    ``(11) Medicaid.--The term `Medicaid' means the program
    established under title XIX of the Social Security Act (42
    U.S.C. 1396 et seq.).
    ``(12) Poverty line.--The term `poverty line' has the
    meaning given that term in section 2110(c)(5) of the Social
    Security Act (42 U.S.C. 1397jj(c)(5)).
    ``(13) Protection and advocacy system.--The term `Protection
    and Advocacy System' means the system for each State established
    under section 143 of the Developmental Disabilities Assistance
    and Bill of Rights Act of 2000 (42 U.S.C. 15043).

    ``SEC. 3203. <>  CLASS INDEPENDENCE BENEFIT PLAN.

    ``(a) Process for Development.--
    ``(1) In general.--The Secretary, in consultation with
    appropriate actuaries and other experts, shall develop at least
    3 actuarially sound benefit plans as alternatives for
    consideration for designation by the Secretary as the CLASS
    Independence Benefit Plan under which eligible beneficiaries
    shall receive benefits under this title. Each of the plan
    alternatives developed shall be designed to provide eligible
    beneficiaries with the benefits described in section 3205
    consistent with the following requirements:
    ``(A) Premiums.--
    ``(i) In general.--Beginning with the first
    year of the CLASS program, and for each year
    thereafter, subject to clauses (ii) and (iii), the
    Secretary shall establish all premiums to be paid
    by enrollees for the year based on an actuarial
    analysis of the 75-year costs of the program that
    ensures solvency throughout such 75-year period.
    ``(ii) Nominal premium for poorest individuals
    and full-time students.--
    ``(I) In general.--The monthly
    premium for enrollment in the CLASS
    program shall not exceed the applicable
    dollar amount per month determined under
    subclause (II) for--
    ``(aa) any individual whose
    income does not exceed the
    poverty line; and
    ``(bb) any individual who
    has not attained age 22, and is
    actively employed during any

    [[Page 831]]

    period in which the individual
    is a full-time student (as
    determined by the Secretary).
    ``(II) Applicable dollar amount.--
    The applicable dollar amount described
    in this subclause is the amount equal to
    $5, increased by the percentage increase
    in the consumer price index for all
    urban consumers (U.S. city average) for
    each year occurring after 2009 and
    before such year.
    ``(iii) Class independence fund reserves.--At
    such time as the CLASS program has been in
    operation for 10 years, the Secretary shall
    establish all premiums to be paid by enrollees for
    the year based on an actuarial analysis that
    accumulated reserves in the CLASS Independence
    Fund would not decrease in that year. At such
    time <>  as the Secretary
    determines the CLASS program demonstrates a
    sustained ability to finance expected yearly
    expenses with expected yearly premiums and
    interest credited to the CLASS Independence Fund,
    the Secretary may decrease the required amount of
    CLASS Independence Fund reserves.
    ``(B) Vesting period.--A 5-year vesting period for
    eligibility for benefits.
    ``(C) Benefit triggers.--A benefit trigger for
    provision of benefits that requires a determination that
    an individual has a functional limitation, as certified
    by a licensed health care practitioner, described in any
    of the following clauses that is expected to last for a
    continuous period of more than 90 days:
    ``(i) The individual is determined to be
    unable to perform at least the minimum number
    (which may be 2 or 3) of activities of daily
    living as are required under the plan for the
    provision of benefits without substantial
    assistance (as defined by the Secretary) from
    another individual.
    ``(ii) The individual requires substantial
    supervision to protect the individual from threats
    to health and safety due to substantial cognitive
    impairment.
    ``(iii) <>  The individual
    has a level of functional limitation similar (as
    determined under regulations prescribed by the
    Secretary) to the level of functional limitation
    described in clause (i) or (ii).
    ``(D) Cash benefit.--Payment of a cash benefit that
    satisfies the following requirements:
    ``(i) Minimum required amount.--The benefit
    amount provides an eligible beneficiary with not
    less than an average of $50 per day (as determined
    based on the reasonably expected distribution of
    beneficiaries receiving benefits at various
    benefit levels).
    ``(ii) Amount scaled to functional ability.--
    The benefit amount is varied based on a scale of
    functional ability, with not less than 2, and not
    more than 6, benefit level amounts.
    ``(iii) Daily or weekly.--The benefit is paid
    on a daily or weekly basis.
    ``(iv) No lifetime or aggregate limit.--The
    benefit is not subject to any lifetime or
    aggregate limit.

    [[Page 832]]

    ``(E) Coordination with supplemental coverage
    obtained through the exchange.--The benefits allow for
    coordination with any supplemental coverage purchased
    through an Exchange established under section 1311 of
    the Patient Protection and Affordable Care Act.
    ``(2) Review and recommendation by the class independence
    advisory council.--The CLASS Independence Advisory Council
    shall--
    ``(A) evaluate the alternative benefit plans
    developed under paragraph (1); and
    ``(B) recommend for designation as the CLASS
    Independence Benefit Plan for offering to the public the
    plan that the Council determines best balances price and
    benefits to meet enrollees' needs in an actuarially
    sound manner, while optimizing the probability of the
    long-term sustainability of the CLASS program.
    ``(3) Designation by the secretary.--Not
    later <>  than October 1, 2012, the Secretary,
    taking into consideration the recommendation of the CLASS
    Independence Advisory Council under paragraph (2)(B), shall
    designate a benefit plan as the CLASS Independence Benefit
    Plan. <>
    The Secretary shall publish such designation, along with details
    of the plan and the reasons for the selection by the Secretary,
    in a final rule that allows for a period of public comment.

    ``(b) Additional Premium Requirements.--
    ``(1) Adjustment of premiums.--
    ``(A) In general.--Except as provided in
    subparagraphs (B), (C), (D), and (E), the amount of the
    monthly premium determined for an individual upon such
    individual's enrollment in the CLASS program shall
    remain the same for as long as the individual is an
    active enrollee in the program.
    ``(B) Recalculated premium if required for program
    solvency.--
    ``(i) <>  In general.--
    Subject to clause (ii), if the Secretary
    determines, based on the most recent report of the
    Board of Trustees of the CLASS Independence Fund,
    the advice of the CLASS Independence Advisory
    Council, and the annual report of the Inspector
    General of the Department of Health and Human
    Services, and waste, fraud, and abuse, or such
    other information as the Secretary determines
    appropriate, that the monthly premiums and income
    to the CLASS Independence Fund for a year are
    projected to be insufficient with respect to the
    20-year period that begins with that year, the
    Secretary shall adjust the monthly premiums for
    individuals enrolled in the CLASS program as
    necessary (but maintaining a nominal premium for
    enrollees whose income is below the poverty line
    or who are full-time students actively employed).
    ``(ii) Exemption from increase.--Any increase
    in a monthly premium imposed as result of a
    determination described in clause (i) shall not
    apply with respect to the monthly premium of any
    active enrollee who--
    ``(I) has attained age 65;

    [[Page 833]]

    ``(II) has paid premiums for
    enrollment in the program for at least
    20 years; and
    ``(III) is not actively employed.
    ``(C) Recalculated premium if reenrollment after
    more than a 3-month lapse.--
    ``(i) In general.--The reenrollment of an
    individual after a 90-day period during which the
    individual failed to pay the monthly premium
    required to maintain the individual's enrollment
    in the CLASS program shall be treated as an
    initial enrollment for purposes of age-adjusting
    the premium for enrollment in the program.
    ``(ii) Credit for prior months if reenrolled
    within 5 years.--An individual who reenrolls in
    the CLASS program after such a 90-day period and
    before the end of the 5-year period that begins
    with the first month for which the individual
    failed to pay the monthly premium required to
    maintain the individual's enrollment in the
    program shall be--
    ``(I) credited with any months of
    paid premiums that accrued prior to the
    individual's lapse in enrollment; and
    ``(II) notwithstanding the total
    amount of any such credited months,
    required to satisfy section
    3202(6)(A)(ii) before being eligible to
    receive benefits.
    ``(D) No longer status as a full-time student.--An
    individual subject to a nominal premium on the basis of
    being described in subsection (a)(1)(A)(ii)(I)(bb) who
    ceases to be described in that subsection, beginning
    with the first month following the month in which the
    individual ceases to be so described, shall be subject
    to the same monthly premium as the monthly premium that
    applies to an individual of the same age who first
    enrolls in the program under the most similar
    circumstances as the individual (such as the first year
    of eligibility for enrollment in the program or in a
    subsequent year).
    ``(E) Penalty for reenollment after 5-year lapse.--
    In the case of an individual who reenrolls in the CLASS
    program after the end of the 5-year period described in
    subparagraph (C)(ii), the monthly premium required for
    the individual shall be the age-adjusted premium that
    would be applicable to an initially enrolling individual
    who is the same age as the reenrolling individual,
    increased by the greater of--
    ``(i) an amount that the Secretary determines
    is actuarially sound for each month that occurs
    during the period that begins with the first month
    for which the individual failed to pay the monthly
    premium required to maintain the individual's
    enrollment in the CLASS program and ends with the
    month preceding the month in which the reenollment
    is effective; or
    ``(ii) 1 percent of the applicable age-
    adjusted premium for each such month occurring in
    such period.
    ``(2) Administrative expenses.--In determining the monthly
    premiums for the CLASS program the Secretary may

    [[Page 834]]

    factor in costs for administering the program, not to exceed for
    any year in which the program is in effect under this title, an
    amount equal to 3 percent of all premiums paid during the year.
    ``(3) No underwriting requirements.--No underwriting (other
    than on the basis of age in accordance with subparagraphs (D)
    and (E) of paragraph (1)) shall be used to--
    ``(A) determine the monthly premium for enrollment
    in the CLASS program; or
    ``(B) prevent an individual from enrolling in the
    program.

    ``(c) <>  Self-attestation and Verification of
    Income.--The Secretary shall establish procedures to--
    ``(1) permit an individual who is eligible for the nominal
    premium required under subsection (a)(1)(A)(ii), as part of
    their automatic enrollment in the CLASS program, to self-attest
    that their income does not exceed the poverty line or that their
    status as a full-time student who is actively employed;
    ``(2) verify, using procedures similar to the procedures
    used by the Commissioner of Social Security under section
    1631(e)(1)(B)(ii) of the Social Security Act and consistent with
    the requirements applicable to the conveyance of data and
    information under section 1942 of such Act, the validity of such
    self-attestation; and
    ``(3) require an individual to confirm, on at least an
    annual basis, that their income does not exceed the poverty line
    or that they continue to maintain such status.

    ``SEC. 3204. <>  ENROLLMENT AND DISENROLLMENT
    REQUIREMENTS.

    ``(a) <>  Automatic Enrollment.--
    ``(1) In general.--Subject to paragraph (2), the Secretary,
    in coordination with the Secretary of the Treasury, shall
    establish procedures under which each individual described in
    subsection (c) may be automatically enrolled in the CLASS
    program by an employer of such individual in the same manner as
    an employer may elect to automatically enroll employees in a
    plan under section 401(k), 403(b), or 457 of the Internal
    Revenue Code of 1986.
    ``(2) Alternative enrollment procedures.--The procedures
    established under paragraph (1) shall provide for an alternative
    enrollment process for an individual described in subsection (c)
    in the case of such an individual--
    ``(A) who is self-employed;
    ``(B) who has more than 1 employer; or
    ``(C) whose employer does not elect to participate
    in the automatic enrollment process established by the
    Secretary.
    ``(3) Administration.--
    ``(A) <>  In general.--The
    Secretary and the Secretary of the Treasury shall, by
    regulation, establish procedures to ensure that an
    individual is not automatically enrolled in the CLASS
    program by more than 1 employer.
    ``(B) Form.--Enrollment in the CLASS program shall
    be made in such manner as the Secretary may prescribe in
    order to ensure ease of administration.

    ``(b) Election to Opt-Out.--An individual described in subsection
    (c) may elect to waive enrollment in the CLASS program

    [[Page 835]]

    at any time in such form and manner as the Secretary and the Secretary
    of the Treasury shall prescribe.
    ``(c) Individual Described.--For purposes of enrolling in the CLASS
    program, an individual described in this paragraph is an individual--
    ``(1) who has attained age 18;
    ``(2) who--
    ``(A) receives wages on which there is imposed a tax
    under section 3201(a) of the Internal Revenue Code of
    1986; or
    ``(B) derives self-employment income on which there
    is imposed a tax under section 1401(a) of the Internal
    Revenue Code of 1986;
    ``(3) who is actively employed; and
    ``(4) who is not--
    ``(A) a patient in a hospital or nursing facility,
    an intermediate care facility for the mentally retarded,
    or an institution for mental diseases and receiving
    medical assistance under Medicaid; or
    ``(B) confined in a jail, prison, other penal
    institution or correctional facility, or by court order
    pursuant to conviction of a criminal offense or in
    connection with a verdict or finding described in
    section 202(x)(1)(A)(ii) of the Social Security Act (42
    U.S.C. 402(x)(1)(A)(ii)).

    ``(d) Rule of Construction.--Nothing in this title shall be
    construed as requiring an active enrollee to continue to satisfy
    subparagraph (B) or (C) of subsection (c)(1) in order to maintain
    enrollment in the CLASS program.
    ``(e) Payment.--
    ``(1) Payroll deduction.--An amount equal to the monthly
    premium for the enrollment in the CLASS program of an individual
    shall be deducted from the wages or self-employment income of
    such individual in accordance with such procedures as the
    Secretary, in coordination with the Secretary of the Treasury,
    shall establish for employers who elect to deduct and withhold
    such premiums on behalf of enrolled employees.
    ``(2) Alternative payment mechanism.--The Secretary, in
    coordination with the Secretary of the Treasury, shall establish
    alternative procedures for the payment of monthly premiums by an
    individual enrolled in the CLASS program--
    ``(A) who does not have an employer who elects to
    deduct and withhold premiums in accordance with
    subparagraph (A); or
    ``(B) who does not earn wages or derive self-
    employment income.

    ``(f) Transfer of Premiums Collected.--
    ``(1) In general.--During each calendar year the Secretary
    of the Treasury shall deposit into the CLASS Independence Fund a
    total amount equal, in the aggregate, to 100 percent of the
    premiums collected during that year.
    ``(2) Transfers based on estimates.--The amount deposited
    pursuant to paragraph (1) shall be transferred in at least
    monthly payments to the CLASS Independence Fund on the basis of
    estimates by the Secretary and certified to the Secretary of the
    Treasury of the amounts collected in accordance with
    subparagraphs (A) and (B) of paragraph (5). Proper adjustments
    shall be made in amounts subsequently transferred to

    [[Page 836]]

    the Fund to the extent prior estimates were in excess of, or
    were less than, actual amounts collected.

    ``(g) Other Enrollment and Disenrollment Opportunities.--The
    Secretary, <>  in coordination with the Secretary of
    the Treasury, shall establish procedures under which--
    ``(1) an individual who, in the year of the individual's
    initial eligibility to enroll in the CLASS program, has elected
    to waive enrollment in the program, is eligible to elect to
    enroll in the program, in such form and manner as the
    Secretaries shall establish, only during an open enrollment
    period established by the Secretaries that is specific to the
    individual and that may not occur more frequently than
    biennially after the date on which the individual first elected
    to waive enrollment in the program; and
    ``(2) an individual shall only be permitted to disenroll
    from the program (other than for nonpayment of premiums) during
    an annual disenrollment period established by the Secretaries
    and in such form and manner as the Secretaries shall establish.

    ``SEC. 3205. <>  BENEFITS.

    ``(a) Determination of Eligibility.--
    ``(1) Application for receipt of benefits.--The Secretary
    shall establish procedures under which an active enrollee shall
    apply for receipt of benefits under the CLASS Independence
    Benefit Plan.
    ``(2) Eligibility assessments.--
    ``(A) In general.--Not
    later <>  than January 1,
    2012, the Secretary shall--
    ``(i) establish an Eligibility Assessment
    System (other than a service with which the
    Commissioner of Social Security has entered into
    an agreement, with respect to any State, to make
    disability determinations for purposes of title II
    or XVI of the Social Security Act) to provide for
    eligibility assessments of active enrollees who
    apply for receipt of benefits;
    ``(ii) enter into an agreement with the
    Protection and Advocacy System for each State to
    provide advocacy services in accordance with
    subsection (d); and
    ``(iii) enter into an agreement with public
    and private entities to provide advice and
    assistance counseling in accordance with
    subsection (e).
    ``(B) Regulations.--The Secretary shall promulgate
    regulations to develop an expedited nationally equitable
    eligibility determination process, as certified by a
    licensed health care practitioner, an appeals process,
    and a redetermination process, as certified by a
    licensed health care practitioner, including whether an
    active enrollee is eligible for a cash benefit under the
    program and if so, the amount of the cash benefit (in
    accordance the sliding scale established under the
    plan).
    ``(C) Presumptive eligibility for certain
    institutionalized enrollees planning to discharge.--An
    active enrollee shall be deemed presumptively eligible
    if the enrollee--
    ``(i) has applied for, and attests is eligible
    for, the maximum cash benefit available under the
    sliding

    [[Page 837]]

    scale established under the CLASS Independence
    Benefit Plan;
    ``(ii) is a patient in a hospital (but only if
    the hospitalization is for long-term care),
    nursing facility, intermediate care facility for
    the mentally retarded, or an institution for
    mental diseases; and
    ``(iii) <>  is in the process
    of, or about to begin the process of, planning to
    discharge from the hospital, facility, or
    institution, or within 60 days from the date of
    discharge from the hospital, facility, or
    institution.
    ``(D) Appeals.--The Secretary <>
    shall establish procedures under which an applicant for
    benefits under the CLASS Independence Benefit Plan shall
    be guaranteed the right to appeal an adverse
    determination.

    ``(b) Benefits.--An eligible beneficiary shall receive the following
    benefits under the CLASS Independence Benefit Plan:
    ``(1) Cash benefit.--A cash benefit established by the
    Secretary in accordance with the requirements of section
    3203(a)(1)(D) that--
    ``(A) the first year in which beneficiaries receive
    the benefits under the plan, is not less than the
    average dollar amount specified in clause (i) of such
    section; and
    ``(B) for any subsequent year, is not less than the
    average per day dollar limit applicable under this
    subparagraph for the preceding year, increased by the
    percentage increase in the consumer price index for all
    urban consumers (U.S. city average) over the previous
    year.
    ``(2) Advocacy services.--Advocacy services in accordance
    with subsection (d).
    ``(3) Advice and assistance counseling.--Advice and
    assistance counseling in accordance with subsection (e).
    ``(4) Administrative expenses.--Advocacy services and advise
    and assistance counseling services under paragraphs (2) and (3)
    of this subsection shall be included as administrative expenses
    under section 3203(b)(3).

    ``(c) Payment of Benefits.--
    ``(1) Life independence account.--
    ``(A) In general.--The
    Secretary <>  shall establish
    procedures for administering the provision of benefits
    to eligible beneficiaries under the CLASS Independence
    Benefit Plan, including the payment of the cash benefit
    for the beneficiary into a Life Independence Account
    established by the Secretary on behalf of each eligible
    beneficiary.
    ``(B) Use of cash benefits.--Cash benefits paid into
    a Life Independence Account of an eligible beneficiary
    shall be used to purchase nonmedical services and
    supports that the beneficiary needs to maintain his or
    her independence at home or in another residential
    setting of their choice in the community, including (but
    not limited to) home modifications, assistive
    technology, accessible transportation, homemaker
    services, respite care, personal assistance services,
    home care aides, and nursing support. Nothing in the
    preceding sentence shall prevent an eligible beneficiary
    from using cash benefits paid into a Life Independence
    Account for obtaining assistance with decision making
    concerning medical care, including the right to accept
    or refuse medical or surgical treatment and the

    [[Page 838]]

    right to formulate advance directives or other written
    instructions recognized under State law, such as a
    living will or durable power of attorney for health
    care, in the case that an injury or illness causes the
    individual to be unable to make health care decisions.
    ``(C) <>  Electronic management
    of funds.--The Secretary shall establish procedures
    for--
    ``(i) crediting an account established on
    behalf of a beneficiary with the beneficiary's
    cash daily benefit;
    ``(ii) allowing the beneficiary to access such
    account through debit cards; and
    ``(iii) accounting for withdrawals by the
    beneficiary from such account.
    ``(D) Primary payor rules for beneficiaries who are
    enrolled in medicaid.--In the case of an eligible
    beneficiary who is enrolled in Medicaid, the following
    payment rules shall apply:
    ``(i) Institutionalized beneficiary.--If the
    beneficiary is a patient in a hospital, nursing
    facility, intermediate care facility for the
    mentally retarded, or an institution for mental
    diseases, the beneficiary shall retain an amount
    equal to 5 percent of the beneficiary's daily or
    weekly cash benefit (as applicable) (which shall
    be in addition to the amount of the beneficiary's
    personal needs allowance provided under Medicaid),
    and the remainder of such benefit shall be applied
    toward the facility's cost of providing the
    beneficiary's care, and Medicaid shall provide
    secondary coverage for such care.
    ``(ii) Beneficiaries receiving home and
    community-based services.--
    ``(I) 50 percent of benefit retained
    by beneficiary.--Subject to subclause
    (II), if a beneficiary is receiving
    medical assistance under Medicaid for
    home and community based services, the
    beneficiary shall retain an amount equal
    to 50 percent of the beneficiary's daily
    or weekly cash benefit (as applicable),
    and the remainder of the daily or weekly
    cash benefit shall be applied toward the
    cost to the State of providing such
    assistance (and shall not be used to
    claim Federal matching funds under
    Medicaid), and Medicaid shall provide
    secondary coverage for the remainder of
    any costs incurred in providing such
    assistance.
    ``(II) Requirement for state
    offset.--A State shall be paid the
    remainder of a beneficiary's daily or
    weekly cash benefit under subclause (I)
    only if the State home and community-
    based waiver under section 1115 of the
    Social Security Act (42 U.S.C. 1315) or
    subsection (c) or (d) of section 1915 of
    such Act (42 U.S.C. 1396n), or the State
    plan amendment under subsection (i) of
    such section does not include a waiver
    of the requirements of section
    1902(a)(1) of the Social Security Act
    (relating to statewideness) or of
    section 1902(a)(10)(B) of such Act
    (relating to comparability) and the
    State offers at a minimum

    [[Page 839]]

    case management services, personal care
    services, habilitation services, and
    respite care under such a waiver or
    State plan amendment.
    ``(III) Definition of home and
    community-based services.--In this
    clause, the term `home and community-
    based services' means any services which
    may be offered under a home and
    community-based waiver authorized for a
    State under section 1115 of the Social
    Security Act (42 U.S.C. 1315) or
    subsection (c) or (d) of section 1915 of
    such Act (42 U.S.C. 1396n) or under a
    State plan amendment under subsection
    (i) of such section.
    ``(iii) Beneficiaries enrolled in programs of
    all-inclusive care for the elderly (pace).--
    ``(I) In general.--Subject to
    subclause (II), if a beneficiary is
    receiving medical assistance under
    Medicaid for PACE program services under
    section 1934 of the Social Security Act
    (42 U.S.C. 1396u-4), the beneficiary
    shall retain an amount equal to 50
    percent of the beneficiary's daily or
    weekly cash benefit (as applicable), and
    the remainder of the daily or weekly
    cash benefit shall be applied toward the
    cost to the State of providing such
    assistance (and shall not be used to
    claim Federal matching funds under
    Medicaid), and Medicaid shall provide
    secondary coverage for the remainder of
    any costs incurred in providing such
    assistance.
    ``(II) Institutionalized recipients
    of pace program services.--If a
    beneficiary receiving assistance under
    Medicaid for PACE program services is a
    patient in a hospital, nursing facility,
    intermediate care facility for the
    mentally retarded, or an institution for
    mental diseases, the beneficiary shall
    be treated as in institutionalized
    beneficiary under clause (i).
    ``(2) Authorized representatives.--
    ``(A) In general.--The
    Secretary <>  shall establish
    procedures to allow access to a beneficiary's cash
    benefits by an authorized representative of the eligible
    beneficiary on whose behalf such benefits are paid.
    ``(B) Quality assurance and protection against fraud
    and abuse.--The procedures established under
    subparagraph (A) shall ensure that authorized
    representatives of eligible beneficiaries comply with
    standards of conduct established by the Secretary,
    including standards requiring that such representatives
    provide quality services on behalf of such
    beneficiaries, do not have conflicts of interest, and do
    not misuse benefits paid on behalf of such beneficiaries
    or otherwise engage in fraud or abuse.
    ``(3) Commencement of benefits.--Benefits shall be paid to,
    or on behalf of, an eligible beneficiary beginning with the
    first month in which an application for such benefits is
    approved.
    ``(4) Rollover option for lump-sum payment.--An eligible
    beneficiary may elect to--

    [[Page 840]]

    ``(A) defer payment of their daily or weekly benefit
    and to rollover any such deferred benefits from month-
    to-month, but not from year-to-year; and
    ``(B) receive a lump-sum payment of such deferred
    benefits in an amount that may not exceed the lesser
    of--
    ``(i) the total amount of the accrued deferred
    benefits; or
    ``(ii) the applicable annual benefit.
    ``(5) Period for determination of annual benefits.--
    ``(A) In general.--The applicable period for
    determining with respect to an eligible beneficiary the
    applicable annual benefit and the amount of any accrued
    deferred benefits is the 12-month period that commences
    with the first month in which the beneficiary began to
    receive such benefits, and each 12-month period
    thereafter.
    ``(B) Inclusion of increased benefits.--The
    Secretary shall establish procedures under which cash
    benefits paid to an eligible beneficiary that increase
    or decrease as a result of a change in the functional
    status of the beneficiary before the end of a 12-month
    benefit period shall be included in the determination of
    the applicable annual benefit paid to the eligible
    beneficiary.
    ``(C) Recoupment of unpaid, accrued benefits.--
    ``(i) In general.--The Secretary, in
    coordination with the Secretary of the Treasury,
    shall recoup any accrued benefits in the event
    of--
    ``(I) the death of a beneficiary; or
    ``(II) the failure of a beneficiary
    to elect under paragraph (4)(B) to
    receive such benefits as a lump-sum
    payment before the end of the 12-month
    period in which such benefits accrued.
    ``(ii) Payment into class independence fund.--
    Any benefits recouped in accordance with clause
    (i) shall be paid into the CLASS Independence Fund
    and used in accordance with section 3206.
    ``(6) Requirement to recertify eligibility for receipt of
    benefits.--An eligible beneficiary shall periodically, as
    determined by the Secretary--
    ``(A) recertify by submission of medical evidence
    the beneficiary's continued eligibility for receipt of
    benefits; and
    ``(B) submit records of expenditures attributable to
    the aggregate cash benefit received by the beneficiary
    during the preceding year.
    ``(7) Supplement, not supplant other health care benefits.--
    Subject to the Medicaid payment rules under paragraph (1)(D),
    benefits received by an eligible beneficiary shall supplement,
    but not supplant, other health care benefits for which the
    beneficiary is eligible under Medicaid or any other Federally
    funded program that provides health care benefits or assistance.

    ``(d) <>  Advocacy Services.--An agreement entered
    into under subsection (a)(2)(A)(ii) shall require the Protection and
    Advocacy System for the State to--
    ``(1) assign, as needed, an advocacy counselor to each
    eligible beneficiary that is covered by such agreement and who
    shall provide an eligible beneficiary with--

    [[Page 841]]

    ``(A) information regarding how to access the
    appeals process established for the program;
    ``(B) assistance with respect to the annual
    recertification and notification required under
    subsection (c)(6); and
    ``(C) <>  such other assistance
    with obtaining services as the Secretary, by regulation,
    shall require; and
    ``(2) ensure that the System and such counselors comply with
    the requirements of subsection (h).

    ``(e) <>  Advice and Assistance Counseling.--An
    agreement entered into under subsection (a)(2)(A)(iii) shall require the
    entity to assign, as requested by an eligible beneficiary that is
    covered by such agreement, an advice and assistance counselor who shall
    provide an eligible beneficiary with information regarding--
    ``(1) accessing and coordinating long-term services and
    supports in the most integrated setting;
    ``(2) possible eligibility for other benefits and services;
    ``(3) development of a service and support plan;
    ``(4) information about programs established under the
    Assistive Technology Act of 1998 and the services offered under
    such programs;
    ``(5) available assistance with decision making concerning
    medical care, including the right to accept or refuse medical or
    surgical treatment and the right to formulate advance directives
    or other written instructions recognized under State law, such
    as a living will or durable power of attorney for health care,
    in the case that an injury or illness causes the individual to
    be unable to make health care decisions; and
    ``(6) such other services as the Secretary, by regulation,
    may require.

    ``(f) No Effect on Eligibility for Other Benefits.--Benefits paid to
    an eligible beneficiary under the CLASS program shall be disregarded for
    purposes of determining or continuing the beneficiary's eligibility for
    receipt of benefits under any other Federal, State, or locally funded
    assistance program, including benefits paid under titles II, XVI, XVIII,
    XIX, or XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et
    seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the laws
    administered by the Secretary of Veterans Affairs, under low-income
    housing assistance programs, or under the supplemental nutrition
    assistance program established under the Food and Nutrition Act of 2008
    (7 U.S.C. 2011 et seq.).
    ``(g) Rule of Construction.--Nothing in this title shall be
    construed as prohibiting benefits paid under the CLASS Independence
    Benefit Plan from being used to compensate a family caregiver for
    providing community living assistance services and supports to an
    eligible beneficiary.
    ``(h) <>  Protection Against Conflict of
    Interests.--The Secretary shall establish procedures to ensure that the
    Eligibility Assessment System, the Protection and Advocacy System for a
    State, advocacy counselors for eligible beneficiaries, and any other
    entities that provide services to active enrollees and eligible
    beneficiaries under the CLASS program comply with the following:
    ``(1) If the entity provides counseling or planning
    services, such services are provided in a manner that fosters
    the best interests of the active enrollee or beneficiary.

    [[Page 842]]

    ``(2) The entity has established operating procedures that
    are designed to avoid or minimize conflicts of interest between
    the entity and an active enrollee or beneficiary.
    ``(3) The entity provides information about all services and
    options available to the active enrollee or beneficiary, to the
    best of its knowledge, including services available through
    other entities or providers.
    ``(4) The entity assists the active enrollee or beneficiary
    to access desired services, regardless of the provider.
    ``(5) The entity reports the number of active enrollees and
    beneficiaries provided with assistance by age, disability, and
    whether such enrollees and beneficiaries received services from
    the entity or another entity.
    ``(6) If the entity provides counseling or planning
    services, the entity ensures that an active enrollee or
    beneficiary is informed of any financial interest that the
    entity has in a service provider.
    ``(7) The entity provides an active enrollee or beneficiary
    with a list of available service providers that can meet the
    needs of the active enrollee or beneficiary.

    ``SEC. 3206. <>  CLASS INDEPENDENCE FUND.

    ``(a) Establishment of CLASS Independence Fund.--There is
    established in the Treasury of the United States a trust fund to be
    known as the `CLASS Independence Fund'. The Secretary of the Treasury
    shall serve as Managing Trustee of such Fund. The Fund shall consist of
    all amounts derived from payments into the Fund under sections 3204(f)
    and 3205(c)(5)(C)(ii), and remaining after investment of such amounts
    under subsection (b), including additional amounts derived as income
    from such investments. The amounts held in the Fund are appropriated and
    shall remain available without fiscal year limitation--
    ``(1) to be held for investment on behalf of individuals
    enrolled in the CLASS program;
    ``(2) to pay the administrative expenses related to the Fund
    and to investment under subsection (b); and
    ``(3) to pay cash benefits to eligible beneficiaries under
    the CLASS Independence Benefit Plan.

    ``(b) Investment of Fund Balance.--The Secretary of the Treasury
    shall invest and manage the CLASS Independence Fund in the same manner,
    and to the same extent, as the Federal Supplementary Medical Insurance
    Trust Fund may be invested and managed under subsections (c), (d), and
    (e) of section 1841(d) of the Social Security Act (42 U.S.C. 1395t).
    ``(c) Board of Trustees.--
    ``(1) <>  In general.--With respect to
    the CLASS Independence Fund, there is hereby created a body to
    be known as the Board of Trustees of the CLASS Independence Fund
    (hereinafter in this section referred to as the `Board of
    Trustees') composed of the Secretary of the Treasury, the
    Secretary of Labor, and the Secretary of Health and Human
    Services, all ex officio, and of two members of the public (both
    of whom may not be from the same political party), who shall be
    nominated by the President for a term of 4 years and subject to
    confirmation by the Senate. A member of the Board of Trustees
    serving as a member of the public and nominated and confirmed to
    fill a vacancy occurring during a term shall

    [[Page 843]]

    be nominated and confirmed only for the remainder of such term.
    An individual nominated and confirmed as a member of the public
    may serve in such position after the expiration of such member's
    term until the earlier of the time at which the member's
    successor takes office or the time at which a report of the
    Board is first issued under paragraph (2) after the expiration
    of the member's term. The Secretary of the Treasury shall be the
    Managing Trustee of the Board of Trustees. The Board of Trustees
    shall meet not less frequently than once each calendar year. A
    person serving on the Board of Trustees shall not be considered
    to be a fiduciary and shall not be personally liable for actions
    taken in such capacity with respect to the Trust Fund.
    ``(2) Duties.--
    ``(A) In general.--It shall be the duty of the Board
    of Trustees to do the following:
    ``(i) Hold the CLASS Independence Fund.
    ``(ii) <>  Report to
    the Congress not later than the first day of April
    of each year on the operation and status of the
    CLASS Independence Fund during the preceding
    fiscal year and on its expected operation and
    status during the current fiscal year and the next
    2 fiscal years.
    ``(iii) <>  Report immediately
    to the Congress whenever the Board is of the
    opinion that the amount of the CLASS Independence
    Fund is not actuarially sound in regards to the
    projection under section 3203(b)(1)(B)(i).
    ``(iv) Review the general policies followed in
    managing the CLASS Independence Fund, and
    recommend changes in such policies, including
    necessary changes in the provisions of law which
    govern the way in which the CLASS Independence
    Fund is to be managed.
    ``(B) Report.--The report provided for in
    subparagraph (A)(ii) shall--
    ``(i) include--
    ``(I) a statement of the assets of,
    and the disbursements made from, the
    CLASS Independence Fund during the
    preceding fiscal year;
    ``(II) an estimate of the expected
    income to, and disbursements to be made
    from, the CLASS Independence Fund during
    the current fiscal year and each of the
    next 2 fiscal years;
    ``(III) a statement of the actuarial
    status of the CLASS Independence Fund
    for the current fiscal year, each of the
    next 2 fiscal years, and as projected
    over the 75-year period beginning with
    the current fiscal year; and
    ``(IV) an actuarial opinion by the
    Chief Actuary of the Centers for
    Medicare & Medicaid Services certifying
    that the techniques and methodologies
    used are generally accepted within the
    actuarial profession and that the
    assumptions and cost estimates used are
    reasonable; and
    ``(ii) <>  be printed as a
    House document of the session of the Congress to
    which the report is made.

    [[Page 844]]

    ``(C) <>  Recommendations.--If
    the Board of Trustees determines that enrollment trends
    and expected future benefit claims on the CLASS
    Independence Fund are not actuarially sound in regards
    to the projection under section 3203(b)(1)(B)(i) and are
    unlikely to be resolved with reasonable premium
    increases or through other means, the Board of Trustees
    shall include in the report provided for in subparagraph
    (A)(ii) recommendations for such legislative action as
    the Board of Trustees determine to be appropriate,
    including whether to adjust monthly premiums or impose a
    temporary moratorium on new enrollments.

    ``SEC. 3207. <>  CLASS INDEPENDENCE ADVISORY
    COUNCIL.

    ``(a) Establishment.--There is hereby created an Advisory Committee
    to be known as the `CLASS Independence Advisory Council'.
    ``(b) Membership.--
    ``(1) In general.--The CLASS Independence Advisory Council
    shall be composed of not more than 15 individuals, not otherwise
    in the employ of the United States--
    ``(A) <>  who shall
    be appointed by the President without regard to the
    civil service laws and regulations; and
    ``(B) a majority of whom shall be representatives of
    individuals who participate or are likely to participate
    in the CLASS program, and shall include representatives
    of older and younger workers, individuals with
    disabilities, family caregivers of individuals who
    require services and supports to maintain their
    independence at home or in another residential setting
    of their choice in the community, individuals with
    expertise in long-term care or disability insurance,
    actuarial science, economics, and other relevant
    disciplines, as determined by the Secretary.
    ``(2) Terms.--
    ``(A) In general.--The members of the CLASS
    Independence Advisory Council shall serve overlapping
    terms of 3 years (unless appointed to fill a vacancy
    occurring prior to the expiration of a term, in which
    case the individual shall serve for the remainder of the
    term).
    ``(B) Limitation.--A member shall not be eligible to
    serve for more than 2 consecutive terms.
    ``(3) <>  Chair.--The
    President shall, from time to time, appoint one of the members
    of the CLASS Independence Advisory Council to serve as the
    Chair.

    ``(c) Duties.--The CLASS Independence Advisory Council shall advise
    the Secretary on matters of general policy in the administration of the
    CLASS program established under this title and in the formulation of
    regulations under this title including with respect to--
    ``(1) the development of the CLASS Independence Benefit Plan
    under section 3203;
    ``(2) the determination of monthly premiums under such plan;
    and
    ``(3) the financial solvency of the program.

    ``(d) Application of FACA.--The Federal Advisory Committee Act (5
    U.S.C. App.), other than section 14 of that Act, shall apply to the
    CLASS Independence Advisory Council.
    ``(e) Authorization of Appropriations.--

    [[Page 845]]

    ``(1) In general.--There are authorized to be appropriated
    to the CLASS Independence Advisory Council to carry out its
    duties under this section, such sums as may be necessary for
    fiscal year 2011 and for each fiscal year thereafter.
    ``(2) Availability.--Any sums appropriated under the
    authorization contained in this section shall remain available,
    without fiscal year limitation, until expended.

    ``SEC. 3208. <>  SOLVENCY AND FISCAL
    INDEPENDENCE; REGULATIONS; ANNUAL REPORT.

    ``(a) <>  Solvency.--The Secretary shall
    regularly consult with the Board of Trustees of the CLASS Independence
    Fund and the CLASS Independence Advisory Council, for purposes of
    ensuring that enrollees premiums are adequate to ensure the financial
    solvency of the CLASS program, both with respect to fiscal years
    occurring in the near-term and fiscal years occurring over 20- and 75-
    year periods, taking into account the projections required for such
    periods under subsections (a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.

    ``(b) No Taxpayer Funds Used To Pay Benefits.--No taxpayer funds
    shall be used for payment of benefits under a CLASS Independent Benefit
    Plan. <>  For purposes of this subsection, the term
    `taxpayer funds' means any Federal funds from a source other than
    premiums deposited by CLASS program participants in the CLASS
    Independence Fund and any associated interest earnings.

    ``(c) Regulations.--The Secretary shall promulgate such regulations
    as are necessary to carry out the CLASS program in accordance with this
    title. Such regulations shall include provisions to prevent fraud and
    abuse under the program.
    ``(d) <>  Annual Report.--Beginning January
    1, 2014, the Secretary shall submit an annual report to Congress on the
    CLASS program. Each report shall include the following:
    ``(1) The total number of enrollees in the program.
    ``(2) The total number of eligible beneficiaries during the
    fiscal year.
    ``(3) The total amount of cash benefits provided during the
    fiscal year.
    ``(4) A description of instances of fraud or abuse
    identified during the fiscal year.
    ``(5) Recommendations for such administrative or legislative
    action as the Secretary determines is necessary to improve the
    program, ensure the solvency of the program, or to prevent the
    occurrence of fraud or abuse.

    ``SEC. 3209. <>  INSPECTOR GENERAL'S REPORT.

    ``The Inspector General of the Department of Health and Human
    Services shall submit an annual report to the Secretary and Congress
    relating to the overall progress of the CLASS program and of the
    existence of waste, fraud, and abuse in the CLASS program. Each such
    report shall include findings in the following areas:
    ``(1) The eligibility determination process.
    ``(2) The provision of cash benefits.
    ``(3) Quality assurance and protection against waste, fraud,
    and abuse.
    ``(4) Recouping of unpaid and accrued benefits.

    [[Page 846]]

    ``SEC. 3210. <>  TAX TREATMENT OF PROGRAM.

    ``The CLASS program shall be treated for purposes of the Internal
    Revenue Code of 1986 in the same manner as a qualified long-term care
    insurance contract for qualified long-term care services.''.
    (2) Conforming amendments to medicaid.--Section 1902(a) of
    the Social Security Act (42 U.S.C. 1396a(a)), as amended by
    section 6505, is amended by inserting after paragraph (80) the
    following:
    ``(81) <>  provide that the State will
    comply with such regulations regarding the application of
    primary and secondary payor rules with respect to individuals
    who are eligible for medical assistance under this title and are
    eligible beneficiaries under the CLASS program established under
    title XXXII of the Public Health Service Act as the Secretary
    shall establish; and''.

    (b) Assurance of Adequate Infrastructure for the Provision of
    Personal Care Attendant Workers.--Section 1902(a) of the Social Security
    Act (42 U.S.C. 1396a(a)), as amended by subsection (a)(2), is amended by
    inserting after paragraph (81) the following:
    ``(82) <>  provide that, not later than 2
    years after the date of enactment of the Community Living
    Assistance Services and Supports Act, each State shall--
    ``(A) assess the extent to which entities such as
    providers of home care, home health services, home and
    community service providers, public authorities created
    to provide personal care services to individuals
    eligible for medical assistance under the State plan,
    and nonprofit organizations, are serving or have the
    capacity to serve as fiscal agents for, employers of,
    and providers of employment-related benefits for,
    personal care attendant workers who provide personal
    care services to individuals receiving benefits under
    the CLASS program established under title XXXII of the
    Public Health Service Act, including in rural and
    underserved areas;
    ``(B) <>  designate or create
    such entities to serve as fiscal agents for, employers
    of, and providers of employment-related benefits for,
    such workers to ensure an adequate supply of the workers
    for individuals receiving benefits under the CLASS
    program, including in rural and underserved areas; and
    ``(C) ensure that the designation or creation of
    such entities will not negatively alter or impede
    existing programs, models, methods, or administration of
    service delivery that provide for consumer controlled or
    self-directed home and community services and further
    ensure that such entities will not impede the ability of
    individuals to direct and control their home and
    community services, including the ability to select,
    manage, dismiss, co-employ, or employ such workers or
    inhibit such individuals from relying on family members
    for the provision of personal care services.''.

    (c) <>  Personal Care Attendants Workforce
    Advisory Panel.--
    (1) <>  Establishment.--Not later than 90
    days after the date of enactment of this Act, the Secretary of
    Health and Human Services shall establish a Personal Care
    Attendants Workforce

    [[Page 847]]

    Advisory Panel for the purpose of examining and advising the
    Secretary and Congress on workforce issues related to personal
    care attendant workers, including with respect to the adequacy
    of the number of such workers, the salaries, wages, and benefits
    of such workers, and access to the services provided by such
    workers.
    (2) Membership.--In appointing members to the Personal Care
    Attendants Workforce Advisory Panel, the Secretary shall ensure
    that such members include the following:
    (A) Individuals with disabilities of all ages.
    (B) Senior individuals.
    (C) Representatives of individuals with
    disabilities.
    (D) Representatives of senior individuals.
    (E) Representatives of workforce and labor
    organizations.
    (F) Representatives of home and community-based
    service providers.
    (G) Representatives of assisted living providers.

    (d) Inclusion of Information on Supplemental Coverage in the
    National Clearinghouse for Long-term Care Information; Extension of
    Funding.--Section 6021(d) of the Deficit Reduction Act of 2005 (42
    U.S.C. 1396p note) is amended--
    (1) in paragraph (2)(A)--
    (A) in clause (ii), by striking ``and'' at the end;
    (B) in clause (iii), by striking the period at the
    end and inserting ``; and''; and
    (C) by adding at the end the following:
    ``(iv) include information regarding the CLASS
    program established under title XXXII of the
    Public Health Service Act and coverage available
    for purchase through a Exchange established under
    section 1311 of the Patient Protection and
    Affordable Care Act that is supplemental coverage
    to the benefits provided under a CLASS
    Independence Benefit Plan under that program, and
    information regarding how benefits provided under
    a CLASS Independence Benefit Plan differ from
    disability insurance benefits.''; and
    (2) in paragraph (3), by striking ``2010'' and inserting
    ``2015''.

    (e) <>  Effective Date.--The amendments
    made by subsections (a), (b), and (d) take effect on January 1, 2011.

    (f) <>  Rule of Construction.--Nothing in
    this title or the amendments made by this title are intended to replace
    or displace public or private disability insurance benefits, including
    such benefits that are for income replacement.

    TITLE IX--REVENUE PROVISIONS

    Subtitle A--Revenue Offset Provisions

    SEC. 9001. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH COVERAGE.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986, as
    amended by section 1513, is amended by adding at the end the following:

    [[Page 848]]

    ``SEC. 4980I. <>  EXCISE TAX ON HIGH COST EMPLOYER-
    SPONSORED HEALTH COVERAGE.

    ``(a) Imposition of Tax.--If--
    ``(1) an employee is covered under any applicable employer-
    sponsored coverage of an employer at any time during a taxable
    period, and
    ``(2) there is any excess benefit with respect to the
    coverage,

    there is hereby imposed a tax equal to 40 percent of the excess benefit.
    ``(b) Excess Benefit.--For purposes of this section--
    ``(1) <>  In general.--The term `excess
    benefit' means, with respect to any applicable employer-
    sponsored coverage made available by an employer to an employee
    during any taxable period, the sum of the excess amounts
    determined under paragraph (2) for months during the taxable
    period.
    ``(2) Monthly excess amount.--The excess amount determined
    under this paragraph for any month is the excess (if any) of--
    ``(A) the aggregate cost of the applicable employer-
    sponsored coverage of the employee for the month, over
    ``(B) an amount equal to \1/12\ of the annual
    limitation under paragraph (3) for the calendar year in
    which the month occurs.
    ``(3) Annual limitation.--For purposes of this subsection--
    ``(A) In general.--The annual limitation under this
    paragraph for any calendar year is the dollar limit
    determined under subparagraph (C) for the calendar year.
    ``(B) Applicable annual limitation.--The annual
    limitation which applies for any month shall be
    determined on the basis of the type of coverage (as
    determined under subsection (f)(1)) provided to the
    employee by the employer as of the beginning of the
    month.
    ``(C) Applicable dollar limit.--Except as provided
    in subparagraph (D)--
    ``(i) 2013.--In the case of 2013, the dollar
    limit under this subparagraph is--
    ``(I) in the case of an employee
    with self-only coverage, $8,500, and
    ``(II) in the case of an employee
    with coverage other than self-only
    coverage, $23,000.
    ``(ii) Exception for certain individuals.--In
    the case of an individual who is a qualified
    retiree or who participates in a plan sponsored by
    an employer the majority of whose employees are
    engaged in a high-risk profession or employed to
    repair or install electrical or telecommunications
    lines--
    ``(I) the dollar amount in clause
    (i)(I) (determined after the application
    of subparagraph (D)) shall be increased
    by $1,350, and
    ``(II) the dollar amount in clause
    (i)(II) (determined after the
    application of subparagraph (D)) shall
    be increased by $3,000.
    ``(iii) Subsequent years.--In the case of any
    calendar year after 2013, each of the dollar
    amounts under clauses (i) and (ii) shall be
    increased to the amount equal to such amount as in
    effect for the

    [[Page 849]]

    calendar year preceding such year, increased by an
    amount equal to the product of--
    ``(I) such amount as so in effect,
    multiplied by
    ``(II) the cost-of-living adjustment
    determined under section 1(f)(3) for
    such year (determined by substituting
    the calendar year that is 2 years before
    such year for `1992' in subparagraph (B)
    thereof), increased by 1 percentage
    point.
    If any amount determined under this clause is not
    a multiple of $50, such amount shall be rounded to
    the nearest multiple of $50.
    ``(D) Transition rule for states with highest
    coverage costs.--
    ``(i) In general.--If an employee is a
    resident of a high cost State on the first day of
    any month beginning in 2013, 2014, or 2015, the
    annual limitation under this paragraph for such
    month with respect to such employee shall be an
    amount equal to the applicable percentage of the
    annual limitation (determined without regard to
    this subparagraph or subparagraph (C)(ii)).
    ``(ii) Applicable percentage.--The applicable
    percentage is 120 percent for 2013, 110 percent
    for 2014, and 105 percent for 2015.
    ``(iii) <>  High cost
    state.--The term `high cost State' means each of
    the 17 States which the Secretary of Health and
    Human Services, in consultation with the
    Secretary, estimates had the highest average cost
    during 2012 for employer-sponsored coverage under
    health plans. The Secretary's estimate shall be
    made on the basis of aggregate premiums paid in
    the State for such health plans, determined using
    the most recent data available as of August 31,
    2012.

    ``(c) Liability To Pay Tax.--
    ``(1) In general.--Each coverage provider shall pay the tax
    imposed by subsection (a) on its applicable share of the excess
    benefit with respect to an employee for any taxable period.
    ``(2) <>  Coverage provider.--For
    purposes of this subsection, the term `coverage provider' means
    each of the following:
    ``(A) Health insurance coverage.--If the applicable
    employer-sponsored coverage consists of coverage under a
    group health plan which provides health insurance
    coverage, the health insurance issuer.
    ``(B) HSA and msa contributions.--If the applicable
    employer-sponsored coverage consists of coverage under
    an arrangement under which the employer makes
    contributions described in subsection (b) or (d) of
    section 106, the employer.
    ``(C) Other coverage.--In the case of any other
    applicable employer-sponsored coverage, the person that
    administers the plan benefits.
    ``(3) Applicable share.--For purposes of this subsection, a
    coverage provider's applicable share of an excess benefit for
    any taxable period is the amount which bears the same ratio to
    the amount of such excess benefit as--

    [[Page 850]]

    ``(A) the cost of the applicable employer-sponsored
    coverage provided by the provider to the employee during
    such period, bears to
    ``(B) the aggregate cost of all applicable employer-
    sponsored coverage provided to the employee by all
    coverage providers during such period.
    ``(4) Responsibility to calculate tax and applicable
    shares.--
    ``(A) In general.--Each employer shall--
    ``(i) calculate for each taxable period the
    amount of the excess benefit subject to the tax
    imposed by subsection (a) and the applicable share
    of such excess benefit for each coverage provider,
    and
    ``(ii) <>  notify, at
    such time and in such manner as the Secretary may
    prescribe, the Secretary and each coverage
    provider of the amount so determined for the
    provider.
    ``(B) Special rule for multiemployer plans.--In the
    case of applicable employer-sponsored coverage made
    available to employees through a multiemployer plan (as
    defined in section 414(f)), the plan sponsor shall make
    the calculations, and provide the notice, required under
    subparagraph (A).

    ``(d) Applicable Employer-Sponsored Coverage; Cost.--For purposes of
    this section--
    ``(1) Applicable employer-sponsored coverage.--
    ``(A) <>  In general.--The term
    `applicable employer-sponsored coverage' means, with
    respect to any employee, coverage under any group health
    plan made available to the employee by an employer which
    is excludable from the employee's gross income under
    section 106, or would be so excludable if it were
    employer-provided coverage (within the meaning of such
    section 106).
    ``(B) Exceptions.--The term `applicable employer-
    sponsored coverage' shall not include--
    ``(i) any coverage (whether through insurance
    or otherwise) described in section 9832(c)(1)(A)
    or for long-term care, or
    ``(ii) any coverage described in section
    9832(c)(3) the payment for which is not excludable
    from gross income and for which a deduction under
    section 162(l) is not allowable.
    ``(C) Coverage includes employee paid portion.--
    Coverage shall be treated as applicable employer-
    sponsored coverage without regard to whether the
    employer or employee pays for the coverage.
    ``(D) Self-employed individual.--In the case of an
    individual who is an employee within the meaning of
    section 401(c)(1), coverage under any group health plan
    providing health insurance coverage shall be treated as
    applicable employer-sponsored coverage if a deduction is
    allowable under section 162(l) with respect to all or
    any portion of the cost of the coverage.
    ``(E) Governmental plans included.--Applicable
    employer-sponsored coverage shall include coverage under
    any group health plan established and maintained
    primarily for its civilian employees by the Government
    of

    [[Page 851]]

    the United States, by the government of any State or
    political subdivision thereof, or by any agency or
    instrumentality of any such government.
    ``(2) Determination of cost.--
    ``(A) In general.--The cost of applicable employer-
    sponsored coverage shall be determined under rules
    similar to the rules of section 4980B(f)(4), except that
    in determining such cost, any portion of the cost of
    such coverage which is attributable to the tax imposed
    under this section shall not be taken into account and
    the amount of such cost shall be calculated separately
    for self-only coverage and other coverage. In the case
    of applicable employer-sponsored coverage which provides
    coverage to retired employees, the plan may elect to
    treat a retired employee who has not attained the age of
    65 and a retired employee who has attained the age of 65
    as similarly situated beneficiaries.
    ``(B) Health fsas.--In the case of applicable
    employer-sponsored coverage consisting of coverage under
    a flexible spending arrangement (as defined in section
    106(c)(2)), the cost of the coverage shall be equal to
    the sum of--
    ``(i) the amount of employer contributions
    under any salary reduction election under the
    arrangement, plus
    ``(ii) the amount determined under
    subparagraph (A) with respect to any reimbursement
    under the arrangement in excess of the
    contributions described in clause (i).
    ``(C) Archer msas and hsas.--In the case of
    applicable employer-sponsored coverage consisting of
    coverage under an arrangement under which the employer
    makes contributions described in subsection (b) or (d)
    of section 106, the cost of the coverage shall be equal
    to the amount of employer contributions under the
    arrangement.
    ``(D) Allocation on a monthly basis.--If cost is
    determined on other than a monthly basis, the cost shall
    be allocated to months in a taxable period on such basis
    as the Secretary may prescribe.

    ``(e) Penalty for Failure To Properly Calculate Excess Benefit.--
    ``(1) In general.--If, for any taxable period, the tax
    imposed by subsection (a) exceeds the tax determined under such
    subsection with respect to the total excess benefit calculated
    by the employer or plan sponsor under subsection (c)(4)--
    ``(A) each coverage provider shall pay the tax on
    its applicable share (determined in the same manner as
    under subsection (c)(4)) of the excess, but no penalty
    shall be imposed on the provider with respect to such
    amount, and
    ``(B) the employer or plan sponsor shall, in
    addition to any tax imposed by subsection (a), pay a
    penalty in an amount equal to such excess, plus interest
    at the underpayment rate determined under section 6621
    for the period beginning on the due date for the payment
    of tax imposed by subsection (a) to which the excess
    relates and ending on the date of payment of the
    penalty.

    [[Page 852]]

    ``(2) Limitations on penalty.--
    ``(A) Penalty not to apply where failure not
    discovered exercising reasonable diligence.--No penalty
    shall be imposed by paragraph (1)(B) on any failure to
    properly calculate the excess benefit during any period
    for which it is established to the satisfaction of the
    Secretary that the employer or plan sponsor neither
    knew, nor exercising reasonable diligence would have
    known, that such failure existed.
    ``(B) Penalty not to apply to failures corrected
    within 30 days.--No penalty shall be imposed by
    paragraph (1)(B) on any such failure if--
    ``(i) such failure was due to reasonable cause
    and not to willful neglect, and
    ``(ii) such failure is corrected during the
    30-day period beginning on the 1st date that the
    employer knew, or exercising reasonable diligence
    would have known, that such failure existed.
    ``(C) Waiver by secretary.--In the case of any such
    failure which is due to reasonable cause and not to
    willful neglect, the Secretary may waive part or all of
    the penalty imposed by paragraph (1), to the extent that
    the payment of such penalty would be excessive or
    otherwise inequitable relative to the failure involved.

    ``(f) Other Definitions and Special Rules.--For purposes of this
    section--
    ``(1) Coverage determinations.--
    ``(A) In general.--Except as provided in
    subparagraph (B), an employee shall be treated as having
    self-only coverage with respect to any applicable
    employer-sponsored coverage of an employer.
    ``(B) Minimum essential coverage.--An employee shall
    be treated as having coverage other than self-only
    coverage only if the employee is enrolled in coverage
    other than self-only coverage in a group health plan
    which provides minimum essential coverage (as defined in
    section 5000A(f)) to the employee and at least one other
    beneficiary, and the benefits provided under such
    minimum essential coverage do not vary based on whether
    any individual covered under such coverage is the
    employee or another beneficiary.
    ``(2) Qualified retiree.--The term `qualified retiree' means
    any individual who--
    ``(A) is receiving coverage by reason of being a
    retiree,
    ``(B) has attained age 55, and
    ``(C) is not entitled to benefits or eligible for
    enrollment under the Medicare program under title XVIII
    of the Social Security Act.
    ``(3) Employees engaged in high-risk profession.--The term
    `employees engaged in a high-risk profession' means law
    enforcement officers (as such term is defined in section 1204 of
    the Omnibus Crime Control and Safe Streets Act of 1968),
    employees in fire protection activities (as such term is defined
    in section 3(y) of the Fair Labor Standards Act of 1938),
    individuals who provide out-of-hospital emergency medical care
    (including emergency medical technicians, paramedics, and first-
    responders), and individuals engaged in the construction,

    [[Page 853]]

    mining, agriculture (not including food processing), forestry,
    and fishing industries. Such term includes an employee who is
    retired from a high-risk profession described in the preceding
    sentence, if such employee satisfied the requirements of such
    sentence for a period of not less than 20 years during the
    employee's employment.
    ``(4) Group health plan.--The term `group health plan' has
    the meaning given such term by section 5000(b)(1).
    ``(5) Health insurance coverage; health insurance issuer.--
    ``(A) Health insurance coverage.--The term `health
    insurance coverage' has the meaning given such term by
    section 9832(b)(1) (applied without regard to
    subparagraph (B) thereof, except as provided by the
    Secretary in regulations).
    ``(B) Health insurance issuer.--The term `health
    insurance issuer' has the meaning given such term by
    section 9832(b)(2).
    ``(6) Person that administers the plan benefits.--The term
    `person that administers the plan benefits' shall include the
    plan sponsor if the plan sponsor administers benefits under the
    plan.
    ``(7) Plan sponsor.--The term `plan sponsor' has the meaning
    given such term in section 3(16)(B) of the Employee Retirement
    Income Security Act of 1974.
    ``(8) Taxable period.--The term `taxable period' means the
    calendar year or such shorter period as the Secretary may
    prescribe. The Secretary may have different taxable periods for
    employers of varying sizes.
    ``(9) Aggregation rules.--All employers treated as a single
    employer under subsection (b), (c), (m), or (o) of section 414
    shall be treated as a single employer.
    ``(10) Denial of deduction.--For denial of a deduction for
    the tax imposed by this section, see section 275(a)(6).

    ``(g) Regulations.--The Secretary shall prescribe such regulations
    as may be necessary to carry out this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of
    such Code, as amended by section 1513, is amended by adding at the end
    the following new item:

    ``Sec. 4980I. Excise tax on high cost employer-sponsored health
    coverage.''.

    (c) <>  Effective Date.--The amendments
    made by this section shall apply to taxable years beginning after
    December 31, 2012.

    SEC. 9002. INCLUSION OF COST OF EMPLOYER-SPONSORED HEALTH COVERAGE ON W-
    2.

    (a) In General.--Section 6051(a) of the Internal Revenue Code of
    1986 <>  (relating to receipts for employees) is
    amended by striking ``and'' at the end of paragraph (12), by striking
    the period at the end of paragraph (13) and inserting ``, and'', and by
    adding after paragraph (13) the following new paragraph:
    ``(14) the aggregate cost (determined under rules similar to
    the rules of section 4980B(f)(4)) of applicable employer-
    sponsored coverage (as defined in section 4980I(d)(1)), except
    that this paragraph shall not apply to--
    ``(A) coverage to which paragraphs (11) and (12)
    apply, or

    [[Page 854]]

    ``(B) the amount of any salary reduction
    contributions to a flexible spending arrangement (within
    the meaning of section 125).''.

    (b) <>  Effective Date.--The amendments
    made by this section shall apply to taxable years beginning after
    December 31, 2010.

    SEC. 9003. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED
    DRUG OR INSULIN.

    (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal
    Revenue Code of 1986 <>  is amended by adding at the
    end the following: ``Such term shall include an amount paid for medicine
    or a drug only if such medicine or drug is a prescribed drug (determined
    without regard to whether such drug is available without a prescription)
    or is insulin.''.

    (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of the
    Internal Revenue Code of 1986 <>  is amended by
    adding at the end the following: ``Such term shall include an amount
    paid for medicine or a drug only if such medicine or drug is a
    prescribed drug (determined without regard to whether such drug is
    available without a prescription) or is insulin.''.

    (c) Health Flexible Spending Arrangements and Health Reimbursement
    Arrangements.--Section 106 of the Internal Revenue Code of
    1986 <>  is amended by adding at the end the
    following new subsection:

    ``(f) Reimbursements for Medicine Restricted to Prescribed Drugs and
    Insulin.--For purposes of this section and section 105, reimbursement
    for expenses incurred for a medicine or a drug shall be treated as a
    reimbursement for medical expenses only if such medicine or drug is a
    prescribed drug (determined without regard to whether such drug is
    available without a prescription) or is insulin.''.
    (d) Effective Dates.--
    (1) <>  Distributions from savings
    accounts.--The amendments made by subsections (a) and (b) shall
    apply to amounts paid with respect to taxable years beginning
    after December 31, 2010.
    (2) <>  Reimbursements.--The
    amendment made by subsection (c) shall apply to expenses
    incurred with respect to taxable years beginning after December
    31, 2010.

    SEC. 9004. INCREASE IN ADDITIONAL TAX ON DISTRIBUTIONS FROM HSAS AND
    ARCHER MSAS NOT USED FOR QUALIFIED MEDICAL EXPENSES.

    (a) HSAs.--Section 223(f)(4)(A) of the Internal Revenue Code of 1986
    is amended by striking ``10 percent'' and inserting ``20 percent''.
    (b) Archer MSAs.--Section 220(f)(4)(A) of the Internal Revenue Code
    of 1986 is amended by striking ``15 percent'' and inserting ``20
    percent''.
    (c) <>  Effective Date.--The amendments made
    by this section shall apply to distributions made after December 31,
    2010.

    SEC. 9005. LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER
    CAFETERIA PLANS.

    (a) In General.--Section 125 of the Internal Revenue Code of
    1986 <>  is amended--
    (1) by redesignating subsections (i) and (j) as subsections
    (j) and (k), respectively, and

    [[Page 855]]

    (2) by inserting after subsection (h) the following new
    subsection:

    ``(i) Limitation on Health Flexible Spending Arrangements.--For
    purposes of this section, if a benefit is provided under a cafeteria
    plan through employer contributions to a health flexible spending
    arrangement, such benefit shall not be treated as a qualified benefit
    unless the cafeteria plan provides that an employee may not elect for
    any taxable year to have salary reduction contributions in excess of
    $2,500 made to such arrangement.''.
    (b) <>  Effective Date.--The amendments made
    by this section shall apply to taxable years beginning after December
    31, 2010.

    SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

    (a) In General.--Section 6041 of the Internal Revenue Code of
    1986 <>  is amended by adding at the end the
    following new subsections:

    ``(h) Application to Corporations.--Notwithstanding any regulation
    prescribed by the Secretary before the date of the enactment of this
    subsection, for purposes of this section the term `person' includes any
    corporation that is not an organization exempt from tax under section
    501(a).
    ``(i) Regulations.--The Secretary may prescribe such regulations and
    other guidance as may be appropriate or necessary to carry out the
    purposes of this section, including rules to prevent duplicative
    reporting of transactions.''.
    (b) Payments for Property and Other Gross Proceeds.--Subsection (a)
    of section 6041 of the Internal Revenue Code of 1986 is amended--
    (1) by inserting ``amounts in consideration for property,''
    after ``wages,'',
    (2) by inserting ``gross proceeds,'' after ``emoluments, or
    other'', and
    (3) by inserting ``gross proceeds,'' after ``setting forth
    the amount of such''.

    (c) Effective Date.--The amendments made by this section shall apply
    to payments made after December 31, 2011.

    SEC. 9007. ADDITIONAL REQUIREMENTS FOR CHARITABLE HOSPITALS.

    (a) Requirements To Qualify as Section 501(c)(3) Charitable Hospital
    Organization.--Section 501 of the Internal Revenue Code of
    1986 <>  (relating to exemption from tax on
    corporations, certain trusts, etc.) is amended by redesignating
    subsection (r) as subsection (s) and by inserting after subsection (q)
    the following new subsection:

    ``(r) Additional Requirements for Certain Hospitals.--
    ``(1) <>  In general.--A hospital
    organization to which this subsection applies shall not be
    treated as described in subsection (c)(3) unless the
    organization--
    ``(A) meets the community health needs assessment
    requirements described in paragraph (3),
    ``(B) meets the financial assistance policy
    requirements described in paragraph (4),
    ``(C) meets the requirements on charges described in
    paragraph (5), and
    ``(D) meets the billing and collection requirement
    described in paragraph (6).
    ``(2) Hospital organizations to which subsection applies.--

    [[Page 856]]

    ``(A) In general.--This subsection shall apply to--
    ``(i) an organization which operates a
    facility which is required by a State to be
    licensed, registered, or similarly recognized as a
    hospital, and
    ``(ii) any other organization which the
    Secretary determines has the provision of hospital
    care as its principal function or purpose
    constituting the basis for its exemption under
    subsection (c)(3) (determined without regard to
    this subsection).
    ``(B) Organizations with more than 1 hospital
    facility.--If a hospital organization operates more than
    1 hospital facility--
    ``(i) the organization shall meet the
    requirements of this subsection separately with
    respect to each such facility, and
    ``(ii) the organization shall not be treated
    as described in subsection (c)(3) with respect to
    any such facility for which such requirements are
    not separately met.
    ``(3) Community health needs assessments.--
    ``(A) In general.--An organization meets the
    requirements of this paragraph with respect to any
    taxable year only if the organization--
    ``(i) has conducted a community health needs
    assessment which meets the requirements of
    subparagraph (B) in such taxable year or in either
    of the 2 taxable years immediately preceding such
    taxable year, and
    ``(ii) has adopted an implementation strategy
    to meet the community health needs identified
    through such assessment.
    ``(B) Community health needs assessment.--A
    community health needs assessment meets the requirements
    of this paragraph if such community health needs
    assessment--
    ``(i) takes into account input from persons
    who represent the broad interests of the community
    served by the hospital facility, including those
    with special knowledge of or expertise in public
    health, and
    ``(ii) <>  is made
    widely available to the public.
    ``(4) Financial assistance policy.--An organization meets
    the requirements of this paragraph if the organization
    establishes the following policies:
    ``(A) Financial assistance policy.--A written
    financial assistance policy which includes--
    ``(i) eligibility criteria for financial
    assistance, and whether such assistance includes
    free or discounted care,
    ``(ii) the basis for calculating amounts
    charged to patients,
    ``(iii) the method for applying for financial
    assistance,
    ``(iv) in the case of an organization which
    does not have a separate billing and collections
    policy, the actions the organization may take in
    the event of non-payment, including collections
    action and reporting to credit agencies, and

    [[Page 857]]

    ``(v) measures to widely publicize the policy
    within the community to be served by the
    organization.
    ``(B) Policy relating to emergency medical care.--A
    written policy requiring the organization to provide,
    without discrimination, care for emergency medical
    conditions (within the meaning of section 1867 of the
    Social Security Act (42 U.S.C. 1395dd)) to individuals
    regardless of their eligibility under the financial
    assistance policy described in subparagraph (A).
    ``(5) Limitation on charges.--An organization meets the
    requirements of this paragraph if the organization--
    ``(A) limits amounts charged for emergency or other
    medically necessary care provided to individuals
    eligible for assistance under the financial assistance
    policy described in paragraph (4)(A) to not more than
    the lowest amounts charged to individuals who have
    insurance covering such care, and
    ``(B) prohibits the use of gross charges.
    ``(6) Billing and collection requirements.--An organization
    meets the requirement of this paragraph only if the organization
    does not engage in extraordinary collection actions before the
    organization has made reasonable efforts to determine whether
    the individual is eligible for assistance under the financial
    assistance policy described in paragraph (4)(A).
    ``(7) <>  Regulatory
    authority.--The Secretary shall issue such regulations and
    guidance as may be necessary to carry out the provisions of this
    subsection, including guidance relating to what constitutes
    reasonable efforts to determine the eligibility of a patient
    under a financial assistance policy for purposes of paragraph
    (6).''.

    (b) Excise Tax for Failures To Meet Hospital Exemption
    Requirements.--
    (1) In general.--Subchapter D of chapter 42 of the Internal
    Revenue Code of 1986 (relating to failure by certain charitable
    organizations to meet certain qualification requirements) is
    amended by adding at the end the following new section:

    ``SEC. 4959. <>  TAXES ON FAILURES BY HOSPITAL
    ORGANIZATIONS.

    ``If a hospital organization to which section 501(r) applies fails
    to meet the requirement of section 501(r)(3) for any taxable year, there
    is imposed on the organization a tax equal to $50,000.''.
    (2) Conforming amendment.--The table of sections for
    subchapter D of chapter 42 of such Code is amended by adding at
    the end the following new item:

    ``Sec. 4959. Taxes on failures by hospital organizations.''.

    (c) <>  Mandatory Review of Tax Exemption
    for Hospitals.--The Secretary <>  of the Treasury or
    the Secretary's delegate shall review at least once every 3 years the
    community benefit activities of each hospital organization to which
    section 501(r) of the Internal Revenue Code of 1986 (as added by this
    section) applies.

    (d) Additional Reporting Requirements.--
    (1) Community health needs assessments and audited financial
    statements.--Section 6033(b) of the Internal Revenue Code of
    1986 <>  (relating to certain organizations
    described in section 501(c)(3)) is amended by striking ``and''
    at the end

    [[Page 858]]

    of paragraph (14), by redesignating paragraph (15) as paragraph
    (16), and by inserting after paragraph (14) the following new
    paragraph:
    ``(15) in the case of an organization to which the
    requirements of section 501(r) apply for the taxable year--
    ``(A) a description of how the organization is
    addressing the needs identified in each community health
    needs assessment conducted under section 501(r)(3) and a
    description of any such needs that are not being
    addressed together with the reasons why such needs are
    not being addressed, and
    ``(B) the audited financial statements of such
    organization (or, in the case of an organization the
    financial statements of which are included in a
    consolidated financial statement with other
    organizations, such consolidated financial
    statement).''.
    (2) Taxes.--Section 6033(b)(10) of such Code is amended by
    striking ``and'' at the end of subparagraph (B), by inserting
    ``and'' at the end of subparagraph (C), and by adding at the end
    the following new subparagraph:
    ``(D) section 4959 (relating to taxes on failures by
    hospital organizations),''.

    (e) <>  Reports.--
    (1) Report on levels of charity care.--The Secretary of the
    Treasury, in consultation with the Secretary of Health and Human
    Services, shall submit to the Committees on Ways and Means,
    Education and Labor, and Energy and Commerce of the House of
    Representatives and to the Committees on Finance and Health,
    Education, Labor, and Pensions of the Senate an annual report on
    the following:
    (A) Information with respect to private tax-exempt,
    taxable, and government-owned hospitals regarding--
    (i) levels of charity care provided,
    (ii) bad debt expenses,
    (iii) unreimbursed costs for services provided
    with respect to means-tested government programs,
    and
    (iv) unreimbursed costs for services provided
    with respect to non-means tested government
    programs.
    (B) Information with respect to private tax-exempt
    hospitals regarding costs incurred for community benefit
    activities.
    (2) Report on trends.--
    (A) Study.--The Secretary of the Treasury, in
    consultation with the Secretary of Health and Human
    Services, shall conduct a study on trends in the
    information required to be reported under paragraph (1).
    (B) Report.--Not later than 5 years after the date
    of the enactment of this Act, the Secretary of the
    Treasury, in consultation with the Secretary of Health
    and Human Services, shall submit a report on the study
    conducted under subparagraph (A) to the Committees on
    Ways and Means, Education and Labor, and Energy and
    Commerce of the House of Representatives and to the
    Committees on Finance and Health, Education, Labor, and
    Pensions of the Senate.

    (f) <>  Effective Dates.--

    [[Page 859]]

    (1) In general.--Except as provided in paragraphs (2) and
    (3), the amendments made by this section shall apply to taxable
    years beginning after the date of the enactment of this Act.
    (2) Community health needs assessment.--The requirements of
    section 501(r)(3) of the Internal Revenue Code of 1986, as added
    by subsection (a), shall apply to taxable years beginning after
    the date which is 2 years after the date of the enactment of
    this Act.
    (3) Excise tax.--The amendments made by subsection (b) shall
    apply to failures occurring after the date of the enactment of
    this Act.

    SEC. 9008. <>  IMPOSITION OF ANNUAL FEE ON
    BRANDED PRESCRIPTION PHARMACEUTICAL MANUFACTURERS AND
    IMPORTERS.

    (a) <>  Imposition of Fee.--
    (1) In general.--Each covered entity engaged in the business
    of manufacturing or importing branded prescription drugs shall
    pay to the Secretary of the Treasury not later than the annual
    payment date of each calendar year beginning after 2009 a fee in
    an amount determined under subsection (b).
    (2) <>  Annual payment date.--For
    purposes of this section, the term ``annual payment date'' means
    with respect to any calendar year the date determined by the
    Secretary, but in no event later than September 30 of such
    calendar year.

    (b) Determination of Fee Amount.--
    (1) In general.--With respect to each covered entity, the
    fee under this section for any calendar year shall be equal to
    an amount that bears the same ratio to $2,300,000,000 as--
    (A) the covered entity's branded prescription drug
    sales taken into account during the preceding calendar
    year, bear to
    (B) the aggregate branded prescription drug sales of
    all covered entities taken into account during such
    preceding calendar year.
    (2) Sales taken into account.--For purposes of paragraph
    (1), the branded prescription drug sales taken into account
    during any calendar year with respect to any covered entity
    shall be determined in accordance with the following table:

    With respect to a covered entity's
    aggregate branded prescription drug      The percentage of such sales
    sales during the calendar year that         taken into account is:
    are:

    Not more than $5,000,000.............  0 percent
    More than $5,000,000 but not more      10 percent
    than $125,000,000.
    More than $125,000,000 but not more    40 percent
    than $225,000,000.
    More than $225,000,000 but not more    75 percent
    than $400,000,000.
    More than $400,000,000...............  100 percent.

    [[Page 860]]

    (3) Secretarial determination.--The Secretary of the
    Treasury shall calculate the amount of each covered entity's fee
    for any calendar year under paragraph (1). In calculating such
    amount, the Secretary of the Treasury shall determine such
    covered entity's branded prescription drug sales on the basis of
    reports submitted under subsection (g) and through the use of
    any other source of information available to the Secretary of
    the Treasury.

    (c) Transfer of Fees to Medicare Part B Trust Fund.--There is hereby
    appropriated to the Federal Supplementary Medical Insurance Trust Fund
    established under section 1841 of the Social Security Act an amount
    equal to the fees received by the Secretary of the Treasury under
    subsection (a).
    (d) Covered Entity.--
    (1) In general.--For purposes <>  of this
    section, the term ``covered entity'' means any manufacturer or
    importer with gross receipts from branded prescription drug
    sales.
    (2) Controlled groups.--
    (A) In general.--For purposes of this subsection,
    all persons treated as a single employer under
    subsection (a) or (b) of section 52 of the Internal
    Revenue Code of 1986 or subsection (m) or (o) of section
    414 of such Code shall be treated as a single covered
    entity.
    (B) <>  Inclusion of foreign
    corporations.--For purposes of subparagraph (A), in
    applying subsections (a) and (b) of section 52 of such
    Code to this section, section 1563 of such Code shall be
    applied without regard to subsection (b)(2)(C) thereof.

    (e) <>  Branded Prescription Drug Sales.--For
    purposes of this section--
    (1) In general.--The term ``branded prescription drug
    sales'' means sales of branded prescription drugs to any
    specified government program or pursuant to coverage under any
    such program.
    (2) Branded prescription drugs.--
    (A) In general.--The term ``branded prescription
    drug'' means--
    (i) any prescription drug the application for
    which was submitted under section 505(b) of the
    Federal Food, Drug, and Cosmetic Act (21 U.S.C.
    355(b)), or
    (ii) any biological product the license for
    which was submitted under section 351(a) of the
    Public Health Service Act (42 U.S.C. 262(a)).
    (B) Prescription drug.--For purposes of subparagraph
    (A)(i), the term ``prescription drug'' means any drug
    which is subject to section 503(b) of the Federal Food,
    Drug, and Cosmetic Act (21 U.S.C. 353(b)).
    (3) Exclusion of orphan drug sales.--The term ``branded
    prescription drug sales'' shall not include sales of any drug or
    biological product with respect to which a credit was allowed
    for any taxable year under section 45C of the Internal Revenue
    Code of 1986. The preceding sentence shall not apply with
    respect to any such drug or biological product after the date on
    which such drug or biological product is approved by the Food
    and Drug Administration for marketing for any indication other
    than the treatment of the rare disease or condition with respect
    to which such credit was allowed.

    [[Page 861]]

    (4) Specified government program.--The term ``specified
    government program'' means--
    (A) the Medicare Part D program under part D of
    title XVIII of the Social Security Act,
    (B) the Medicare Part B program under part B of
    title XVIII of the Social Security Act,
    (C) the Medicaid program under title XIX of the
    Social Security Act,
    (D) any program under which branded prescription
    drugs are procured by the Department of Veterans
    Affairs,
    (E) any program under which branded prescription
    drugs are procured by the Department of Defense, or
    (F) the TRICARE retail pharmacy program under
    section 1074g of title 10, United States Code.

    (f) Tax Treatment of Fees.--The fees imposed by this section--
    (1) <>  for purposes of subtitle F of
    the Internal Revenue Code of 1986, shall be treated as excise
    taxes with respect to which only civil actions for refund under
    procedures of such subtitle shall apply, and
    (2) for purposes of section 275 of such Code, shall be
    considered to be a tax described in section 275(a)(6).

    (g) Reporting Requirement.--Not later than the date determined by
    the Secretary of the Treasury following the end of any calendar year,
    the Secretary of Health and Human Services, the Secretary of Veterans
    Affairs, and the Secretary of Defense shall report to the Secretary of
    the Treasury, in such manner as the Secretary of the Treasury
    prescribes, the total branded prescription drug sales for each covered
    entity with respect to each specified government program under such
    Secretary's jurisdiction using the following methodology:
    (1) Medicare part d program.--The Secretary of Health and
    Human Services shall report, for each covered entity and for
    each branded prescription drug of the covered entity covered by
    the Medicare Part D program, the product of--
    (A) the per-unit ingredient cost, as reported to the
    Secretary of Health and Human Services by prescription
    drug plans and Medicare Advantage prescription drug
    plans, minus any per-unit rebate, discount, or other
    price concession provided by the covered entity, as
    reported to the Secretary of Health and Human Services
    by the prescription drug plans and Medicare Advantage
    prescription drug plans, and
    (B) the number of units of the branded prescription
    drug paid for under the Medicare Part D program.
    (2) Medicare part b program.--The Secretary of Health and
    Human Services shall report, for each covered entity and for
    each branded prescription drug of the covered entity covered by
    the Medicare Part B program under section 1862(a) of the Social
    Security Act, the product of--
    (A) the per-unit average sales price (as defined in
    section 1847A(c) of the Social Security Act) or the per-
    unit Part B payment rate for a separately paid branded
    prescription drug without a reported average sales
    price, and
    (B) the number of units of the branded prescription
    drug paid for under the Medicare Part B program.

    [[Page 862]]

    The Centers <>  for Medicare and Medicaid
    Services shall establish a process for determining the units and
    the allocated price for purposes of this section for those
    branded prescription drugs that are not separately payable or
    for which National Drug Codes are not reported.
    (3) Medicaid program.--The Secretary of Health and Human
    Services shall report, for each covered entity and for each
    branded prescription drug of the covered entity covered under
    the Medicaid program, the product of--
    (A) the per-unit ingredient cost paid to pharmacies
    by States for the branded prescription drug dispensed to
    Medicaid beneficiaries, minus any per-unit rebate paid
    by the covered entity under section 1927 of the Social
    Security Act and any State supplemental rebate, and
    (B) the number of units of the branded prescription
    drug paid for under the Medicaid program.
    (4) Department of veterans affairs programs.--The Secretary
    of Veterans Affairs shall report, for each covered entity and
    for each branded prescription drug of the covered entity the
    total amount paid for each such branded prescription drug
    procured by the Department of Veterans Affairs for its
    beneficiaries.
    (5) Department of defense programs and tricare.--The
    Secretary of Defense shall report, for each covered entity and
    for each branded prescription drug of the covered entity, the
    sum of--
    (A) the total amount paid for each such branded
    prescription drug procured by the Department of Defense
    for its beneficiaries, and
    (B) for each such branded prescription drug
    dispensed under the TRICARE retail pharmacy program, the
    product of--
    (i) the per-unit ingredient cost, minus any
    per-unit rebate paid by the covered entity, and
    (ii) the number of units of the branded
    prescription drug dispensed under such program.

    (h) Secretary.--For purposes of this section, the term ``Secretary''
    includes the Secretary's delegate.
    (i) <>  Guidance.--The Secretary of the Treasury
    shall publish guidance necessary to carry out the purposes of this
    section.

    (j) Application of Section.--This section shall apply to any branded
    prescription drug sales after December 31, 2008.
    (k) Conforming Amendment.--Section 1841(a) of the Social Security
    Act <>  is amended by inserting ``or section
    9008(c) of the Patient Protection and Affordable Care Act of 2009''
    after ``this part''.

    SEC. 9009. <>  IMPOSITION OF
    ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS AND IMPORTERS.

    (a) <>  Imposition of Fee.--
    (1) In general.--Each covered entity engaged in the business
    of manufacturing or importing medical devices shall pay to the
    Secretary not later than the annual payment date of each
    calendar year beginning after 2009 a fee in an amount determined
    under subsection (b).
    (2) Annual payment date.--For purposes of this section, the
    term ``annual payment date'' means with respect to any

    [[Page 863]]

    calendar year the date determined by the Secretary, but in no
    event later than September 30 of such calendar year.

    (b) Determination of Fee Amount.--
    (1) In general.--With respect to each covered entity, the
    fee under this section for any calendar year shall be equal to
    an amount that bears the same ratio to $2,000,000,000 as--
    (A) the covered entity's gross receipts from medical
    device sales taken into account during the preceding
    calendar year, bear to
    (B) the aggregate gross receipts of all covered
    entities from medical device sales taken into account
    during such preceding calendar year.
    (2) Gross receipts from sales taken into account.--For
    purposes of paragraph (1), the gross receipts from medical
    device sales taken into account during any calendar year with
    respect to any covered entity shall be determined in accordance
    with the following table:

    With respect to a covered entity's
    aggregate gross receipts from medical       The percentage of gross
    device sales during the calendar year   receipts taken into account is:
    that are:

    Not more than $5,000,000.............  0 percent
    More than $5,000,000 but not more      50 percent
    than $25,000,000.
    More than $25,000,000................  100 percent.

    (3) Secretarial determination.--The Secretary shall
    calculate the amount of each covered entity's fee for any
    calendar year under paragraph (1). In calculating such amount,
    the Secretary shall determine such covered entity's gross
    receipts from medical device sales on the basis of reports
    submitted by the covered entity under subsection (f) and through
    the use of any other source of information available to the
    Secretary.

    (c) Covered Entity.--
    (1) In general.--For purposes of this section, the term
    ``covered entity'' means any manufacturer or importer with gross
    receipts from medical device sales.
    (2) Controlled groups.--
    (A) In general.--For purposes of this subsection,
    all persons treated as a single employer under
    subsection (a) or (b) of section 52 of the Internal
    Revenue Code of 1986 or subsection (m) or (o) of section
    414 of such Code shall be treated as a single covered
    entity.
    (B) <>  Inclusion of foreign
    corporations.--For purposes of subparagraph (A), in
    applying subsections (a) and (b) of section 52 of such
    Code to this section, section 1563 of such Code shall be
    applied without regard to subsection (b)(2)(C) thereof.

    (d) Medical Device Sales.--For purposes of this section--
    (1) In general.--The term ``medical device sales'' means
    sales for use in the United States of any medical device, other
    than the sales of a medical device that--
    (A) has been classified in class II under section
    513 of the Federal Food, Drug, and Cosmetic Act (21
    U.S.C.

    [[Page 864]]

    360c) and is primarily sold to consumers at retail for
    not more than $100 per unit, or
    (B) has been classified in class I under such
    section.
    (2) United states.--For purposes of paragraph (1), the term
    ``United States'' means the several States, the District of
    Columbia, the Commonwealth of Puerto Rico, and the possessions
    of the United States.
    (3) Medical device.--For purposes of paragraph (1), the term
    ``medical device'' means any device (as defined in section
    201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
    321(h))) intended for humans.

    (e) Tax Treatment of Fees.--The fees imposed by this section--
    (1) for purposes of subtitle F of the Internal Revenue Code
    of 1986, shall be treated as excise taxes with respect to which
    only civil actions for refund under procedures of such subtitle
    shall apply, and
    (2) for purposes of section 275 of such Code, shall be
    considered to be a tax described in section 275(a)(6).

    (f) Reporting Requirement.--
    (1) In general.--Not later than the date determined by the
    Secretary following the end of any calendar year, each covered
    entity shall report to the Secretary, in such manner as the
    Secretary prescribes, the gross receipts from medical device
    sales of such covered entity during such calendar year.
    (2) Penalty for failure to report.--
    (A) In general.--In the case of any failure to make
    a report containing the information required by
    paragraph (1) on the date prescribed therefor
    (determined with regard to any extension of time for
    filing), unless it is shown that such failure is due to
    reasonable cause, there shall be paid by the covered
    entity failing to file such report, an amount equal to--
    (i) $10,000, plus
    (ii) the lesser of--
    (I) an amount equal to $1,000,
    multiplied by the number of days during
    which such failure continues, or
    (II) the amount of the fee imposed
    by this section for which such report
    was required.
    (B) Treatment of penalty.--The penalty imposed under
    subparagraph (A)--
    (i) shall be treated as a penalty for purposes
    of subtitle F of the Internal Revenue Code of
    1986,
    (ii) <>  shall be paid on
    notice and demand by the Secretary and in the same
    manner as tax under such Code, and
    (iii) <>  with respect
    to which only civil actions for refund under
    procedures of such subtitle F shall apply.

    (g) Secretary.--For purposes of this section, the term ``Secretary''
    means the Secretary of the Treasury or the Secretary's delegate.
    (h) <>  Guidance.--The Secretary shall publish
    guidance necessary to carry out the purposes of this section, including
    identification of medical devices described in subsection (d)(1)(A) and
    with respect to the treatment of gross receipts from sales of medical
    devices

    [[Page 865]]

    to another covered entity or to another entity by reason of the
    application of subsection (c)(2).

    (i) Application of Section.--This section shall apply to any medical
    device sales after December 31, 2008.

    SEC. 9010. <>  IMPOSITION OF ANNUAL FEE ON
    HEALTH INSURANCE PROVIDERS.

    (a) <>  Imposition of Fee.--
    (1) In general.--Each covered entity engaged in the business
    of providing health insurance shall pay to the Secretary not
    later than the annual payment date of each calendar year
    beginning after 2009 a fee in an amount determined under
    subsection (b).
    (2) <>  Annual payment date.--For
    purposes of this section, the term ``annual payment date'' means
    with respect to any calendar year the date determined by the
    Secretary, but in no event later than September 30 of such
    calendar year.

    (b) Determination of Fee Amount.--
    (1) In general.--With respect to each covered entity, the
    fee under this section for any calendar year shall be equal to
    an amount that bears the same ratio to $6,700,000,000 as--
    (A) the sum of--
    (i) the covered entity's net premiums written
    with respect to health insurance for any United
    States health risk that are taken into account
    during the preceding calendar year, plus
    (ii) 200 percent of the covered entity's third
    party administration agreement fees that are taken
    into account during the preceding calendar year,
    bears to
    (B) the sum of--
    (i) the aggregate net premiums written with
    respect to such health insurance of all covered
    entities that are taken into account during such
    preceding calendar year, plus
    (ii) 200 percent of the aggregate third party
    administration agreement fees of all covered
    entities that are taken into account during such
    preceding calendar year.
    (2) Amounts taken into account.--For purposes of paragraph
    (1)--
    (A) Net premiums written.--The net premiums written
    with respect to health insurance for any United States
    health risk that are taken into account during any
    calendar year with respect to any covered entity shall
    be determined in accordance with the following table:

    With respect to a covered entity's net   The percentage of net premiums
    premiums written during the calendar     written that are taken into
    year that are:                        account is:

    Not more than $25,000,000............  0 percent
    More than $25,000,000 but not more     50 percent
    than $50,000,000.
    More than $50,000,000................  100 percent.

    [[Page 866]]

    (B) Third party administration agreement fees.--The
    third party administration agreement fees that are taken
    into account during any calendar year with respect to
    any covered entity shall be determined in accordance
    with the following table:

    With respect to a covered entity's     The percentage of third party
    third party administration agreement    administration agreement fees
    fees during the calendar year that are:  that are taken into account is:

    Not more than $5,000,000.............  0 percent
    More than $5,000,000 but not more      50 percent
    than $10,000,000.
    More than $10,000,000................  100 percent.

    (3) Secretarial determination.--The Secretary shall
    calculate the amount of each covered entity's fee for any
    calendar year under paragraph (1). In calculating such amount,
    the Secretary shall determine such covered entity's net premiums
    written with respect to any United States health risk and third
    party administration agreement fees on the basis of reports
    submitted by the covered entity under subsection (g) and through
    the use of any other source of information available to the
    Secretary.

    (c) Covered Entity.--
    (1) <>  In general.--For purposes of this
    section, the term ``covered entity'' means any entity which
    provides health insurance for any United States health risk.
    (2) Exclusion.--Such term does not include--
    (A) any employer to the extent that such employer
    self-insures its employees' health risks, or
    (B) any governmental entity (except to the extent
    such an entity provides health insurance coverage
    through the community health insurance option under
    section 1323).
    (3) Controlled groups.--
    (A) In general.--For purposes of this subsection,
    all persons treated as a single employer under
    subsection (a) or (b) of section 52 of the Internal
    Revenue Code of 1986 or subsection (m) or (o) of section
    414 of such Code shall be treated as a single covered
    entity (or employer for purposes of paragraph (2)).
    (B) <>  Inclusion of foreign
    corporations.--For purposes of subparagraph (A), in
    applying subsections (a) and (b) of section 52 of such
    Code to this section, section 1563 of such Code shall be
    applied without regard to subsection (b)(2)(C) thereof.

    (d) <>  United States Health Risk.--For purposes
    of this section, the term ``United States health risk'' means the health
    risk of any individual who is--
    (1) a United States citizen,
    (2) a resident of the United States (within the meaning of
    section 7701(b)(1)(A) of the Internal Revenue Code of 1986), or
    (3) located in the United States, with respect to the period
    such individual is so located.

    [[Page 867]]

    (e) <>  Third Party Administration Agreement
    Fees.--For purposes of this section, the term ``third party
    administration agreement fees'' means, with respect to any covered
    entity, amounts received from an employer which are in excess of
    payments made by such covered entity for health benefits under an
    arrangement under which such employer self-insures the United States
    health risk of its employees.

    (f) Tax Treatment of Fees.--The fees imposed by this section--
    (1) <>  for purposes of subtitle F of
    the Internal Revenue Code of 1986, shall be treated as excise
    taxes with respect to which only civil actions for refund under
    procedures of such subtitle shall apply, and
    (2) for purposes of section 275 of such Code shall be
    considered to be a tax described in section 275(a)(6).

    (g) Reporting Requirement.--
    (1) In general.--Not later than the date determined by the
    Secretary following the end of any calendar year, each covered
    entity shall report to the Secretary, in such manner as the
    Secretary prescribes, the covered entity's net premiums written
    with respect to health insurance for any United States health
    risk and third party administration agreement fees for such
    calendar year.
    (2) Penalty for failure to report.--
    (A) In general.--In the case of any failure to make
    a report containing the information required by
    paragraph (1) on the date prescribed therefor
    (determined with regard to any extension of time for
    filing), unless it is shown that such failure is due to
    reasonable cause, there shall be paid by the covered
    entity failing to file such report, an amount equal to--
    (i) $10,000, plus
    (ii) the lesser of--
    (I) an amount equal to $1,000,
    multiplied by the number of days during
    which such failure continues, or
    (II) the amount of the fee imposed
    by this section for which such report
    was required.
    (B) Treatment of penalty.--The penalty imposed under
    subparagraph (A)--
    (i) shall be treated as a penalty for purposes
    of subtitle F of the Internal Revenue Code of
    1986,
    (ii) <>  shall be paid on
    notice and demand by the Secretary and in the same
    manner as tax under such Code, and
    (iii) with respect to which only civil actions
    for refund under procedures of such subtitle F
    shall apply.

    (h) Additional Definitions.--For purposes of this section--
    (1) Secretary.--The term ``Secretary'' means the Secretary
    of the Treasury or the Secretary's delegate.
    (2) United states.--The term ``United States'' means the
    several States, the District of Columbia, the Commonwealth of
    Puerto Rico, and the possessions of the United States.
    (3) Health insurance.--The term ``health insurance'' shall
    not include insurance for long-term care or disability.

    (i) <>  Guidance.--The Secretary shall publish
    guidance necessary to carry out the purposes of this section.

    [[Page 868]]

    (j) Application of Section.--This section shall apply to any net
    premiums written after December 31, 2008, with respect to health
    insurance for any United States health risk, and any third party
    administration agreement fees received after such date.

    SEC. 9011. STUDY AND REPORT OF EFFECT ON VETERANS HEALTH CARE.

    (a) In General.--The Secretary of Veterans Affairs shall conduct a
    study on the effect (if any) of the provisions of sections 9008, 9009,
    and 9010 on--
    (1) the cost of medical care provided to veterans, and
    (2) veterans' access to medical devices and branded
    prescription drugs.

    (b) Report.--The Secretary of Veterans Affairs shall report the
    results of the study under subsection (a) to the Committee on Ways and
    Means of the House of Representatives and to the Committee on Finance of
    the Senate not later than December 31, 2012.

    SEC. 9012. ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO MEDICARE
    PART D SUBSIDY.

    (a) In General.--Section 139A of the Internal Revenue Code of
    1986 <>  is amended by striking the second sentence.

    (b) <>  Effective Date.--The amendment made
    by this section shall apply to taxable years beginning after December
    31, 2010.

    SEC. 9013. MODIFICATION OF ITEMIZED DEDUCTION FOR MEDICAL EXPENSES.

    (a) In General.--Subsection (a) of section 213 of the Internal
    Revenue Code of 1986 <>  is amended by striking ``7.5
    percent'' and inserting ``10 percent''.

    (b) Temporary Waiver of Increase for Certain Seniors.--Section 213
    of the Internal Revenue Code of 1986 is amended by adding at the end the
    following new subsection:
    ``(f) <>  Special Rule for 2013,
    2014, 2015, and 2016.--In the case of any taxable year beginning after
    December 31, 2012, and ending before January 1, 2017, subsection (a)
    shall be applied with respect to a taxpayer by substituting `7.5
    percent' for `10 percent' if such taxpayer or such taxpayer's spouse has
    attained age 65 before the close of such taxable year.''.

    (c) Conforming Amendment.--Section 56(b)(1)(B) of the Internal
    Revenue Code of 1986 <>  is amended by striking ``by
    substituting `10 percent' for `7.5 percent''' and inserting ``without
    regard to subsection (f) of such section''.

    (d) <>  Effective Date.--The amendments made
    by this section shall apply to taxable years beginning after December
    31, 2012.

    SEC. 9014. LIMITATION ON EXCESSIVE REMUNERATION PAID BY CERTAIN HEALTH
    INSURANCE PROVIDERS.

    (a) In General.--Section 162(m) of the Internal Revenue Code of
    1986 <>  is amended by adding at the end the
    following new subparagraph:
    ``(6) <>  Special rule for application
    to certain health insurance providers.--
    ``(A) In general.--No deduction shall be allowed
    under this chapter--

    [[Page 869]]

    ``(i) in the case of applicable individual
    remuneration which is for any disqualified taxable
    year beginning after December 31, 2012, and which
    is attributable to services performed by an
    applicable individual during such taxable year, to
    the extent that the amount of such remuneration
    exceeds $500,000, or
    ``(ii) in the case of deferred deduction
    remuneration for any taxable year beginning after
    December 31, 2012, which is attributable to
    services performed by an applicable individual
    during any disqualified taxable year beginning
    after December 31, 2009, to the extent that the
    amount of such remuneration exceeds $500,000
    reduced (but not below zero) by the sum of--
    ``(I) the applicable individual
    remuneration for such disqualified
    taxable year, plus
    ``(II) the portion of the deferred
    deduction remuneration for such services
    which was taken into account under this
    clause in a preceding taxable year (or
    which would have been taken into account
    under this clause in a preceding taxable
    year if this clause were applied by
    substituting `December 31, 2009' for
    `December 31, 2012' in the matter
    preceding subclause (I)).
    ``(B) Disqualified taxable year.--For purposes of
    this paragraph, the term `disqualified taxable year'
    means, with respect to any employer, any taxable year
    for which such employer is a covered health insurance
    provider.
    ``(C) Covered health insurance provider.--For
    purposes of this paragraph--
    ``(i) In general.--The term `covered health
    insurance provider' means--
    ``(I) with respect to taxable years
    beginning after December 31, 2009, and
    before January 1, 2013, any employer
    which is a health insurance issuer (as
    defined in section 9832(b)(2)) and which
    receives premiums from providing health
    insurance coverage (as defined in
    section 9832(b)(1)), and
    ``(II) with respect to taxable years
    beginning after December 31, 2012, any
    employer which is a health insurance
    issuer (as defined in section
    9832(b)(2)) and with respect to which
    not less than 25 percent of the gross
    premiums received from providing health
    insurance coverage (as defined in
    section 9832(b)(1)) is from minimum
    essential coverage (as defined in
    section 5000A(f)).
    ``(ii) Aggregation rules.--Two or more persons
    who are treated as a single employer under
    subsection (b), (c), (m), or (o) of section 414
    shall be treated as a single employer, except that
    in applying section 1563(a) for purposes of any
    such subsection, paragraphs (2) and (3) thereof
    shall be disregarded.
    ``(D) Applicable individual remuneration.--For
    purposes of this paragraph, the term `applicable
    individual

    [[Page 870]]

    remuneration' means, with respect to any applicable
    individual for any disqualified taxable year, the
    aggregate amount allowable as a deduction under this
    chapter for such taxable year (determined without regard
    to this subsection) for remuneration (as defined in
    paragraph (4) without regard to subparagraphs (B), (C),
    and (D) thereof) for services performed by such
    individual (whether or not during the taxable year).
    Such term shall not include any deferred deduction
    remuneration with respect to services performed during
    the disqualified taxable year.
    ``(E) Deferred deduction remuneration.--For purposes
    of this paragraph, the term `deferred deduction
    remuneration' means remuneration which would be
    applicable individual remuneration for services
    performed in a disqualified taxable year but for the
    fact that the deduction under this chapter (determined
    without regard to this paragraph) for such remuneration
    is allowable in a subsequent taxable year.
    ``(F) Applicable individual.--For purposes of this
    paragraph, the term `applicable individual' means, with
    respect to any covered health insurance provider for any
    disqualified taxable year, any individual--
    ``(i) who is an officer, director, or employee
    in such taxable year, or
    ``(ii) who provides services for or on behalf
    of such covered health insurance provider during
    such taxable year.
    ``(G) Coordination.--Rules similar to the rules of
    subparagraphs (F) and (G) of paragraph (4) shall apply
    for purposes of this paragraph.
    ``(H) Regulatory authority.--The Secretary may
    prescribe such guidance, rules, or regulations as are
    necessary to carry out the purposes of this
    paragraph.''.

    (b) <>  Effective Date.--The amendment made
    by this section shall apply to taxable years beginning after December
    31, 2009, with respect to services performed after such date.

    SEC. 9015. ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-INCOME TAXPAYERS.

    (a) FICA.--
    (1) <>  In general.--Section 3101(b) of
    the Internal Revenue Code of 1986 is amended--
    (A) by striking ``In addition'' and inserting the
    following:
    ``(1) In general.--In addition'',
    (B) by striking ``the following percentages of the''
    and inserting ``1.45 percent of the'',
    (C) by striking ``(as defined in section 3121(b))--
    '' and all that follows and inserting ``(as defined in
    section 3121(b)).'', and
    (D) by adding at the end the following new
    paragraph:
    ``(2) Additional tax.--In addition to the tax imposed by
    paragraph (1) and the preceding subsection, there is hereby
    imposed on every taxpayer (other than a corporation, estate, or
    trust) a tax equal to 0.5 percent of wages which are received
    with respect to employment (as defined in section 3121(b))

    [[Page 871]]

    during any taxable year beginning after December 31, 2012, and
    which are in excess of--
    ``(A) in the case of a joint return, $250,000, and
    ``(B) in any other case, $200,000.''.
    (2) Collection of tax.--Section 3102 of the Internal Revenue
    Code of 1986 <>  is amended by adding at the
    end the following new subsection:

    ``(f) Special Rules for Additional Tax.--
    ``(1) In general.--In the case of any tax imposed by section
    3101(b)(2), subsection (a) shall only apply to the extent to
    which the taxpayer receives wages from the employer in excess of
    $200,000, and the employer may disregard the amount of wages
    received by such taxpayer's spouse.
    ``(2) Collection of amounts not withheld.--To the extent
    that the amount of any tax imposed by section 3101(b)(2) is not
    collected by the employer, such tax shall be paid by the
    employee.
    ``(3) Tax paid by recipient.--If an employer, in violation
    of this chapter, fails to deduct and withhold the tax imposed by
    section 3101(b)(2) and thereafter the tax is paid by the
    employee, the tax so required to be deducted and withheld shall
    not be collected from the employer, but this paragraph shall in
    no case relieve the employer from liability for any penalties or
    additions to tax otherwise applicable in respect of such failure
    to deduct and withhold.''.

    (b) SECA.--
    (1) In general.--Section 1401(b) of the Internal Revenue
    Code of 1986 <>  is amended--
    (A) by striking ``In addition'' and inserting the
    following:
    ``(1) In general.--In addition'', and
    (B) by adding at the end the following new
    paragraph:
    ``(2) Additional tax.--
    ``(A) In general.--In addition to the tax imposed by
    paragraph (1) and the preceding subsection, there is
    hereby imposed on every taxpayer (other than a
    corporation, estate, or trust) for each taxable year
    beginning after December 31, 2012, a tax equal to 0.5
    percent of the self-employment income for such taxable
    year which is in excess of--
    ``(i) in the case of a joint return, $250,000,
    and
    ``(ii) in any other case, $200,000.
    ``(B) Coordination with fica.--The amounts under
    clauses (i) and (ii) of subparagraph (A) shall be
    reduced (but not below zero) by the amount of wages
    taken into account in determining the tax imposed under
    section 3121(b)(2) with respect to the taxpayer.''.
    (2) No deduction for additional tax.--
    (A) In general.--Section 164(f) of such Code is
    amended by inserting ``(other than the taxes imposed by
    section 1401(b)(2))'' after ``section 1401)''.
    (B) Deduction for net earnings from self-
    employment.--Subparagraph (B) of section
    1402(a)(12) <>  is amended by
    inserting ``(determined without regard to the rate
    imposed under paragraph (2) of section 1401(b))'' after
    ``for such year''.

    [[Page 872]]

    (c) <>  Effective Date.--The amendments made
    by this section shall apply with respect to remuneration received, and
    taxable years beginning, after December 31, 2012.

    SEC. 9016. MODIFICATION OF SECTION 833 TREATMENT OF CERTAIN HEALTH
    ORGANIZATIONS.

    (a) In General.--Subsection (c) of section 833 of the Internal
    Revenue Code of 1986 <>  is amended by adding at the
    end the following new paragraph:
    ``(5) Nonapplication of section in case of low medical loss
    ratio.--Notwithstanding the preceding paragraphs, this section
    shall not apply to any organization unless such organization's
    percentage of total premium revenue expended on reimbursement
    for clinical services provided to enrollees under its policies
    during such taxable year (as reported under section 2718 of the
    Public Health Service Act) is not less than 85 percent.''.

    (b) <>  Effective Date.--The amendment made
    by this section shall apply to taxable years beginning after December
    31, 2009.

    SEC. 9017. EXCISE TAX ON ELECTIVE COSMETIC MEDICAL PROCEDURES.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986, as
    amended by this Act, is amended by adding at the end the following new
    chapter:

    ``CHAPTER 49--ELECTIVE COSMETIC MEDICAL PROCEDURES

    ``Sec. 5000B. Imposition of tax on elective cosmetic medical procedures.

    ``SEC. 5000B. <>  IMPOSITION OF TAX ON ELECTIVE
    COSMETIC MEDICAL PROCEDURES.

    ``(a) In General.--There is hereby imposed on any cosmetic surgery
    and medical procedure a tax equal to 5 percent of the amount paid for
    such procedure (determined without regard to this section), whether paid
    by insurance or otherwise.
    ``(b) Cosmetic Surgery and Medical Procedure.--For purposes of this
    section, the term `cosmetic surgery and medical procedure' means any
    cosmetic surgery (as defined in section 213(d)(9)(B)) or other similar
    procedure which--
    ``(1) is performed by a licensed medical professional, and
    ``(2) is not necessary to ameliorate a deformity arising
    from, or directly related to, a congenital abnormality, a
    personal injury resulting from an accident or trauma, or
    disfiguring disease.

    ``(c) Payment of Tax.--
    ``(1) In general.--The tax imposed by this section shall be
    paid by the individual on whom the procedure is performed.
    ``(2) Collection.--Every person receiving a payment for
    procedures on which a tax is imposed under subsection (a) shall
    collect the amount of the tax from the individual on whom the
    procedure is performed and remit such tax quarterly to the
    Secretary at such time and in such manner as provided by the
    Secretary.
    ``(3) Secondary liability.--Where any tax imposed by
    subsection (a) is not paid at the time payments for cosmetic
    surgery and medical procedures are made, then to the extent that

    [[Page 873]]

    such tax is not collected, such tax shall be paid by the person
    who performs the procedure.''.

    (b) Clerical Amendment.--The table of chapters for subtitle D of the
    Internal Revenue Code of 1986, as amended by this Act, is amended by
    inserting after the item relating to chapter 48 the following new item:

    ``Chapter 49--Elective Cosmetic Medical Procedures''.

    (c) <>  Effective Date.--The amendments
    made by this section shall apply to procedures performed on or after
    January 1, 2010.

    Subtitle B--Other Provisions

    SEC. 9021. EXCLUSION OF HEALTH BENEFITS PROVIDED BY INDIAN TRIBAL
    GOVERNMENTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the
    Internal Revenue Code of 1986 is amended by inserting after section 139C
    the following new section:

    ``SEC. 139D. <>  INDIAN HEALTH CARE BENEFITS.

    ``(a) General Rule.--Except as otherwise provided in this section,
    gross income does not include the value of any qualified Indian health
    care benefit.
    ``(b) <>  Qualified Indian Health Care Benefit.--
    For purposes of this section, the term `qualified Indian health care
    benefit' means--
    ``(1) any health service or benefit provided or purchased,
    directly or indirectly, by the Indian Health Service through a
    grant to or a contract or compact with an Indian tribe or tribal
    organization, or through a third-party program funded by the
    Indian Health Service,
    ``(2) medical care provided or purchased by, or amounts to
    reimburse for such medical care provided by, an Indian tribe or
    tribal organization for, or to, a member of an Indian tribe,
    including a spouse or dependent of such a member,
    ``(3) coverage under accident or health insurance (or an
    arrangement having the effect of accident or health insurance),
    or an accident or health plan, provided by an Indian tribe or
    tribal organization for medical care to a member of an Indian
    tribe, include a spouse or dependent of such a member, and
    ``(4) any other medical care provided by an Indian tribe or
    tribal organization that supplements, replaces, or substitutes
    for a program or service relating to medical care provided by
    the Federal government to Indian tribes or members of such a
    tribe.

    ``(c) Definitions.--For purposes of this section--
    ``(1) Indian tribe.--The term `Indian tribe' has the meaning
    given such term by section 45A(c)(6).
    ``(2) Tribal organization.--The term `tribal organization'
    has the meaning given such term by section 4(l) of the Indian
    Self-Determination and Education Assistance Act.
    ``(3) Medical care.--The term `medical care' has the same
    meaning as when used in section 213.
    ``(4) Accident or health insurance; accident or health
    plan.--The terms `accident or health insurance' and `accident

    [[Page 874]]

    or health plan' have the same meaning as when used in section
    105.
    ``(5) Dependent.--The term `dependent' has the meaning given
    such term by section 152, determined without regard to
    subsections (b)(1), (b)(2), and (d)(1)(B) thereof.

    ``(d) Denial of Double Benefit.--Subsection (a) shall not apply to
    the amount of any qualified Indian health care benefit which is not
    includible in gross income of the beneficiary of such benefit under any
    other provision of this chapter, or to the amount of any such benefit
    for which a deduction is allowed to such beneficiary under any other
    provision of this chapter.''.
    (b) Clerical Amendment.--The table of sections for part III of
    subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
    amended by inserting after the item relating to section 139C the
    following new item:

    ``Sec. 139D. Indian health care benefits.''.

    (c) <>  Effective Date.--The amendments
    made by this section shall apply to benefits and coverage provided after
    the date of the enactment of this Act.

    (d) <>  No Inference.--Nothing in the
    amendments made by this section shall be construed to create an
    inference with respect to the exclusion from gross income of--
    (1) benefits provided by an Indian tribe or tribal
    organization that are not within the scope of this section, and
    (2) benefits provided prior to the date of the enactment of
    this Act.

    SEC. 9022. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS FOR SMALL BUSINESSES.

    (a) In General.--Section 125 of the Internal Revenue Code of
    1986 <>  (relating to cafeteria plans), as amended by
    this Act, is amended by redesignating subsections (j) and (k) as
    subsections (k) and (l), respectively, and by inserting after subsection
    (i) the following new subsection:

    ``(j) Simple Cafeteria Plans for Small Businesses.--
    ``(1) In general.--An eligible employer maintaining a simple
    cafeteria plan with respect to which the requirements of this
    subsection are met for any year shall be treated as meeting any
    applicable nondiscrimination requirement during such year.
    ``(2) Simple cafeteria plan.--For purposes of this
    subsection, the term `simple cafeteria plan' means a cafeteria
    plan--
    ``(A) which is established and maintained by an
    eligible employer, and
    ``(B) with respect to which the contribution
    requirements of paragraph (3), and the eligibility and
    participation requirements of paragraph (4), are met.
    ``(3) Contribution requirements.--
    ``(A) In general.--The requirements of this
    paragraph are met if, under the plan the employer is
    required, without regard to whether a qualified employee
    makes any salary reduction contribution, to make a
    contribution to provide qualified benefits under the
    plan on behalf of each qualified employee in an amount
    equal to--
    ``(i) a uniform percentage (not less than 2
    percent) of the employee's compensation for the
    plan year, or

    [[Page 875]]

    ``(ii) an amount which is not less than the
    lesser of--
    ``(I) 6 percent of the employee's
    compensation for the plan year, or
    ``(II) twice the amount of the
    salary reduction contributions of each
    qualified employee.
    ``(B) Matching contributions on behalf of highly
    compensated and key employees.--The requirements of
    subparagraph (A)(ii) shall not be treated as met if,
    under the plan, the rate of contributions with respect
    to any salary reduction contribution of a highly
    compensated or key employee at any rate of contribution
    is greater than that with respect to an employee who is
    not a highly compensated or key employee.
    ``(C) Additional contributions.--Subject to
    subparagraph (B), nothing in this paragraph shall be
    treated as prohibiting an employer from making
    contributions to provide qualified benefits under the
    plan in addition to contributions required under
    subparagraph (A).
    ``(D) Definitions.--For purposes of this paragraph--
    ``(i) Salary reduction contribution.--The term
    `salary reduction contribution' means, with
    respect to a cafeteria plan, any amount which is
    contributed to the plan at the election of the
    employee and which is not includible in gross
    income by reason of this section.
    ``(ii) Qualified employee.--The term
    `qualified employee' means, with respect to a
    cafeteria plan, any employee who is not a highly
    compensated or key employee and who is eligible to
    participate in the plan.
    ``(iii) Highly compensated employee.--The term
    `highly compensated employee' has the meaning
    given such term by section 414(q).
    ``(iv) Key employee.--The term `key employee'
    has the meaning given such term by section 416(i).
    ``(4) Minimum eligibility and participation requirements.--
    ``(A) In general.--The requirements of this
    paragraph shall be treated as met with respect to any
    year if, under the plan--
    ``(i) all employees who had at least 1,000
    hours of service for the preceding plan year are
    eligible to participate, and
    ``(ii) each employee eligible to participate
    in the plan may, subject to terms and conditions
    applicable to all participants, elect any benefit
    available under the plan.
    ``(B) Certain employees may be excluded.--For
    purposes of subparagraph (A)(i), an employer may elect
    to exclude under the plan employees--
    ``(i) who have not attained the age of 21
    before the close of a plan year,
    ``(ii) who have less than 1 year of service
    with the employer as of any day during the plan
    year,
    ``(iii) who are covered under an agreement
    which the Secretary of Labor finds to be a
    collective bargaining agreement if there is
    evidence that the benefits

    [[Page 876]]

    covered under the cafeteria plan were the subject
    of good faith bargaining between employee
    representatives and the employer, or
    ``(iv) who are described in section
    410(b)(3)(C) (relating to nonresident aliens
    working outside the United States).
    A plan may provide a shorter period of service or
    younger age for purposes of clause (i) or (ii).
    ``(5) Eligible employer.--For purposes of this subsection--
    ``(A) In general.--The term `eligible employer'
    means, with respect to any year, any employer if such
    employer employed an average of 100 or fewer employees
    on business days during either of the 2 preceding years.
    For purposes of this subparagraph, a year may only be
    taken into account if the employer was in existence
    throughout the year.
    ``(B) Employers not in existence during preceding
    year.--If an employer was not in existence throughout
    the preceding year, the determination under subparagraph
    (A) shall be based on the average number of employees
    that it is reasonably expected such employer will employ
    on business days in the current year.
    ``(C) Growing employers retain treatment as small
    employer.--
    ``(i) In general.--If--
    ``(I) an employer was an eligible
    employer for any year (a `qualified
    year'), and
    ``(II) such employer establishes a
    simple cafeteria plan for its employees
    for such year,
    then, notwithstanding the fact the employer fails
    to meet the requirements of subparagraph (A) for
    any subsequent year, such employer shall be
    treated as an eligible employer for such
    subsequent year with respect to employees (whether
    or not employees during a qualified year) of any
    trade or business which was covered by the plan
    during any qualified year.
    ``(ii) Exception.--This subparagraph shall
    cease to apply if the employer employs an average
    of 200 or more employees on business days during
    any year preceding any such subsequent year.
    ``(D) Special rules.--
    ``(i) Predecessors.--Any reference in this
    paragraph to an employer shall include a reference
    to any predecessor of such employer.
    ``(ii) Aggregation rules.--All persons treated
    as a single employer under subsection (a) or (b)
    of section 52, or subsection (n) or (o) of section
    414, shall be treated as one person.
    ``(6) Applicable nondiscrimination requirement.--For
    purposes of this subsection, the term `applicable
    nondiscrimination requirement' means any requirement under
    subsection (b) of this section, section 79(d), section 105(h),
    or paragraph (2), (3), (4), or (8) of section 129(d).
    ``(7) Compensation.--The term `compensation' has the meaning
    given such term by section 414(s).''.

    (b) <>  Effective Date.--The amendments made
    by this section shall apply to years beginning after December 31, 2010.

    [[Page 877]]

    SEC. 9023. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1
    of the Internal Revenue Code of 1986 is amended by inserting after
    section 48C the following new section:

    ``SEC. 48D. <>  QUALIFYING THERAPEUTIC DISCOVERY
    PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying
    therapeutic discovery project credit for any taxable year is an amount
    equal to 50 percent of the qualified investment for such taxable year
    with respect to any qualifying therapeutic discovery project of an
    eligible taxpayer.
    ``(b) Qualified Investment.--
    ``(1) In general.--For purposes of subsection (a), the
    qualified investment for any taxable year is the aggregate
    amount of the costs paid or incurred in such taxable year for
    expenses necessary for and directly related to the conduct of a
    qualifying therapeutic discovery project.
    ``(2) Limitation.--The amount which is treated as qualified
    investment for all taxable years with respect to any qualifying
    therapeutic discovery project shall not exceed the amount
    certified by the Secretary as eligible for the credit under this
    section.
    ``(3) Exclusions.--The qualified investment for any taxable
    year with respect to any qualifying therapeutic discovery
    project shall not take into account any cost--
    ``(A) for remuneration for an employee described in
    section 162(m)(3),
    ``(B) for interest expenses,
    ``(C) for facility maintenance expenses,
    ``(D) which is identified as a service cost under
    section 1.263A-1(e)(4) of title 26, Code of Federal
    Regulations, or
    ``(E) for any other expense as determined by the
    Secretary as appropriate to carry out the purposes of
    this section.
    ``(4) Certain progress expenditure rules made applicable.--
    In the case of costs described in paragraph (1) that are paid
    for property of a character subject to an allowance for
    depreciation, rules similar to the rules of subsections (c)(4)
    and (d) of section 46 (as in effect on the day before the date
    of the enactment of the Revenue Reconciliation Act of 1990)
    shall apply for purposes of this section.
    ``(5) Application of subsection.--An investment shall be
    considered a qualified investment under this subsection only if
    such investment is made in a taxable year beginning in 2009 or
    2010.

    ``(c) Definitions.--
    ``(1) Qualifying therapeutic discovery project.--The term
    `qualifying therapeutic discovery project' means a project which
    is designed--
    ``(A) to treat or prevent diseases or conditions by
    conducting pre-clinical activities, clinical trials, and
    clinical studies, or carrying out research protocols,
    for the purpose of securing approval of a product under
    section 505(b) of the Federal Food, Drug, and Cosmetic
    Act or section 351(a) of the Public Health Service Act,

    [[Page 878]]

    ``(B) to diagnose diseases or conditions or to
    determine molecular factors related to diseases or
    conditions by developing molecular diagnostics to guide
    therapeutic decisions, or
    ``(C) to develop a product, process, or technology
    to further the delivery or administration of
    therapeutics.
    ``(2) Eligible taxpayer.--
    ``(A) In general.--The term `eligible taxpayer'
    means a taxpayer which employs not more than 250
    employees in all businesses of the taxpayer at the time
    of the submission of the application under subsection
    (d)(2).
    ``(B) Aggregation rules.--All persons treated as a
    single employer under subsection (a) or (b) of section
    52, or subsection (m) or (o) of section 414, shall be so
    treated for purposes of this paragraph.
    ``(3) Facility maintenance expenses.--The term `facility
    maintenance expenses' means costs paid or incurred to maintain a
    facility, including--
    ``(A) mortgage or rent payments,
    ``(B) insurance payments,
    ``(C) utility and maintenance costs, and
    ``(D) costs of employment of maintenance personnel.

    ``(d) Qualifying Therapeutic Discovery Project Program.--
    ``(1) Establishment.--
    ``(A) <>  In general.--Not later
    than 60 days after the date of the enactment of this
    section, the Secretary, in consultation with the
    Secretary of Health and Human Services, shall establish
    a qualifying therapeutic discovery project program to
    consider and award certifications for qualified
    investments eligible for credits under this section to
    qualifying therapeutic discovery project sponsors.
    ``(B) Limitation.--The total amount of credits that
    may be allocated under the program shall not exceed
    $1,000,000,000 for the 2-year period beginning with
    2009.
    ``(2) Certification.--
    ``(A) Application period.--Each applicant for
    certification under this paragraph shall submit an
    application containing such information as the Secretary
    may require during the period beginning on the date the
    Secretary establishes the program under paragraph (1).
    ``(B) Time for review of applications.--The
    Secretary shall take action to approve or deny any
    application under subparagraph (A) within 30 days of the
    submission of such application.
    ``(C) Multi-year applications.--An application for
    certification under subparagraph (A) may include a
    request for an allocation of credits for more than 1 of
    the years described in paragraph (1)(B).
    ``(3) Selection criteria.--In determining the qualifying
    therapeutic discovery projects with respect to which qualified
    investments may be certified under this section, the Secretary--
    ``(A) shall take into consideration only those
    projects that show reasonable potential--
    ``(i) to result in new therapies--
    ``(I) to treat areas of unmet
    medical need, or
    ``(II) to prevent, detect, or treat
    chronic or acute diseases and
    conditions,

    [[Page 879]]

    ``(ii) to reduce long-term health care costs
    in the United States, or
    ``(iii) to significantly advance the goal of
    curing cancer within the 30-year period beginning
    on the date the Secretary establishes the program
    under paragraph (1), and
    ``(B) shall take into consideration which projects
    have the greatest potential--
    ``(i) to create and sustain (directly or
    indirectly) high quality, high-paying jobs in the
    United States, and
    ``(ii) to advance United States
    competitiveness in the fields of life, biological,
    and medical sciences.
    ``(4) <>
    Disclosure of allocations.--The Secretary shall, upon making a
    certification under this subsection, publicly disclose the
    identity of the applicant and the amount of the credit with
    respect to such applicant.

    ``(e) Special Rules.--
    ``(1) Basis adjustment.--For purposes of this subtitle, if a
    credit is allowed under this section for an expenditure related
    to property of a character subject to an allowance for
    depreciation, the basis of such property shall be reduced by the
    amount of such credit.
    ``(2) Denial of double benefit.--
    ``(A) Bonus depreciation.--A credit shall not be
    allowed under this section for any investment for which
    bonus depreciation is allowed under section 168(k),
    1400L(b)(1), or 1400N(d)(1).
    ``(B) Deductions.--No deduction under this subtitle
    shall be allowed for the portion of the expenses
    otherwise allowable as a deduction taken into account in
    determining the credit under this section for the
    taxable year which is equal to the amount of the credit
    determined for such taxable year under subsection (a)
    attributable to such portion. This subparagraph shall
    not apply to expenses related to property of a character
    subject to an allowance for depreciation the basis of
    which is reduced under paragraph (1), or which are
    described in section 280C(g).
    ``(C) Credit for research activities.--
    ``(i) In general.--Except as provided in
    clause (ii), any expenses taken into account under
    this section for a taxable year shall not be taken
    into account for purposes of determining the
    credit allowable under section 41 or 45C for such
    taxable year.
    ``(ii) Expenses included in determining base
    period research expenses.--Any expenses for any
    taxable year which are qualified research expenses
    (within the meaning of section 41(b)) shall be
    taken into account in determining base period
    research expenses for purposes of applying section
    41 to subsequent taxable years.

    ``(f) Coordination With Department of Treasury Grants.--In the case
    of any investment with respect to which the Secretary makes a grant
    under section 9023(e) of the Patient Protection and Affordable Care Act
    of 2009--
    ``(1) Denial of credit.--No credit shall be determined under
    this section with respect to such investment for the

    [[Page 880]]

    taxable year in which such grant is made or any subsequent
    taxable year.
    ``(2) Recapture of credits for progress expenditures made
    before grant.--If a credit was determined under this section
    with respect to such investment for any taxable year ending
    before such grant is made--
    ``(A) the tax imposed under subtitle A on the
    taxpayer for the taxable year in which such grant is
    made shall be increased by so much of such credit as was
    allowed under section 38,
    ``(B) the general business carryforwards under
    section 39 shall be adjusted so as to recapture the
    portion of such credit which was not so allowed, and
    ``(C) the amount of such grant shall be determined
    without regard to any reduction in the basis of any
    property of a character subject to an allowance for
    depreciation by reason of such credit.
    ``(3) Treatment of grants.--Any such grant shall not be
    includible in the gross income of the taxpayer.''.

    (b) Inclusion as Part of Investment Credit.--Section 46 of the
    Internal Revenue Code of 1986 <>  is amended--
    (1) by adding a comma at the end of paragraph (2),
    (2) by striking the period at the end of paragraph (5) and
    inserting ``, and'', and
    (3) by adding at the end the following new paragraph:
    ``(6) the qualifying therapeutic discovery project
    credit.''.

    (c) Conforming Amendments.--
    (1) Section 49(a)(1)(C) of the Internal Revenue Code of 1986
    is <>  amended--
    (A) by striking ``and'' at the end of clause (iv),
    (B) by striking the period at the end of clause (v)
    and inserting ``, and'', and
    (C) by adding at the end the following new clause:
    ``(vi) the basis of any property to which
    paragraph (1) of section 48D(e) applies which is
    part of a qualifying therapeutic discovery project
    under such section 48D.''.
    (2) <>  Section 280C of such Code is
    amended by adding at the end the following new subsection:

    ``(g) Qualifying Therapeutic Discovery Project Credit.--
    ``(1) In general.--No deduction shall be allowed for that
    portion of the qualified investment (as defined in section
    48D(b)) otherwise allowable as a deduction for the taxable year
    which--
    ``(A) would be qualified research expenses (as
    defined in section 41(b)), basic research expenses (as
    defined in section 41(e)(2)), or qualified clinical
    testing expenses (as defined in section 45C(b)) if the
    credit under section 41 or section 45C were allowed with
    respect to such expenses for such taxable year, and
    ``(B) is equal to the amount of the credit
    determined for such taxable year under section 48D(a),
    reduced by--
    ``(i) the amount disallowed as a deduction by
    reason of section 48D(e)(2)(B), and
    ``(ii) the amount of any basis reduction under
    section 48D(e)(1).
    ``(2) Similar rule where taxpayer capitalizes rather than
    deducts expenses.--In the case of expenses described

    [[Page 881]]

    in paragraph (1)(A) taken into account in determining the credit
    under section 48D for the taxable year, if--
    ``(A) the amount of the portion of the credit
    determined under such section with respect to such
    expenses, exceeds
    ``(B) the amount allowable as a deduction for such
    taxable year for such expenses (determined without
    regard to paragraph (1)),
    the amount chargeable to capital account for the taxable year
    for such expenses shall be reduced by the amount of such excess.
    ``(3) <>  Controlled groups.--
    Paragraph (3) of subsection (b) shall apply for purposes of this
    subsection.''.

    (d) Clerical Amendment.--The table of sections for subpart E of part
    IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is
    amended by inserting after the item relating to section 48C the
    following new item:

    ``Sec. 48D. Qualifying therapeutic discovery project credit.''.

    (e) <>  Grants for Qualified Investments in
    Therapeutic Discovery Projects in Lieu of Tax Credits.--
    (1) In general.--Upon application, the Secretary of the
    Treasury shall, subject to the requirements of this subsection,
    provide a grant to each person who makes a qualified investment
    in a qualifying therapeutic discovery project in the amount of
    50 percent of such investment. No grant shall be made under this
    subsection with respect to any investment unless such investment
    is made during a taxable year beginning in 2009 or 2010.
    (2) Application.--
    (A) In general.--At the stated election of the
    applicant, an application for certification under
    section 48D(d)(2) of the Internal Revenue Code of 1986
    for a credit under such section for the taxable year of
    the applicant which begins in 2009 shall be considered
    to be an application for a grant under paragraph (1) for
    such taxable year.
    (B) Taxable years beginning in 2010.--An application
    for a grant under paragraph (1) for a taxable year
    beginning in 2010 shall be submitted--
    (i) not earlier than the day after the last
    day of such taxable year, and
    (ii) not later than the due date (including
    extensions) for filing the return of tax for such
    taxable year.
    (C) Information to be submitted.--An application for
    a grant under paragraph (1) shall include such
    information and be in such form as the Secretary may
    require to state the amount of the credit allowable (but
    for the receipt of a grant under this subsection) under
    section 48D for the taxable year for the qualified
    investment with respect to which such application is
    made.
    (3) Time for payment of grant.--
    (A) In general.--The Secretary of the Treasury shall
    make payment of the amount of any grant under paragraph
    (1) during the 30-day period beginning on the later of--
    (i) the date of the application for such
    grant, or
    (ii) the date the qualified investment for
    which the grant is being made is made.

    [[Page 882]]

    (B) Regulations.--In the case of investments of an
    ongoing nature, the Secretary shall issue regulations to
    determine the date on which a qualified investment shall
    be deemed to have been made for purposes of this
    paragraph.
    (4) <>  Qualified investment.--For
    purposes of this subsection, the term ``qualified investment''
    means a qualified investment that is certified under section
    48D(d) of the Internal Revenue Code of 1986 for purposes of the
    credit under such section 48D.
    (5) Application of certain rules.--
    (A) In general.--In making grants under this
    subsection, the Secretary of the Treasury shall apply
    rules similar to the rules of section 50 of the Internal
    Revenue Code of 1986. In applying such rules, any
    increase in tax under chapter 1 of such Code by reason
    of an investment ceasing to be a qualified investment
    shall be imposed on the person to whom the grant was
    made.
    (B) Special rules.--
    (i) Recapture of excessive grant amounts.--If
    the amount of a grant made under this subsection
    exceeds the amount allowable as a grant under this
    subsection, such excess shall be recaptured under
    subparagraph (A) as if the investment to which
    such excess portion of the grant relates had
    ceased to be a qualified investment immediately
    after such grant was made.
    (ii) Grant information not treated as return
    information.--In no event shall the amount of a
    grant made under paragraph (1), the identity of
    the person to whom such grant was made, or a
    description of the investment with respect to
    which such grant was made be treated as return
    information for purposes of section 6103 of the
    Internal Revenue Code of 1986.
    (6) Exception for certain non-taxpayers.--The Secretary of
    the Treasury shall not make any grant under this subsection to--
    (A) any Federal, State, or local government (or any
    political subdivision, agency, or instrumentality
    thereof),
    (B) any organization described in section 501(c) of
    the Internal Revenue Code of 1986 and exempt from tax
    under section 501(a) of such Code,
    (C) any entity referred to in paragraph (4) of
    section 54(j) of such Code, or
    (D) any partnership or other pass-thru entity any
    partner (or other holder of an equity or profits
    interest) of which is described in subparagraph (A), (B)
    or (C).
    In the case of a partnership or other pass-thru entity described
    in subparagraph (D), partners and other holders of any equity or
    profits interest shall provide to such partnership or entity
    such information as the Secretary of the Treasury may require to
    carry out the purposes of this paragraph.
    (7) Secretary.--Any reference in this subsection to the
    Secretary of the Treasury shall be treated as including the
    Secretary's delegate.
    (8) Other terms.--Any term used in this subsection which is
    also used in section 48D of the Internal Revenue Code

    [[Page 883]]

    of 1986 shall have the same meaning for purposes of this
    subsection as when used in such section.
    (9) Denial of double benefit.--No credit shall be allowed
    under section 46(6) of the Internal Revenue Code of 1986 by
    reason of section 48D of such Code for any investment for which
    a grant is awarded under this subsection.
    (10) Appropriations.--There is hereby appropriated to the
    Secretary of the Treasury such sums as may be necessary to carry
    out this subsection.
    (11) Termination.--The Secretary of the Treasury shall not
    make any grant to any person under this subsection unless the
    application of such person for such grant is received before
    January 1, 2013.
    (12) Protecting middle class families from tax increases.--
    It is the sense of the Senate that the Senate should reject any
    procedural maneuver that would raise taxes on middle class
    families, such as a motion to commit the pending legislation to
    the Committee on Finance, which is designed to kill legislation
    that provides tax cuts for American workers and families,
    including the affordability tax credit and the small business
    tax credit.

    (f) <>  Effective Date.--The amendments made
    by subsections (a) through (d) of this section shall apply to amounts
    paid or incurred after December 31, 2008, in taxable years beginning
    after such date.

    TITLE X--STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

    Subtitle A--Provisions Relating to Title I

    SEC. 10101. AMENDMENTS TO SUBTITLE A.

    (a) Section 2711 of the Public Health Service Act, as added by
    section 1001(5) of this Act, is amended to read as follows:

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

    ``(a) Prohibition.--
    ``(1) In general.--A group health plan and a health
    insurance issuer offering group or individual health insurance
    coverage may not establish--
    ``(A) lifetime limits on the dollar value of
    benefits for any participant or beneficiary; or
    ``(B) except as provided in paragraph (2), annual
    limits on the dollar value of benefits for any
    participant or beneficiary.
    ``(2) Annual limits prior to 2014.--With respect to plan
    years beginning prior to January 1, 2014, a group health plan
    and a health insurance issuer offering group or individual
    health insurance coverage may only establish a restricted annual
    limit on the dollar value of benefits for any participant or
    beneficiary with respect to the scope of benefits that are
    essential health benefits under section 1302(b) of the Patient

    [[Page 884]]

    Protection and Affordable Care Act, as determined by the
    Secretary. In defining the term `restricted annual limit' for
    purposes of the preceding sentence, the Secretary shall ensure
    that access to needed services is made available with a minimal
    impact on premiums.

    ``(b) Per Beneficiary Limits.--Subsection (a) shall not be construed
    to prevent a group health plan or health insurance coverage from placing
    annual or lifetime per beneficiary limits on specific covered benefits
    that are not essential health benefits under section 1302(b) of the
    Patient Protection and Affordable Care Act, to the extent that such
    limits are otherwise permitted under Federal or State law.''.
    (b) Section 2715(a) of the Public Health Service Act, as added by
    section 1001(5) of this Act, <>  is amended by
    striking ``and providing to enrollees'' and inserting ``and providing to
    applicants, enrollees, and policyholders or certificate holders''.

    (c) Subpart II of part A of title XXVII of the Public Health Service
    Act, as added by section 1001(5), is amended by inserting after section
    2715, the following:

    ``SEC. 2715A. <>  PROVISION
    OF ADDITIONAL INFORMATION.

    ``A group health plan and a health insurance issuer offering group
    or individual health insurance coverage shall comply with the provisions
    of section 1311(e)(3) of the Patient Protection and Affordable Care Act,
    except that a plan or coverage that is not offered through an Exchange
    shall only be required to submit the information required to the
    Secretary and the State insurance commissioner, and make such
    information available to the public.''.
    (d) Section 2716 of the Public Health Service Act, as added by
    section 1001(5) of this Act, is amended to read as follows:

    ``SEC. 2716. <>  PROHIBITION ON DISCRIMINATION
    IN FAVOR OF HIGHLY COMPENSATED INDIVIDUALS.

    ``(a) In General.--A group health plan (other than a self-insured
    plan) shall satisfy the requirements of section 105(h)(2) of the
    Internal Revenue Code of 1986 (relating to prohibition on discrimination
    in favor of highly compensated individuals).
    ``(b) Rules and Definitions.--For purposes of this section--
    ``(1) Certain rules to apply.--Rules similar to the rules
    contained in paragraphs (3), (4), and (8) of section 105(h) of
    such Code shall apply.
    ``(2) Highly compensated individual.--The term `highly
    compensated individual' has the meaning given such term by
    section 105(h)(5) of such Code.''.

    (e) Section 2717 of the Public Health Service Act, as added by
    section 1001(5) of this Act, <>  is amended--
    (1) by redesignating subsections (c) and (d) as subsections
    (d) and (e), respectively; and
    (2) by inserting after subsection (b), the following:

    ``(c) Protection of Second Amendment Gun Rights.--
    ``(1) Wellness and prevention programs.--A wellness and
    health promotion activity implemented under subsection (a)(1)(D)
    may not require the disclosure or collection of any information
    relating to--
    ``(A) the presence or storage of a lawfully-
    possessed firearm or ammunition in the residence or on
    the property of an individual; or

    [[Page 885]]

    ``(B) the lawful use, possession, or storage of a
    firearm or ammunition by an individual.
    ``(2) Limitation on data collection.--None of the
    authorities provided to the Secretary under the Patient
    Protection and Affordable Care Act or an amendment made by that
    Act shall be construed to authorize or may be used for the
    collection of any information relating to--
    ``(A) the lawful ownership or possession of a
    firearm or ammunition;
    ``(B) the lawful use of a firearm or ammunition; or
    ``(C) the lawful storage of a firearm or ammunition.
    ``(3) Limitation on databases or data banks.--None of the
    authorities provided to the Secretary under the Patient
    Protection and Affordable Care Act or an amendment made by that
    Act shall be construed to authorize or may be used to maintain
    records of individual ownership or possession of a firearm or
    ammunition.
    ``(4) Limitation on determination of premium rates or
    eligibility for health insurance.--A premium rate may not be
    increased, health insurance coverage may not be denied, and a
    discount, rebate, or reward offered for participation in a
    wellness program may not be reduced or withheld under any health
    benefit plan issued pursuant to or in accordance with the
    Patient Protection and Affordable Care Act or an amendment made
    by that Act on the basis of, or on reliance upon--
    ``(A) the lawful ownership or possession of a
    firearm or ammunition; or
    ``(B) the lawful use or storage of a firearm or
    ammunition.
    ``(5) Limitation on data collection requirements for
    individuals.--No individual shall be required to disclose any
    information under any data collection activity authorized under
    the Patient Protection and Affordable Care Act or an amendment
    made by that Act relating to--
    ``(A) the lawful ownership or possession of a
    firearm or ammunition; or
    ``(B) the lawful use, possession, or storage of a
    firearm or ammunition.''.

    (f) Section 2718 of the Public Health Service Act, as added by
    section 1001(5), is amended to read as follows:

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

    ``(a) Clear Accounting for Costs.--A health insurance issuer
    offering group or individual health insurance coverage (including a
    grandfathered health plan) shall, with respect to each plan year, submit
    to the Secretary a report concerning the ratio of the incurred loss (or
    incurred claims) plus the loss adjustment expense (or change in contract
    reserves) to earned premiums. Such report shall include the percentage
    of total premium revenue, after accounting for collections or receipts
    for risk adjustment and risk corridors and payments of reinsurance, that
    such coverage expends--
    ``(1) on reimbursement for clinical services provided to
    enrollees under such coverage;
    ``(2) for activities that improve health care quality; and

    [[Page 886]]

    ``(3) on all other non-claims costs, including an
    explanation of the nature of such costs, and excluding Federal
    and State taxes and licensing or regulatory fees.

    The Secretary <>  shall make
    reports received under this section available to the public on the
    Internet website of the Department of Health and Human Services.

    ``(b) Ensuring That Consumers Receive Value for Their Premium
    Payments.--
    ``(1) Requirement to provide value for premium payments.--
    ``(A) <>  Requirement.--Beginning
    not later than January 1, 2011, a health insurance
    issuer offering group or individual health insurance
    coverage (including a grandfathered health plan) shall,
    with respect to each plan year, provide an annual rebate
    to each enrollee under such coverage, on a pro rata
    basis, if the ratio of the amount of premium revenue
    expended by the issuer on costs described in paragraphs
    (1) and (2) of subsection (a) to the total amount of
    premium revenue (excluding Federal and State taxes and
    licensing or regulatory fees and after accounting for
    payments or receipts for risk adjustment, risk
    corridors, and reinsurance under sections 1341, 1342,
    and 1343 of the Patient Protection and Affordable Care
    Act) for the plan year (except as provided in
    subparagraph (B)(ii)), is less than--
    ``(i) with respect to a health insurance
    issuer offering coverage in the large group
    market, 85 percent, or such higher percentage as a
    State may by regulation determine; or
    ``(ii) with respect to a health insurance
    issuer offering coverage in the small group market
    or in the individual market, 80 percent, or such
    higher percentage as a State may by regulation
    determine, except that the Secretary may adjust
    such percentage with respect to a State if the
    Secretary determines that the application of such
    80 percent may destabilize the individual market
    in such State.
    ``(B) Rebate amount.--
    ``(i) Calculation of amount.--The total amount
    of an annual rebate required under this paragraph
    shall be in an amount equal to the product of--
    ``(I) the amount by which the
    percentage described in clause (i) or
    (ii) of subparagraph (A) exceeds the
    ratio described in such subparagraph;
    and
    ``(II) the total amount of premium
    revenue (excluding Federal and State
    taxes and licensing or regulatory fees
    and after accounting for payments or
    receipts for risk adjustment, risk
    corridors, and reinsurance under
    sections 1341, 1342, and 1343 of the
    Patient Protection and Affordable Care
    Act) for such plan year.
    ``(ii) Calculation based on average ratio.--
    Beginning on January 1, 2014, <>  the determination made under subparagraph
    (A) for the year involved shall be based on the
    averages of the premiums expended on the costs
    described in such subparagraph and total

    [[Page 887]]

    premium revenue for each of the previous 3 years
    for the plan.
    ``(2) Consideration in setting percentages.--In determining
    the percentages under paragraph (1), a State shall seek to
    ensure adequate participation by health insurance issuers,
    competition in the health insurance market in the State, and
    value for consumers so that premiums are used for clinical
    services and quality improvements.
    ``(3) <>  Enforcement.--The Secretary
    shall promulgate regulations for enforcing the provisions of
    this section and may provide for appropriate penalties.

    ``(c) <>  Definitions.--Not later
    than December 31, 2010, and subject to the certification of the
    Secretary, the National Association of Insurance Commissioners shall
    establish uniform definitions of the activities reported under
    subsection (a) and standardized methodologies for calculating measures
    of such activities, including definitions of which activities, and in
    what regard such activities, constitute activities described in
    subsection (a)(2). Such methodologies shall be designed to take into
    account the special circumstances of smaller plans, different types of
    plans, and newer plans.

    ``(d) Adjustments.--The Secretary may adjust the rates described in
    subsection (b) if the Secretary determines appropriate on account of the
    volatility of the individual market due to the establishment of State
    Exchanges.
    ``(e) Standard Hospital Charges.--Each hospital operating within the
    United States shall for each year establish (and update) and make public
    (in accordance with guidelines developed by the Secretary) a list of the
    hospital's standard charges for items and services provided by the
    hospital, including for diagnosis-related groups established under
    section 1886(d)(4) of the Social Security Act.''.
    (g) Section 2719 of the Public Health Service Act, as added by
    section 1001(4) of this Act, is amended to read as follows:

    ``SEC. 2719. <>  APPEALS PROCESS.

    ``(a) Internal Claims Appeals.--
    ``(1) In general.--A group health plan and a health
    insurance issuer offering group or individual health insurance
    coverage shall implement an effective appeals process for
    appeals of coverage determinations and claims, under which the
    plan or issuer shall, at a minimum--
    ``(A) have in effect an internal claims appeal
    process;
    ``(B) provide notice to enrollees, in a culturally
    and linguistically appropriate manner, of available
    internal and external appeals processes, and the
    availability of any applicable office of health
    insurance consumer assistance or ombudsman established
    under section 2793 to assist such enrollees with the
    appeals processes; and
    ``(C) allow an enrollee to review their file, to
    present evidence and testimony as part of the appeals
    process, and to receive continued coverage pending the
    outcome of the appeals process.
    ``(2) Established processes.--To comply with paragraph (1)--
    ``(A) a group health plan and a health insurance
    issuer offering group health coverage shall provide an
    internal claims and appeals process that initially
    incorporates the

    [[Page 888]]

    claims and appeals procedures (including urgent claims)
    set forth at section 2560.503-1 of title 29, Code of
    Federal Regulations, as published on November 21, 2000
    (65 Fed. Reg. 70256), and shall update such process in
    accordance with any standards established by the
    Secretary of Labor for such plans and issuers; and
    ``(B) a health insurance issuer offering individual
    health coverage, and any other issuer not subject to
    subparagraph (A), shall provide an internal claims and
    appeals process that initially incorporates the claims
    and appeals procedures set forth under applicable law
    (as in existence on the date of enactment of this
    section), and shall update such process in accordance
    with any standards established by the Secretary of
    Health and Human Services for such issuers.

    ``(b) External Review.--A group health plan and a health insurance
    issuer offering group or individual health insurance coverage--
    ``(1) shall comply with the applicable State external review
    process for such plans and issuers that, at a minimum, includes
    the consumer protections set forth in the Uniform External
    Review Model Act promulgated by the National Association of
    Insurance Commissioners and is binding on such plans; or
    ``(2) shall implement an effective external review process
    that meets minimum standards established by the Secretary
    through guidance and that is similar to the process described
    under paragraph (1)--
    ``(A) if the applicable State has not established an
    external review process that meets the requirements of
    paragraph (1); or
    ``(B) if the plan is a self-insured plan that is not
    subject to State insurance regulation (including a State
    law that establishes an external review process
    described in paragraph (1)).

    ``(c) Secretary Authority.--The Secretary may deem the external
    review process of a group health plan or health insurance issuer, in
    operation as of the date of enactment of this section, to be in
    compliance with the applicable process established under subsection (b),
    as determined appropriate by the Secretary.''.
    (h) Subpart II of part A of title XVIII of the Public Health Service
    Act, as added by section 1001(5) of this Act, is amended by inserting
    after section 2719 the following:

    ``SEC. 2719A. <>  PATIENT PROTECTIONS.

    ``(a) Choice of Health Care Professional.--If a group health plan,
    or a health insurance issuer offering group or individual health
    insurance coverage, requires or provides for designation by a
    participant, beneficiary, or enrollee of a participating primary care
    provider, then the plan or issuer shall permit each participant,
    beneficiary, and enrollee to designate any participating primary care
    provider who is available to accept such individual.
    ``(b) Coverage of Emergency Services.--
    ``(1) In general.--If a group health plan, or a health
    insurance issuer offering group or individual health insurance
    issuer, provides or covers any benefits with respect to services
    in an emergency department of a hospital, the plan or issuer

    [[Page 889]]

    shall cover emergency services (as defined in paragraph
    (2)(B))--
    ``(A) without the need for any prior authorization
    determination;
    ``(B) whether the health care provider furnishing
    such services is a participating provider with respect
    to such services;
    ``(C) in a manner so that, if such services are
    provided to a participant, beneficiary, or enrollee--
    ``(i) by a nonparticipating health care
    provider with or without prior authorization; or
    ``(ii)(I) such services will be provided
    without imposing any requirement under the plan
    for prior authorization of services or any
    limitation on coverage where the provider of
    services does not have a contractual relationship
    with the plan for the providing of services that
    is more restrictive than the requirements or
    limitations that apply to emergency department
    services received from providers who do have such
    a contractual relationship with the plan; and
    ``(II) if such services are provided out-of-
    network, the cost-sharing requirement (expressed
    as a copayment amount or coinsurance rate) is the
    same requirement that would apply if such services
    were provided in-network;
    ``(D) without regard to any other term or condition
    of such coverage (other than exclusion or coordination
    of benefits, or an affiliation or waiting period,
    permitted under section 2701 of this Act, section 701 of
    the Employee Retirement Income Security Act of 1974, or
    section 9801 of the Internal Revenue Code of 1986, and
    other than applicable cost-sharing).
    ``(2) Definitions.--In this subsection:
    ``(A) Emergency medical condition.--The term
    `emergency medical condition' means a medical condition
    manifesting itself by acute symptoms of sufficient
    severity (including severe pain) such that a prudent
    layperson, who possesses an average knowledge of health
    and medicine, could reasonably expect the absence of
    immediate medical attention to result in a condition
    described in clause (i), (ii), or (iii) of section
    1867(e)(1)(A) of the Social Security Act.
    ``(B) Emergency services.--The term `emergency
    services' means, with respect to an emergency medical
    condition--
    ``(i) a medical screening examination (as
    required under section 1867 of the Social Security
    Act) that is within the capability of the
    emergency department of a hospital, including
    ancillary services routinely available to the
    emergency department to evaluate such emergency
    medical condition, and
    ``(ii) within the capabilities of the staff
    and facilities available at the hospital, such
    further medical examination and treatment as are
    required under section 1867 of such Act to
    stabilize the patient.

    [[Page 890]]

    ``(C) Stabilize.--The term `to stabilize', with
    respect to an emergency medical condition (as defined in
    subparagraph (A)), has the meaning give in section
    1867(e)(3) of the Social Security Act (42 U.S.C.
    1395dd(e)(3)).

    ``(c) Access to Pediatric Care.--
    ``(1) Pediatric care.--In the case of a person who has a
    child who is a participant, beneficiary, or enrollee under a
    group health plan, or health insurance coverage offered by a
    health insurance issuer in the group or individual market, if
    the plan or issuer requires or provides for the designation of a
    participating primary care provider for the child, the plan or
    issuer shall permit such person to designate a physician
    (allopathic or osteopathic) who specializes in pediatrics as the
    child's primary care provider if such provider participates in
    the network of the plan or issuer.
    ``(2) Construction.--Nothing in paragraph (1) shall be
    construed to waive any exclusions of coverage under the terms
    and conditions of the plan or health insurance coverage with
    respect to coverage of pediatric care.

    ``(d) Patient Access to Obstetrical and Gynecological Care.--
    ``(1) General rights.--
    ``(A) Direct access.--A group health plan, or health
    insurance issuer offering group or individual health
    insurance coverage, described in paragraph (2) may not
    require authorization or referral by the plan, issuer,
    or any person (including a primary care provider
    described in paragraph (2)(B)) in the case of a female
    participant, beneficiary, or enrollee who seeks coverage
    for obstetrical or gynecological care provided by a
    participating health care professional who specializes
    in obstetrics or gynecology. Such professional shall
    agree to otherwise adhere to such plan's or issuer's
    policies and procedures, including procedures regarding
    referrals and obtaining prior authorization and
    providing services pursuant to a treatment plan (if any)
    approved by the plan or issuer.
    ``(B) Obstetrical and gynecological care.--A group
    health plan or health insurance issuer described in
    paragraph (2) shall treat the provision of obstetrical
    and gynecological care, and the ordering of related
    obstetrical and gynecological items and services,
    pursuant to the direct access described under
    subparagraph (A), by a participating health care
    professional who specializes in obstetrics or gynecology
    as the authorization of the primary care provider.
    ``(2) Application of paragraph.--A group health plan, or
    health insurance issuer offering group or individual health
    insurance coverage, described in this paragraph is a group
    health plan or coverage that--
    ``(A) provides coverage for obstetric or gynecologic
    care; and
    ``(B) requires the designation by a participant,
    beneficiary, or enrollee of a participating primary care
    provider.
    ``(3) Construction.--Nothing in paragraph (1) shall be
    construed to--
    ``(A) waive any exclusions of coverage under the
    terms and conditions of the plan or health insurance
    coverage

    [[Page 891]]

    with respect to coverage of obstetrical or gynecological
    care; or
    ``(B) preclude the group health plan or health
    insurance issuer involved from requiring that the
    obstetrical or gynecological provider notify the primary
    care health care professional or the plan or issuer of
    treatment decisions.''.

    (i) Section 2794 of the Public Health Service Act, as added by
    section 1003 of this Act, <>  is amended--
    (1) in subsection (c)(1)--
    (A) in subparagraph (A), by striking ``and'' at the
    end;
    (B) in subparagraph (B), by striking the period and
    inserting ``; and''; and
    (C) by adding at the end the following:
    ``(C) in establishing centers (consistent with
    subsection (d)) at academic or other nonprofit
    institutions to collect medical reimbursement
    information from health insurance issuers, to analyze
    and organize such information, and to make such
    information available to such issuers, health care
    providers, health researchers, health care policy
    makers, and the general public.''; and
    (2) by adding at the end the following:

    ``(d) Medical Reimbursement Data Centers.--
    ``(1) Functions.--A center established under subsection
    (c)(1)(C) shall--
    ``(A) develop fee schedules and other database tools
    that fairly and accurately reflect market rates for
    medical services and the geographic differences in those
    rates;
    ``(B) use the best available statistical methods and
    data processing technology to develop such fee schedules
    and other database tools;
    ``(C) regularly update such fee schedules and other
    database tools to reflect changes in charges for medical
    services;
    ``(D) <>
    make health care cost information readily available to
    the public through an Internet website that allows
    consumers to understand the amounts that health care
    providers in their area charge for particular medical
    services; and
    ``(E) <>  regularly publish
    information concerning the statistical methodologies
    used by the center to analyze health charge data and
    make such data available to researchers and policy
    makers.
    ``(2) <>  Conflicts of interest.--A center
    established under subsection (c)(1)(C) shall adopt by-laws that
    ensures that the center (and all members of the governing board
    of the center) is independent and free from all conflicts of
    interest. Such by-laws shall ensure that the center is not
    controlled or influenced by, and does not have any corporate
    relation to, any individual or entity that may make or receive
    payments for health care services based on the center's analysis
    of health care costs.
    ``(3) Rule of construction.--Nothing in this subsection
    shall be construed to permit a center established under
    subsection (c)(1)(C) to compel health insurance issuers to
    provide data to the center.''.

    [[Page 892]]

    SEC. 10102. AMENDMENTS TO SUBTITLE B.

    (a) <>  Section 1102(a)(2)(B) of this Act is
    amended--
    (1) in the matter preceding clause (i), by striking ``group
    health benefits plan'' and inserting ``group benefits plan
    providing health benefits''; and
    (2) in clause (i)(I), by inserting ``or any agency or
    instrumentality of any of the foregoing'' before the closed
    parenthetical.

    (b) <>  Section 1103(a) of this Act is
    amended--
    (1) in paragraph (1), by inserting ``, or small business
    in,'' after ``residents of any''; and
    (2) by striking paragraph (2) and inserting the following:
    ``(2) Connecting to affordable coverage.--An Internet
    website established under paragraph (1) shall, to the extent
    practicable, provide ways for residents of, and small businesses
    in, any State to receive information on at least the following
    coverage options:
    ``(A) Health insurance coverage offered by health
    insurance issuers, other than coverage that provides
    reimbursement only for the treatment or mitigation of--
    ``(i) a single disease or condition; or
    ``(ii) an unreasonably limited set of diseases
    or conditions (as determined by the Secretary).
    ``(B) Medicaid coverage under title XIX of the
    Social Security Act.
    ``(C) Coverage under title XXI of the Social
    Security Act.
    ``(D) A State health benefits high risk pool, to the
    extent that such high risk pool is offered in such
    State; and
    ``(E) Coverage under a high risk pool under section
    1101.
    ``(F) Coverage within the small group market for
    small businesses and their employees, including
    reinsurance for early retirees under section 1102, tax
    credits available under section 45R of the Internal
    Revenue Code of 1986 (as added by section 1421), and
    other information specifically for small businesses
    regarding affordable health care options.''.

    SEC. 10103. AMENDMENTS TO SUBTITLE C.

    (a) Section 2701(a)(5) of the Public Health Service Act, as added by
    section 1201(4) of this Act, <>  is amended by
    inserting ``(other than self-insured group health plans offered in such
    market)'' after ``such market''.

    (b) Section 2708 of the Public Health Service Act, as added by
    section 1201(4) of this Act, <>  is amended by
    striking ``or individual''.

    (c) Subpart I of part A of title XXVII of the Public Health Service
    Act, as added by section 1201(4) of this Act, is amended by inserting
    after section 2708, the following:

    ``SEC. 2709. <>  COVERAGE FOR INDIVIDUALS
    PARTICIPATING IN APPROVED CLINICAL TRIALS.

    ``(a) Coverage.--
    ``(1) In general.--If a group health plan or a health
    insurance issuer offering group or individual health insurance
    coverage provides coverage to a qualified individual, then such
    plan or issuer--

    [[Page 893]]

    ``(A) may not deny the individual participation in
    the clinical trial referred to in subsection (b)(2);
    ``(B) subject to subsection (c), may not deny (or
    limit or impose additional conditions on) the coverage
    of routine patient costs for items and services
    furnished in connection with participation in the trial;
    and
    ``(C) may not discriminate against the individual on
    the basis of the individual's participation in such
    trial.
    ``(2) Routine patient costs.--
    ``(A) Inclusion.--For purposes of paragraph (1)(B),
    subject to subparagraph (B), routine patient costs
    include all items and services consistent with the
    coverage provided in the plan (or coverage) that is
    typically covered for a qualified individual who is not
    enrolled in a clinical trial.
    ``(B) Exclusion.--For purposes of paragraph (1)(B),
    routine patient costs does not include--
    ``(i) the investigational item, device, or
    service, itself;
    ``(ii) items and services that are provided
    solely to satisfy data collection and analysis
    needs and that are not used in the direct clinical
    management of the patient; or
    ``(iii) a service that is clearly inconsistent
    with widely accepted and established standards of
    care for a particular diagnosis.
    ``(3) Use of in-network providers.--If one or more
    participating providers is participating in a clinical trial,
    nothing in paragraph (1) shall be construed as preventing a plan
    or issuer from requiring that a qualified individual participate
    in the trial through such a participating provider if the
    provider will accept the individual as a participant in the
    trial.
    ``(4) <>  Use of out-of-network.--
    Notwithstanding paragraph (3), paragraph (1) shall apply to a
    qualified individual participating in an approved clinical trial
    that is conducted outside the State in which the qualified
    individual resides.

    ``(b) Qualified Individual Defined.--For purposes of subsection (a),
    the term `qualified individual' means an individual who is a participant
    or beneficiary in a health plan or with coverage described in subsection
    (a)(1) and who meets the following conditions:
    ``(1) The individual is eligible to participate in an
    approved clinical trial according to the trial protocol with
    respect to treatment of cancer or other life-threatening disease
    or condition.
    ``(2) Either--
    ``(A) the referring health care professional is a
    participating health care provider and has concluded
    that the individual's participation in such trial would
    be appropriate based upon the individual meeting the
    conditions described in paragraph (1); or
    ``(B) the participant or beneficiary provides
    medical and scientific information establishing that the
    individual's participation in such trial would be
    appropriate based upon the individual meeting the
    conditions described in paragraph (1).

    ``(c) Limitations on Coverage.--This section shall not be construed
    to require a group health plan, or a health insurance issuer

    [[Page 894]]

    offering group or individual health insurance coverage, to provide
    benefits for routine patient care services provided outside of the
    plan's (or coverage's) health care provider network unless out-of-
    network benefits are otherwise provided under the plan (or coverage).
    ``(d) Approved Clinical Trial Defined.--
    ``(1) In general.--In this section, the term `approved
    clinical trial' means a phase I, phase II, phase III, or phase
    IV clinical trial that is conducted in relation to the
    prevention, detection, or treatment of cancer or other life-
    threatening disease or condition and is described in any of the
    following subparagraphs:
    ``(A) Federally funded trials.--The study or
    investigation is approved or funded (which may include
    funding through in-kind contributions) by one or more of
    the following:
    ``(i) The National Institutes of Health.
    ``(ii) The Centers for Disease Control and
    Prevention.
    ``(iii) The Agency for Health Care Research
    and Quality.
    ``(iv) The Centers for Medicare & Medicaid
    Services.
    ``(v) cooperative group or center of any of
    the entities described in clauses (i) through (iv)
    or the Department of Defense or the Department of
    Veterans Affairs.
    ``(vi) A qualified non-governmental research
    entity identified in the guidelines issued by the
    National Institutes of Health for center support
    grants.
    ``(vii) Any of the following if the conditions
    described in paragraph (2) are met:
    ``(I) The Department of Veterans
    Affairs.
    ``(II) The Department of Defense.
    ``(III) The Department of Energy.
    ``(B) The study or investigation is conducted under
    an investigational new drug application reviewed by the
    Food and Drug Administration.
    ``(C) The study or investigation is a drug trial
    that is exempt from having such an investigational new
    drug application.
    ``(2) <>  Conditions for
    departments.--The conditions described in this paragraph, for a
    study or investigation conducted by a Department, are that the
    study or investigation has been reviewed and approved through a
    system of peer review that the Secretary determines--
    ``(A) to be comparable to the system of peer review
    of studies and investigations used by the National
    Institutes of Health, and
    ``(B) assures unbiased review of the highest
    scientific standards by qualified individuals who have
    no interest in the outcome of the review.

    ``(e) Life-threatening Condition Defined.--In this section, the term
    `life-threatening condition' means any disease or condition from which
    the likelihood of death is probable unless the course of the disease or
    condition is interrupted.
    ``(f) Construction.--Nothing in this section shall be construed to
    limit a plan's or issuer's coverage with respect to clinical trials.

    [[Page 895]]

    ``(g) Application to FEHBP.--Notwithstanding any provision of
    chapter 89 of title 5, United States Code, this section shall apply to
    health plans offered under the program under such chapter.
    ``(h) Preemption.--Notwithstanding any other provision of this Act,
    nothing in this section shall preempt State laws that require a clinical
    trials policy for State regulated health insurance plans that is in
    addition to the policy required under this section.''.
    (d) <>  Section 1251(a) of this Act is
    amended--
    (1) in paragraph (2), by striking ``With'' and inserting
    ``Except as provided in paragraph (3), with''; and
    (2) by adding at the end the following:
    ``(3) Application of certain provisions.--The provisions of
    sections 2715 and 2718 of the Public Health Service Act (as
    added by subtitle A) shall apply to grandfathered health plans
    for plan years beginning on or after the date of enactment of
    this Act.''.

    (e) <>  Section 1253 of
    this Act is amended insert before the period the following: ``, except
    that--
    ``(1) section 1251 shall take effect on the date of
    enactment of this Act; and
    ``(2) the provisions of section 2704 of the Public Health
    Service Act (as amended by section 1201), as they apply to
    enrollees who are under 19 years of age, shall become effective
    for plan years beginning on or after the date that is 6 months
    after the date of enactment of this Act.''.

    (f) Subtitle C of title I of this Act is amended--
    (1) by redesignating section 1253 as section 1255; and
    (2) by inserting after section 1252, the following:

    ``SEC. 1253. <>  ANNUAL REPORT ON SELF-INSURED
    PLANS.

    ``Not later than 1 year after the date of enactment of this Act, and
    annually thereafter, the Secretary of Labor shall prepare an aggregate
    annual report, using data collected from the Annual Return/Report of
    Employee Benefit Plan (Department of Labor Form 5500), that shall
    include general information on self-insured group health plans
    (including plan type, number of participants, benefits offered, funding
    arrangements, and benefit arrangements) as well as data from the
    financial filings of self-insured employers (including information on
    assets, liabilities, contributions, investments, and expenses). The
    Secretary shall submit such reports to the appropriate committees of
    Congress.

    ``SEC. 1254. STUDY OF LARGE GROUP MARKET.

    ``(a) In General.--The Secretary of Health and Human Services shall
    conduct a study of the fully-insured and self-insured group health plan
    markets to--
    ``(1) compare the characteristics of employers (including
    industry, size, and other characteristics as determined
    appropriate by the Secretary), health plan benefits, financial
    solvency, capital reserve levels, and the risks of becoming
    insolvent; and
    ``(2) determine the extent to which new insurance market
    reforms are likely to cause adverse selection in the large group
    market or to encourage small and midsize employers to self-
    insure.

    ``(b) Collection of Information.--In conducting the study under
    subsection (a), the Secretary, in coordination with the Secretary of
    Labor, shall collect information and analyze--

    [[Page 896]]

    ``(1) the extent to which self-insured group health plans
    can offer less costly coverage and, if so, whether lower costs
    are due to more efficient plan administration and lower overhead
    or to the denial of claims and the offering very limited benefit
    packages;
    ``(2) claim denial rates, plan benefit fluctuations (to
    evaluate the extent that plans scale back health benefits during
    economic downturns), and the impact of the limited recourse
    options on consumers; and
    ``(3) any potential conflict of interest as it relates to
    the health care needs of self-insured enrollees and self-insured
    employer's financial contribution or profit margin, and the
    impact of such conflict on administration of the health plan.

    ``(c) Report.--Not later than 1 year after the date of enactment of
    this Act, the Secretary shall submit to the appropriate committees of
    Congress a report concerning the results of the study conducted under
    subsection (a).''.

    SEC. 10104. AMENDMENTS TO SUBTITLE D.

    (a) <>  Section 1301(a) of this Act is amended
    by striking paragraph (2) and inserting the following:
    ``(2) Inclusion of co-op plans and multi-state qualified
    health plans.--Any reference in this title to a qualified health
    plan shall be deemed to include a qualified health plan offered
    through the CO-OP program under section 1322, and a multi-State
    plan under section 1334, unless specifically provided for
    otherwise.
    ``(3) Treatment of qualified direct primary care medical
    home plans.--The Secretary <>  of Health and
    Human Services shall permit a qualified health plan to provide
    coverage through a qualified direct primary care medical home
    plan that meets criteria established by the Secretary, so long
    as the qualified health plan meets all requirements that are
    otherwise applicable and the services covered by the medical
    home plan are coordinated with the entity offering the qualified
    health plan.
    ``(4) Variation based on rating area.--A qualified health
    plan, including a multi-State qualified health plan, may as
    appropriate vary premiums by rating area (as defined in section
    2701(a)(2) of the Public Health Service Act).''.

    (b) <>  Section 1302 of this Act is amended--
    (1) in subsection (d)(2)(B), by striking ``may issue'' and
    inserting ``shall issue''; and
    (2) by adding at the end the following:

    ``(g) Payments to Federally-qualified Health Centers.--If any item
    or service covered by a qualified health plan is provided by a
    Federally-qualified health center (as defined in section 1905(l)(2)(B)
    of the Social Security Act (42 U.S.C. 1396d(l)(2)(B)) to an enrollee of
    the plan, the offeror of the plan shall pay to the center for the item
    or service an amount that is not less than the amount of payment that
    would have been paid to the center under section 1902(bb) of such Act
    (42 U.S.C. 1396a(bb)) for such item or service.''.
    (c) Section 1303 of this Act is amended to read as follows:

    ``SEC. 1303. <>  SPECIAL RULES.

    ``(a) State Opt-out of Abortion Coverage.--

    [[Page 897]]

    ``(1) In general.--A State may elect to prohibit abortion
    coverage in qualified health plans offered through an Exchange
    in such State if such State enacts a law to provide for such
    prohibition.
    ``(2) Termination of opt out.--A State may repeal a law
    described in paragraph (1) and provide for the offering of such
    services through the Exchange.

    ``(b) Special Rules Relating to Coverage of Abortion Services.--
    ``(1) Voluntary choice of coverage of abortion services.--
    ``(A) In general.--Notwithstanding any other
    provision of this title (or any amendment made by this
    title)--
    ``(i) nothing in this title (or any amendment
    made by this title), shall be construed to require
    a qualified health plan to provide coverage of
    services described in subparagraph (B)(i) or
    (B)(ii) as part of its essential health benefits
    for any plan year; and
    ``(ii) subject to subsection (a), the issuer
    of a qualified health plan shall determine whether
    or not the plan provides coverage of services
    described in subparagraph (B)(i) or (B)(ii) as
    part of such benefits for the plan year.
    ``(B) Abortion services.--
    ``(i) Abortions for which public funding is
    prohibited.--The services described in this clause
    are abortions for which the expenditure of Federal
    funds appropriated for the Department of Health
    and Human Services is not permitted, based on the
    law as in effect as of the date that is 6 months
    before the beginning of the plan year involved.
    ``(ii) Abortions for which public funding is
    allowed.--The services described in this clause
    are abortions for which the expenditure of Federal
    funds appropriated for the Department of Health
    and Human Services is permitted, based on the law
    as in effect as of the date that is 6 months
    before the beginning of the plan year involved.
    ``(2) Prohibition on the use of federal funds.--
    ``(A) In general.--If a qualified health plan
    provides coverage of services described in paragraph
    (1)(B)(i), the issuer of the plan shall not use any
    amount attributable to any of the following for purposes
    of paying for such services:
    ``(i) The credit under section 36B of the
    Internal Revenue Code of 1986 (and the amount (if
    any) of the advance payment of the credit under
    section 1412 of the Patient Protection and
    Affordable Care Act).
    ``(ii) Any cost-sharing reduction under
    section 1402 of the Patient Protection and
    Affordable Care Act (and the amount (if any) of
    the advance payment of the reduction under section
    1412 of the Patient Protection and Affordable Care
    Act).
    ``(B) Establishment of allocation accounts.--In the
    case of a plan to which subparagraph (A) applies, the
    issuer of the plan shall--

    [[Page 898]]

    ``(i) collect from each enrollee in the plan
    (without regard to the enrollee's age, sex, or
    family status) a separate payment for each of the
    following:
    ``(I) an amount equal to the portion
    of the premium to be paid directly by
    the enrollee for coverage under the plan
    of services other than services
    described in paragraph (1)(B)(i) (after
    reduction for credits and cost-sharing
    reductions described in subparagraph
    (A)); and
    ``(II) an amount equal to the
    actuarial value of the coverage of
    services described in paragraph
    (1)(B)(i), and
    ``(ii) shall deposit all such separate
    payments into separate allocation accounts as
    provided in subparagraph (C).
    In the case of an enrollee whose premium for coverage
    under the plan is paid through employee payroll deposit,
    the separate payments required under this subparagraph
    shall each be paid by a separate deposit.
    ``(C) Segregation of funds.--
    ``(i) In general.--The issuer of a plan to
    which subparagraph (A) applies shall establish
    allocation accounts described in clause (ii) for
    enrollees receiving amounts described in
    subparagraph (A).
    ``(ii) Allocation accounts.--The issuer of a
    plan to which subparagraph (A) applies shall
    deposit--
    ``(I) all payments described in
    subparagraph (B)(i)(I) into a separate
    account that consists solely of such
    payments and that is used exclusively to
    pay for services other than services
    described in paragraph (1)(B)(i); and
    ``(II) all payments described in
    subparagraph (B)(i)(II) into a separate
    account that consists solely of such
    payments and that is used exclusively to
    pay for services described in paragraph
    (1)(B)(i).
    ``(D) Actuarial value.--
    ``(i) In general.--The issuer of a qualified
    health plan shall estimate the basic per enrollee,
    per month cost, determined on an average actuarial
    basis, for including coverage under the qualified
    health plan of the services described in paragraph
    (1)(B)(i).
    ``(ii) Considerations.--In making such
    estimate, the issuer--
    ``(I) may take into account the
    impact on overall costs of the inclusion
    of such coverage, but may not take into
    account any cost reduction estimated to
    result from such services, including
    prenatal care, delivery, or postnatal
    care;
    ``(II) shall estimate such costs as
    if such coverage were included for the
    entire population covered; and
    ``(III) may not estimate such a cost
    at less than $1 per enrollee, per month.
    ``(E) Ensuring compliance with segregation
    requirements.--

    [[Page 899]]

    ``(i) In general.--Subject to clause (ii),
    State health insurance commissioners shall ensure
    that health plans comply with the segregation
    requirements in this subsection through the
    segregation of plan funds in accordance with
    applicable provisions of generally accepted
    accounting requirements, circulars on funds
    management of the Office of Management and Budget,
    and guidance on accounting of the Government
    Accountability Office.
    ``(ii) Clarification.--Nothing in clause (i)
    shall prohibit the right of an individual or
    health plan to appeal such action in courts of
    competent jurisdiction.
    ``(3) Rules relating to notice.--
    ``(A) Notice.--A qualified health plan that provides
    for coverage of the services described in paragraph
    (1)(B)(i) shall provide a notice to enrollees, only as
    part of the summary of benefits and coverage
    explanation, at the time of enrollment, of such
    coverage.
    ``(B) Rules relating to payments.--The notice
    described in subparagraph (A), any advertising used by
    the issuer with respect to the plan, any information
    provided by the Exchange, and any other information
    specified by the Secretary shall provide information
    only with respect to the total amount of the combined
    payments for services described in paragraph (1)(B)(i)
    and other services covered by the plan.
    ``(4) No discrimination on basis of provision of abortion.--
    No qualified health plan offered through an Exchange may
    discriminate against any individual health care provider or
    health care facility because of its unwillingness to provide,
    pay for, provide coverage of, or refer for abortions

    ``(c) Application of State and Federal Laws Regarding Abortion.--
    ``(1) No preemption of state laws regarding abortion.--
    Nothing in this Act shall be construed to preempt or otherwise
    have any effect on State laws regarding the prohibition of (or
    requirement of) coverage, funding, or procedural requirements on
    abortions, including parental notification or consent for the
    performance of an abortion on a minor.
    ``(2) No effect on federal laws regarding abortion.--
    ``(A) In general.--Nothing in this Act shall be
    construed to have any effect on Federal laws regarding--
    ``(i) conscience protection;
    ``(ii) willingness or refusal to provide
    abortion; and
    ``(iii) discrimination on the basis of the
    willingness or refusal to provide, pay for, cover,
    or refer for abortion or to provide or participate
    in training to provide abortion.
    ``(3) No effect on federal civil rights law.--Nothing in
    this subsection shall alter the rights and obligations of
    employees and employers under title VII of the Civil Rights Act
    of 1964.

    ``(d) Application of Emergency Services Laws.--Nothing in this Act
    shall be construed to relieve any health care provider from providing
    emergency services as required by State or Federal law, including
    section 1867 of the Social Security Act (popularly known as
    `EMTALA').''.

    [[Page 900]]

    (d) <>  Section 1304 of this Act is amended by
    adding at the end the following:

    ``(e) <>  Educated Health Care Consumers.--The
    term `educated health care consumer' means an individual who is
    knowledgeable about the health care system, and has background or
    experience in making informed decisions regarding health, medical, and
    scientific matters.''.

    (e) <>  Section 1311(d) of this Act is
    amended--
    (1) in paragraph (3)(B), by striking clause (ii) and
    inserting the following:
    ``(ii) State must assume cost.--A State shall
    make payments--
    ``(I) to an individual enrolled in a
    qualified health plan offered in such
    State; or
    ``(II) on behalf of an individual
    described in subclause (I) directly to
    the qualified health plan in which such
    individual is enrolled;
    to defray the cost of any additional benefits
    described in clause (i).''; and
    (2) in paragraph (6)(A), by inserting ``educated'' before
    ``health care''.

    (f) Section 1311(e) of this Act is amended--
    (1) in paragraph (2), by striking ``may'' in the second
    sentence and inserting ``shall''; and
    (2) by adding at the end the following:
    ``(3) Transparency in coverage.--
    ``(A) <>  In general.--
    The Exchange shall require health plans seeking
    certification as qualified health plans to submit to the
    Exchange, the Secretary, the State insurance
    commissioner, and make available to the public, accurate
    and timely disclosure of the following information:
    ``(i) Claims payment policies and practices.
    ``(ii) Periodic financial disclosures.
    ``(iii) Data on enrollment.
    ``(iv) Data on disenrollment.
    ``(v) Data on the number of claims that are
    denied.
    ``(vi) Data on rating practices.
    ``(vii) Information on cost-sharing and
    payments with respect to any out-of-network
    coverage.
    ``(viii) Information on enrollee and
    participant rights under this title.
    ``(ix) Other information as determined
    appropriate by the Secretary.
    ``(B) Use of plain language.--The information
    required to be submitted under subparagraph (A) shall be
    provided in plain language. <>  The
    term `plain language' means language that the intended
    audience, including individuals with limited English
    proficiency, can readily understand and use because that
    language is concise, well-organized, and follows other
    best practices of plain language
    writing. <>  The Secretary and the
    Secretary of Labor shall jointly develop and issue
    guidance on best practices of plain language writing.
    ``(C) Cost sharing transparency.--The Exchange shall
    require health plans seeking certification as qualified
    health plans to permit individuals to learn the amount
    of cost-sharing (including deductibles, copayments, and

    [[Page 901]]

    coinsurance) under the individual's plan or coverage
    that the individual would be responsible for paying with
    respect to the furnishing of a specific item or service
    by a participating provider in a timely manner upon the
    request of the individual. <>  At a
    minimum, such information shall be made available to
    such individual through an Internet website and such
    other means for individuals without access to the
    Internet.
    ``(D) Group health plans.--The Secretary of Labor
    shall update and harmonize the Secretary's rules
    concerning the accurate and timely disclosure to
    participants by group health plans of plan disclosure,
    plan terms and conditions, and periodic financial
    disclosure with the standards established by the
    Secretary under subparagraph (A).''.

    (g) <>  Section 1311(g)(1) of this Act is
    amended--
    (1) in subparagraph (C), by striking ``; and'' and inserting
    a semicolon;
    (2) in subparagraph (D), by striking the period and
    inserting ``; and''; and
    (3) by adding at the end the following:
    ``(E) the implementation of activities to reduce
    health and health care disparities, including through
    the use of language services, community outreach, and
    cultural competency trainings.''.

    (h) Section 1311(i)(2)((B) of this Act is amended by striking
    ``small business development centers'' and inserting ``resource partners
    of the Small Business Administration''.
    (i) <>  Section 1312 of this Act is amended--
    (1) in subsection (a)(1), by inserting ``and for which such
    individual is eligible'' before the period;
    (2) in subsection (e)--
    (A) in paragraph (1), by inserting ``and employers''
    after ``enroll individuals''; and
    (B) by striking the flush sentence at the end; and
    (3) in subsection (f)(1)(A)(ii), by striking the
    parenthetical.

    (j)(1) Subparagraph (B) of section 1313(a)(6) <>  of this Act is hereby deemed null, void, and of no effect.

    (2) Section 3730(e) of title 31, United States Code, is amended by
    striking paragraph (4) and inserting the following:
    ``(4)(A) <>  The court shall dismiss an
    action or claim under this section, unless opposed by the
    Government, if substantially the same allegations or
    transactions as alleged in the action or claim were publicly
    disclosed--
    ``(i) in a Federal criminal, civil, or
    administrative hearing in which the Government or its
    agent is a party;
    ``(ii) in a congressional, Government Accountability
    Office, or other Federal report, hearing, audit, or
    investigation; or
    ``(iii) from the news media,
    unless the action is brought by the Attorney General or the
    person bringing the action is an original source of the
    information.
    ``(B) <>  For purposes of this paragraph,
    ``original source'' means an individual who either (i) prior to
    a public disclosure under subsection (e)(4)(a), has voluntarily
    disclosed to the

    [[Page 902]]

    Government the information on which allegations or transactions
    in a claim are based, or (2) who has knowledge that is
    independent of and materially adds to the publicly disclosed
    allegations or transactions, and who has voluntarily provided
    the information to the Government before filing an action under
    this section.''.

    (k) <>  Section 1313(b) of this Act is
    amended--
    (1) in paragraph (3), by striking ``and'' at the end;
    (2) by redesignating paragraph (4) as paragraph (5); and
    (3) by inserting after paragraph (3) the following:
    ``(4) a survey of the cost and affordability of health care
    insurance provided under the Exchanges for owners and employees
    of small business concerns (as defined under section 3 of the
    Small Business Act (15 U.S.C. 632)), including data on enrollees
    in Exchanges and individuals purchasing health insurance
    coverage outside of Exchanges; and''.

    (l) <>  Section 1322(b) of this Act is
    amended--
    (1) by redesignating paragraph (3) as paragraph (4); and
    (2) by inserting after paragraph (2), the following:
    ``(3) <>  Repayment of loans
    and grants.--Not later than July 1, 2013, and prior to awarding
    loans and grants under the CO-OP program, the Secretary shall
    promulgate regulations with respect to the repayment of such
    loans and grants in a manner that is consistent with State
    solvency regulations and other similar State laws that may
    apply. In promulgating such regulations, the Secretary shall
    provide that such loans shall be repaid within 5 years and such
    grants shall be repaid within 15 years, taking into
    consideration any appropriate State reserve requirements,
    solvency regulations, and requisite surplus note arrangements
    that must be constructed in a State to provide for such
    repayment prior to awarding such loans and grants.''.

    (m) <>  Part III of subtitle D of title I of
    this Act is amended by striking section 1323.

    (n) <>  Section 1324(a) of this Act is amended
    by striking ``, a community health'' and all that follows through
    ``1333(b)'' and inserting ``, or a multi-State qualified health plan
    under section 1334''.

    (o) <>  Section 1331 of this Act is amended--
    (1) in subsection (d)(3)(A)(i), by striking ``85'' and
    inserting ``95''; and
    (2) in subsection (e)(1)(B), by inserting before the
    semicolon the following: ``, or, in the case of an alien
    lawfully present in the United States, whose income is not
    greater than 133 percent of the poverty line for the size of the
    family involved but who is not eligible for the Medicaid program
    under title XIX of the Social Security Act by reason of such
    alien status''.

    (p) <>  Section 1333 of this Act is amended by
    striking subsection (b).

    (q) Part IV of subtitle D of title I of this Act is amended by
    adding at the end the following:

    ``SEC. 1334. <>  MULTI-STATE PLANS.

    ``(a) Oversight by the Office of Personnel Management.--
    ``(1) In general.--The Director of the Office of Personnel
    Management (referred to in this section as the `Director') shall
    enter into contracts with health insurance issuers (which may

    [[Page 903]]

    include a group of health insurance issuers affiliated either by
    common ownership and control or by the common use of a
    nationally licensed service mark), without regard to section 5
    of title 41, United States Code, or other statutes requiring
    competitive bidding, to offer at least 2 multi-State qualified
    health plans through each Exchange in each State. Such plans
    shall provide individual, or in the case of small employers,
    group coverage.
    ``(2) Terms.--Each contract entered into under paragraph (1)
    shall be for a uniform term of at least 1 year, but may be made
    automatically renewable from term to term in the absence of
    notice of termination by either party. In entering into such
    contracts, the Director shall ensure that health benefits
    coverage is provided in accordance with the types of coverage
    provided for under section 2701(a)(1)(A)(i) of the Public Health
    Service Act.
    ``(3) Non-profit entities.--In entering into contracts under
    paragraph (1), the Director shall ensure that at least one
    contract is entered into with a non-profit entity.
    ``(4) Administration.--The Director shall implement this
    subsection in a manner similar to the manner in which the
    Director implements the contracting provisions with respect to
    carriers under the Federal employees health benefit program
    under chapter 89 of title 5, United States Code, including
    (through negotiating with each multi-state plan)--
    ``(A) a medical loss ratio;
    ``(B) a profit margin;
    ``(C) the premiums to be charged; and
    ``(D) such other terms and conditions of coverage as
    are in the interests of enrollees in such plans.
    ``(5) Authority to protect consumers.--The Director may
    prohibit the offering of any multi-State health plan that does
    not meet the terms and conditions defined by the Director with
    respect to the elements described in subparagraphs (A) through
    (D) of paragraph (4).
    ``(6) Assured availability of varied coverage.--In entering
    into contracts under this subsection, the Director shall ensure
    that with respect to multi-State qualified health plans offered
    in an Exchange, there is at least one such plan that does not
    provide coverage of services described in section
    1303(b)(1)(B)(i).
    ``(7) Withdrawal.--Approval of a contract under this
    subsection may be withdrawn by the Director only after notice
    and opportunity for hearing to the issuer concerned without
    regard to subchapter II of chapter 5 and chapter 7 of title 5,
    United States Code.

    ``(b) Eligibility.--A health insurance issuer shall be eligible to
    enter into a contract under subsection (a)(1) if such issuer--
    ``(1) agrees to offer a multi-State qualified health plan
    that meets the requirements of subsection (c) in each Exchange
    in each State;
    ``(2) is licensed in each State and is subject to all
    requirements of State law not inconsistent with this section,
    including the standards and requirements that a State imposes
    that do not prevent the application of a requirement of part A
    of title XXVII of the Public Health Service Act or a requirement
    of this title;

    [[Page 904]]

    ``(3) otherwise complies with the minimum standards
    prescribed for carriers offering health benefits plans under
    section 8902(e) of title 5, United States Code, to the extent
    that such standards do not conflict with a provision of this
    title; and
    ``(4) meets such other requirements as determined
    appropriate by the Director, in consultation with the Secretary.

    ``(c) Requirements for Multi-State Qualified Health Plan.--
    ``(1) In general.--A multi-State qualified health plan meets
    the requirements of this subsection if, in the determination of
    the Director--
    ``(A) the plan offers a benefits package that is
    uniform in each State and consists of the essential
    benefits described in section 1302;
    ``(B) the plan meets all requirements of this title
    with respect to a qualified health plan, including
    requirements relating to the offering of the bronze,
    silver, and gold levels of coverage and catastrophic
    coverage in each State Exchange;
    ``(C) except as provided in paragraph (5), the
    issuer provides for determinations of premiums for
    coverage under the plan on the basis of the rating
    requirements of part A of title XXVII of the Public
    Health Service Act; and
    ``(D) the issuer offers the plan in all geographic
    regions, and in all States that have adopted adjusted
    community rating before the date of enactment of this
    Act.
    ``(2) States may offer additional benefits.--Nothing in
    paragraph (1)(A) shall preclude a State from requiring that
    benefits in addition to the essential health benefits required
    under such paragraph be provided to enrollees of a multi-State
    qualified health plan offered in such State.
    ``(3) Credits.--
    ``(A) In general.--An individual enrolled in a
    multi-State qualified health plan under this section
    shall be eligible for credits under section 36B of the
    Internal Revenue Code of 1986 and cost sharing
    assistance under section 1402 in the same manner as an
    individual who is enrolled in a qualified health plan.
    ``(B) No additional federal cost.--A requirement by
    a State under paragraph (2) that benefits in addition to
    the essential health benefits required under paragraph
    (1)(A) be provided to enrollees of a multi-State
    qualified health plan shall not affect the amount of a
    premium tax credit provided under section 36B of the
    Internal Revenue Code of 1986 with respect to such plan.
    ``(4) State must assume cost.--A State shall make payments--
    ``(A) to an individual enrolled in a multi-State
    qualified health plan offered in such State; or
    ``(B) on behalf of an individual described in
    subparagraph (A) directly to the multi-State qualified
    health plan in which such individual is enrolled;
    to defray the cost of any additional benefits described in
    paragraph (2).
    ``(5) Application of certain state rating requirements.--
    With respect to a multi-State qualified health plan that is
    offered in a State with age rating requirements that

    [[Page 905]]

    are lower than 3:1, the State may require that Exchanges
    operating in such State only permit the offering of such multi-
    State qualified health plans if such plans comply with the
    State's more protective age rating requirements.

    ``(d) Plans Deemed To Be Certified.--A multi-State qualified health
    plan that is offered under a contract under subsection (a) shall be
    deemed to be certified by an Exchange for purposes of section
    1311(d)(4)(A).
    ``(e) <>  Phase-in.--Notwithstanding paragraphs
    (1) and (2) of subsection (b), the Director shall enter into a contract
    with a health insurance issuer for the offering of a multi-State
    qualified health plan under subsection (a) if--
    ``(1) with respect to the first year for which the issuer
    offers such plan, such issuer offers the plan in at least 60
    percent of the States;
    ``(2) with respect to the second such year, such issuer
    offers the plan in at least 70 percent of the States;
    ``(3) with respect to the third such year, such issuer
    offers the plan in at least 85 percent of the States; and
    ``(4) with respect to each subsequent year, such issuer
    offers the plan in all States.

    ``(f) Applicability.--The requirements under chapter 89 of title 5,
    United States Code, applicable to health benefits plans under such
    chapter shall apply to multi-State qualified health plans provided for
    under this section to the extent that such requirements do not conflict
    with a provision of this title.
    ``(g) Continued Support for FEHBP.--
    ``(1) Maintenance of effort.--Nothing in this section shall
    be construed to permit the Director to allocate fewer financial
    or personnel resources to the functions of the Office of
    Personnel Management related to the administration of the
    Federal Employees Health Benefit Program under chapter 89 of
    title 5, United States Code.
    ``(2) Separate risk pool.--Enrollees in multi-State
    qualified health plans under this section shall be treated as a
    separate risk pool apart from enrollees in the Federal Employees
    Health Benefit Program under chapter 89 of title 5, United
    States Code.
    ``(3) Authority to establish separate entities.--The
    Director may establish such separate units or offices within the
    Office of Personnel Management as the Director determines to be
    appropriate to ensure that the administration of multi-State
    qualified health plans under this section does not interfere
    with the effective administration of the Federal Employees
    Health Benefit Program under chapter 89 of title 5, United
    States Code.
    ``(4) Effective oversight.--The Director may appoint such
    additional personnel as may be necessary to enable the Director
    to carry out activities under this section.
    ``(5) Assurance of separate program.--In carrying out this
    section, the Director shall ensure that the program under this
    section is separate from the Federal Employees Health Benefit
    Program under chapter 89 of title 5, United States Code.
    Premiums paid for coverage under a multi-State qualified health
    plan under this section shall not be considered to be Federal
    funds for any purposes.

    [[Page 906]]

    ``(6) FEHBP plans not required to participate.--Nothing in
    this section shall require that a carrier offering coverage
    under the Federal Employees Health Benefit Program under chapter
    89 of title 5, United States Code, also offer a multi-State
    qualified health plan under this section.

    ``(h) <>  Advisory Board.--The Director shall
    establish an advisory board to provide recommendations on the activities
    described in this section. A significant percentage of the members of
    such board shall be comprised of enrollees in a multi-State qualified
    health plan, or representatives of such enrollees.

    ``(i) Authorization of Appropriations.--There is authorized to be
    appropriated, such sums as may be necessary to carry out this
    section.''.
    (r) <>  Section 1341 of this Act is amended--
    (1) in the section heading, by striking ``and small group
    markets'' and inserting ``market'';
    (2) in subsection (b)(2)(B), by striking ``paragraph
    (1)(A)'' and inserting ``paragraph (1)(B)''; and
    (3) in subsection (c)(1)(A), by striking ``and small group
    markets'' and inserting ``market''.

    SEC. 10105. AMENDMENTS TO SUBTITLE E.

    (a) Section 36B(b)(3)(A)(ii) of the Internal Revenue Code of 1986,
    as added by section 1401(a) of this Act, <>  is
    amended by striking ``is in excess of'' and inserting ``equals or
    exceeds''.

    (b) Section 36B(c)(1)(A) of the Internal Revenue Code of 1986, as
    added by section 1401(a) of this Act, is amended by inserting ``equals
    or'' before ``exceeds''.
    (c) Section 36B(c)(2)(C)(iv) of the Internal Revenue Code of 1986,
    as added by section 1401(a) of this Act, is amended by striking
    ``subsection (b)(3)(A)(ii)'' and inserting ``subsection
    (b)(3)(A)(iii)''.
    (d) <>  Section 1401(d) of this Act is amended
    by adding at the end the following:
    ``(3) Section 6211(b)(4)(A) of the Internal Revenue Code of
    1986 is amended by inserting `36B,' after `36A,'.''.

    (e)(1) Subparagraph (B) of section 45R(d)(3) of the Internal Revenue
    Code of 1986, as added by section 1421(a) <>  of this
    Act, is amended to read as follows:
    ``(B) Dollar amount.--For purposes of paragraph
    (1)(B) and subsection (c)(2)--
    ``(i) 2010, 2011, 2012, and 2013.--The dollar
    amount in effect under this paragraph for taxable
    years beginning in 2010, 2011, 2012, or 2013 is
    $25,000.
    ``(ii) Subsequent years.--In the case of a
    taxable year beginning in a calendar year after
    2013, the dollar amount in effect under this
    paragraph shall be equal to $25,000, multiplied by
    the cost-of-living adjustment under section
    1(f)(3) for the calendar year, determined by
    substituting `calendar year 2012' for `calendar
    year 1992' in subparagraph (B) thereof.''.

    (2) Subsection (g) of section 45R of the Internal Revenue Code of
    1986, as added by section 1421(a) of this Act, is amended by striking
    ``2011'' both places it appears and inserting ``2010, 2011''.
    (3) Section 280C(h) of the Internal Revenue Code of 1986, as added
    by section 1421(d)(1) of this Act, <>  is amended by
    striking ``2011'' and inserting ``2010, 2011''.

    [[Page 907]]

    (4) <>  Section 1421(f) of this Act is
    amended by striking ``2010'' both places it appears and inserting
    ``2009''.

    (5) <>  The amendments made by this
    subsection shall take effect as if included in the enactment of section
    1421 of this Act.

    (f) Part I of subtitle E of title I of this Act is amended by adding
    at the end of subpart B, the following:

    ``SEC. 1416. STUDY OF GEOGRAPHIC VARIATION IN APPLICATION OF FPL.

    ``(a) In General.--The Secretary shall conduct a study to examine
    the feasibility and implication of adjusting the application of the
    Federal poverty level under this subtitle (and the amendments made by
    this subtitle) for different geographic areas so as to reflect the
    variations in cost-of-living among different areas within the United
    States. <>  If the Secretary determines that an
    adjustment is feasible, the study should include a methodology to make
    such an adjustment. <>  Not
    later than January 1, 2013, the Secretary shall submit to Congress a
    report on such study and shall include such recommendations as the
    Secretary determines appropriate.

    ``(b) Inclusion of Territories.--
    ``(1) In general.--The Secretary shall ensure that the study
    under subsection (a) covers the territories of the United States
    and that special attention is paid to the disparity that exists
    among poverty levels and the cost of living in such territories
    and to the impact of such disparity on efforts to expand health
    coverage and ensure health care.
    ``(2) Territories defined.--In this subsection, the term
    `territories of the United States' includes the Commonwealth of
    Puerto Rico, the United States Virgin Islands, Guam, the
    Northern Mariana Islands, and any other territory or possession
    of the United States.''.

    SEC. 10106. AMENDMENTS TO SUBTITLE F.

    (a) <>  Section 1501(a)(2) of this Act is
    amended to read as follows:
    ``(2) Effects on the national economy and interstate
    commerce.--The effects described in this paragraph are the
    following:
    ``(A) The requirement regulates activity that is
    commercial and economic in nature: economic and
    financial decisions about how and when health care is
    paid for, and when health insurance is purchased. In the
    absence of the requirement, some individuals would make
    an economic and financial decision to forego health
    insurance coverage and attempt to self-insure, which
    increases financial risks to households and medical
    providers.
    ``(B) Health insurance and health care services are
    a significant part of the national economy. National
    health spending is projected to increase from
    $2,500,000,000,000, or 17.6 percent of the economy, in
    2009 to $4,700,000,000,000 in 2019. Private health
    insurance spending is projected to be $854,000,000,000
    in 2009, and pays for medical supplies, drugs, and
    equipment that are shipped in interstate commerce. Since
    most health insurance is sold by national or regional
    health insurance companies, health insurance is sold in
    interstate commerce and claims payments flow through
    interstate commerce.

    [[Page 908]]

    ``(C) The requirement, together with the other
    provisions of this Act, will add millions of new
    consumers to the health insurance market, increasing the
    supply of, and demand for, health care services, and
    will increase the number and share of Americans who are
    insured.
    ``(D) The requirement achieves near-universal
    coverage by building upon and strengthening the private
    employer-based health insurance system, which covers
    176,000,000 Americans nationwide. In Massachusetts, a
    similar requirement has strengthened private employer-
    based coverage: despite the economic downturn, the
    number of workers offered employer-based coverage has
    actually increased.
    ``(E) The economy loses up to $207,000,000,000 a
    year because of the poorer health and shorter lifespan
    of the uninsured. By significantly reducing the number
    of the uninsured, the requirement, together with the
    other provisions of this Act, will significantly reduce
    this economic cost.
    ``(F) The cost of providing uncompensated care to
    the uninsured was $43,000,000,000 in 2008. To pay for
    this cost, health care providers pass on the cost to
    private insurers, which pass on the cost to families.
    This cost-shifting increases family premiums by on
    average over $1,000 a year. By significantly reducing
    the number of the uninsured, the requirement, together
    with the other provisions of this Act, will lower health
    insurance premiums.
    ``(G) 62 percent of all personal bankruptcies are
    caused in part by medical expenses. By significantly
    increasing health insurance coverage, the requirement,
    together with the other provisions of this Act, will
    improve financial security for families.
    ``(H) Under the Employee Retirement Income Security
    Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health
    Service Act (42 U.S.C. 201 et seq.), and this Act, the
    Federal Government has a significant role in regulating
    health insurance. The requirement is an essential part
    of this larger regulation of economic activity, and the
    absence of the requirement would undercut Federal
    regulation of the health insurance market.
    ``(I) Under sections 2704 and 2705 of the Public
    Health Service Act (as added by section 1201 of this
    Act), if there were no requirement, many individuals
    would wait to purchase health insurance until they
    needed care. By significantly increasing health
    insurance coverage, the requirement, together with the
    other provisions of this Act, will minimize this adverse
    selection and broaden the health insurance risk pool to
    include healthy individuals, which will lower health
    insurance premiums. The requirement is essential to
    creating effective health insurance markets in which
    improved health insurance products that are guaranteed
    issue and do not exclude coverage of pre-existing
    conditions can be sold.
    ``(J) Administrative costs for private health
    insurance, which were $90,000,000,000 in 2006, are 26 to
    30 percent of premiums in the current individual and
    small group

    [[Page 909]]

    markets. By significantly increasing health insurance
    coverage and the size of purchasing pools, which will
    increase economies of scale, the requirement, together
    with the other provisions of this Act, will
    significantly reduce administrative costs and lower
    health insurance premiums. The requirement is essential
    to creating effective health insurance markets that do
    not require underwriting and eliminate its associated
    administrative costs.''.

    (b)(1) Section 5000A(b)(1) of the Internal Revenue Code of 1986, as
    added by section 1501(b) of this Act, <>  is
    amended to read as follows:
    ``(1) In general.--If a taxpayer who is an applicable
    individual, or an applicable individual for whom the taxpayer is
    liable under paragraph (3), fails to meet the requirement of
    subsection (a) for 1 or more months, then, except as provided in
    subsection (e), there is hereby imposed on the taxpayer a
    penalty with respect to such failures in the amount determined
    under subsection (c).''.
    (2) Paragraphs (1) and (2) of section 5000A(c) of the
    Internal Revenue Code of 1986, as so added, are amended to read
    as follows:
    ``(1) In general.--The amount of the penalty imposed by this
    section on any taxpayer for any taxable year with respect to
    failures described in subsection (b)(1) shall be equal to the
    lesser of--
    ``(A) the sum of the monthly penalty amounts
    determined under paragraph (2) for months in the taxable
    year during which 1 or more such failures occurred, or
    ``(B) an amount equal to the national average
    premium for qualified health plans which have a bronze
    level of coverage, provide coverage for the applicable
    family size involved, and are offered through Exchanges
    for plan years beginning in the calendar year with or
    within which the taxable year ends.
    ``(2) Monthly penalty amounts.--For purposes of paragraph
    (1)(A), the monthly penalty amount with respect to any taxpayer
    for any month during which any failure described in subsection
    (b)(1) occurred is an amount equal to \1/12\ of the greater of
    the following amounts:
    ``(A) Flat dollar amount.--An amount equal to the
    lesser of--
    ``(i) the sum of the applicable dollar amounts
    for all individuals with respect to whom such
    failure occurred during such month, or
    ``(ii) 300 percent of the applicable dollar
    amount (determined without regard to paragraph
    (3)(C)) for the calendar year with or within which
    the taxable year ends.
    ``(B) Percentage of income.--An amount equal to the
    following percentage of the taxpayer's household income
    for the taxable year:
    ``(i) 0.5 percent for taxable years beginning
    in 2014.
    ``(ii) 1.0 percent for taxable years beginning
    in 2015.
    ``(iii) 2.0 percent for taxable years
    beginning after 2015.''.

    [[Page 910]]

    (3) Section 5000A(c)(3) of the Internal Revenue Code of 1986, as
    added by section 1501(b) of this Act, <>  is
    amended by striking ``$350'' and inserting ``$495''.

    (c) Section 5000A(d)(2)(A) of the Internal Revenue Code of 1986, as
    added by section 1501(b) of this Act, is amended to read as follows:
    ``(A) Religious conscience exemption.--Such term
    shall not include any individual for any month if such
    individual has in effect an exemption under section
    1311(d)(4)(H) of the Patient Protection and Affordable
    Care Act which certifies that such individual is--
    ``(i) a member of a recognized religious sect
    or division thereof which is described in section
    1402(g)(1), and
    ``(ii) an adherent of established tenets or
    teachings of such sect or division as described in
    such section.''.

    (d) Section 5000A(e)(1)(C) of the Internal Revenue Code of 1986, as
    added by section 1501(b) of this Act, is amended to read as follows:
    ``(C) Special rules for individuals related to
    employees.--For purposes of subparagraph (B)(i), if an
    applicable individual is eligible for minimum essential
    coverage through an employer by reason of a relationship
    to an employee, the determination under subparagraph (A)
    shall be made by reference to required contribution of
    the employee.''.

    (e) Section 4980H(b) of the Internal Revenue Code of 1986, as added
    by section 1513(a) of this Act, <>  is amended to
    read as follows:

    ``(b) Large Employers With Waiting Periods Exceeding 60 Days.--
    ``(1) In general.--In the case of any applicable large
    employer which requires an extended waiting period to enroll in
    any minimum essential coverage under an employer-sponsored plan
    (as defined in section 5000A(f)(2)), there is hereby imposed on
    the employer an assessable payment of $600 for each full-time
    employee of the employer to whom the extended waiting period
    applies.
    ``(2) <>  Extended waiting period.--The
    term `extended waiting period' means any waiting period (as
    defined in section 2701(b)(4) of the Public Health Service Act)
    which exceeds 60 days.''.

    (f)(1) Subparagraph (A) of section 4980H(d)(4) of the Internal
    Revenue Code of 1986, as added by section 1513(a) of this Act, is
    amended by inserting ``, with respect to any month,'' after ``means''.
    (2) Section 4980H(d)(2) of the Internal Revenue Code of 1986, as
    added by section 1513(a) of this Act, is amended by adding at the end
    the following:
    ``(D) Application to construction industry
    employers.--In the case of any employer the substantial
    annual gross receipts of which are attributable to the
    construction industry--
    ``(i) subparagraph (A) shall be applied by
    substituting `who employed an average of at least
    5 full-time employees on business days during the
    preceding calendar year and whose annual payroll
    expenses

    [[Page 911]]

    exceed $250,000 for such preceding calendar year'
    for `who employed an average of at least 50 full-
    time employees on business days during the
    preceding calendar year', and
    ``(ii) subparagraph (B) shall be applied by
    substituting `5' for `50'.''.

    (3) <>  The amendment made
    by paragraph (2) shall apply to months beginning after December 31,
    2013.

    (g) Section 6056(b) of the Internal Revenue Code of 1986, as added
    by section 1514(a) of the Act, <>  is amended by
    adding at the end the following new flush sentence:

    ``The Secretary shall have the authority to review the accuracy of the
    information provided under this subsection, including the applicable
    large employer's share under paragraph (2)(C)(iv).''.

    SEC. 10107. AMENDMENTS TO SUBTITLE G.

    (a) Section 1562 of this Act <>  is amended,
    in the amendment made by subsection (a)(2)(B)(iii), by striking
    ``subpart 1'' and inserting ``subparts I and II''; and

    (b) Subtitle G of title I of this Act is amended--
    (1) <>  by redesignating
    section 1562 (as amended) as section 1563; and
    (2) by inserting after section 1561 the following:

    ``SEC. 1562. GAO STUDY REGARDING THE RATE OF DENIAL OF COVERAGE AND
    ENROLLMENT BY HEALTH INSURANCE ISSUERS AND GROUP HEALTH
    PLANS.

    ``(a) In General.--The Comptroller General of the United States
    (referred to in this section as the `Comptroller General') shall conduct
    a study of the incidence of denials of coverage for medical services and
    denials of applications to enroll in health insurance plans, as
    described in subsection (b), by group health plans and health insurance
    issuers.
    ``(b) Data.--
    ``(1) In general.--In conducting the study described in
    subsection (a), the Comptroller General shall consider samples
    of data concerning the following:
    ``(A)(i) denials of coverage for medical services to
    a plan enrollees, by the types of services for which
    such coverage was denied; and
    ``(ii) the reasons such coverage was denied; and
    ``(B)(i) incidents in which group health plans and
    health insurance issuers deny the application of an
    individual to enroll in a health insurance plan offered
    by such group health plan or issuer; and
    ``(ii) the reasons such applications are denied.
    ``(2) Scope of data.--
    ``(A) Favorably resolved disputes.--The data that
    the Comptroller General considers under paragraph (1)
    shall include data concerning denials of coverage for
    medical services and denials of applications for
    enrollment in a plan by a group health plan or health
    insurance issuer, where such group health plan or health
    insurance issuer later approves such coverage or
    application.
    ``(B) All health plans.--The study under this
    section shall consider data from varied group health
    plans and health insurance plans offered by health
    insurance issuers,

    [[Page 912]]

    including qualified health plans and health plans that
    are not qualified health plans.

    ``(c) Report.--Not later than one year after the date of enactment
    of this Act, the Comptroller General shall submit to the Secretaries of
    Health and Human Services and Labor a report describing the results of
    the study conducted under this section.
    ``(d) <>  Publication of
    Report.--The Secretaries of Health and Human Services and Labor shall
    make the report described in subsection (c) available to the public on
    an Internet website.

    ``SEC. 1563. <>  SMALL BUSINESS PROCUREMENT.

    ``Part 19 of the Federal Acquisition Regulation, section 15 of the
    Small Business Act (15 U.S.C. 644), and any other applicable laws or
    regulations establishing procurement requirements relating to small
    business concerns (as defined in section 3 of the Small Business Act (15
    U.S.C. 632)) may not be waived with respect to any contract awarded
    under any program or other authority under this Act or an amendment made
    by this Act.''.

    SEC. 10108. <>  FREE CHOICE VOUCHERS.

    (a) In General.--An offering employer shall provide free choice
    vouchers to each qualified employee of such employer.
    (b) Offering Employer.--For purposes of this section, the term
    ``offering employer'' means any employer who--
    (1) offers minimum essential coverage to its employees
    consisting of coverage through an eligible employer-sponsored
    plan; and
    (2) pays any portion of the costs of such plan.

    (c) Qualified Employee.--For purposes of this section--
    (1) <>  In general.--The term ``qualified
    employee'' means, with respect to any plan year of an offering
    employer, any employee--
    (A) whose required contribution (as determined under
    section 5000A(e)(1)(B)) for minimum essential coverage
    through an eligible employer-sponsored plan--
    (i) exceeds 8 percent of such employee's
    household income for the taxable year described in
    section 1412(b)(1)(B) which ends with or within in
    the plan year; and
    (ii) does not exceed 9.8 percent of such
    employee's household income for such taxable year;
    (B) whose household income for such taxable year is
    not greater than 400 percent of the poverty line for a
    family of the size involved; and
    (C) who does not participate in a health plan
    offered by the offering employer.
    (2) Indexing.--In the case of any calendar year beginning
    after 2014, the Secretary shall adjust the 8 percent under
    paragraph (1)(A)(i) and 9.8 percent under paragraph (1)(A)(ii)
    for the calendar year to reflect the rate of premium growth
    between the preceding calendar year and 2013 over the rate of
    income growth for such period.

    (d) Free Choice Voucher.--
    (1) Amount.--
    (A) In general.--The amount of any free choice
    voucher provided under subsection (a) shall be equal to
    the monthly portion of the cost of the eligible
    employer-sponsored plan which would have been paid by
    the

    [[Page 913]]

    employer if the employee were covered under the plan
    with respect to which the employer pays the largest
    portion of the cost of the plan. Such amount shall be
    equal to the amount the employer would pay for an
    employee with self-only coverage unless such employee
    elects family coverage (in which case such amount shall
    be the amount the employer would pay for family
    coverage).
    (B) <>  Determination of cost.--
    The cost of any health plan shall be determined under
    the rules similar to the rules of section 2204 of the
    Public Health Service Act, except that such amount shall
    be adjusted for age and category of enrollment in
    accordance with regulations established by the
    Secretary.
    (2) Use of vouchers.--An Exchange shall credit the amount of
    any free choice voucher provided under subsection (a) to the
    monthly premium of any qualified health plan in the Exchange in
    which the qualified employee is enrolled and the offering
    employer shall pay any amounts so credited to the Exchange.
    (3) Payment of excess amounts.--If the amount of the free
    choice voucher exceeds the amount of the premium of the
    qualified health plan in which the qualified employee is
    enrolled for such month, such excess shall be paid to the
    employee.

    (e) Other Definitions.--Any term used in this section which is also
    used in section 5000A of the Internal Revenue Code of 1986 shall have
    the meaning given such term under such section 5000A.
    (f) Exclusion From Income for Employee.--
    (1) In general.--Part III of subchapter B of chapter 1 of
    the Internal Revenue Code of 1986 is amended by inserting after
    section 139C the following new section:

    ``SEC. 139D. <>  FREE CHOICE VOUCHERS.

    ``Gross income shall not include the amount of any free choice
    voucher provided by an employer under section 10108 of the Patient
    Protection and Affordable Care Act to the extent that the amount of such
    voucher does not exceed the amount paid for a qualified health plan (as
    defined in section 1301 of such Act) by the taxpayer.''.
    (2) Clerical amendment.--The table of sections for part III
    of subchapter B of chapter 1 of such Code is amended by
    inserting after the item relating to section 139C the following
    new item:

    ``Sec. 139D. Free choice vouchers.''.

    (3) <>  Effective date.--The
    amendments made by this subsection shall apply to vouchers
    provided after December 31, 2013.

    (g) Deduction Allowed to Employer.--
    (1) In general.--Section 162(a) of the Internal Revenue Code
    of 1986 <>  is amended by adding at the end
    the following new sentence: ``For purposes of paragraph (1), the
    amount of a free choice voucher provided under section 10108 of
    the Patient Protection and Affordable Care Act shall be treated
    as an amount for compensation for personal services actually
    rendered.''.

    [[Page 914]]

    (2) <>  Effective date.--The
    amendments made by this subsection shall apply to vouchers
    provided after December 31, 2013.

    (h) Voucher Taken Into Account in Determining Premium Credit.--
    (1) In general.--Subsection (c)(2) of section 36B of the
    Internal Revenue Code of 1986, <>  as added
    by section 1401, is amended by adding at the end the following
    new subparagraph:
    ``(D) Exception for individual receiving free choice
    vouchers.--The term `coverage month' shall not include
    any month in which such individual has a free choice
    voucher provided under section 10108 of the Patient
    Protection and Affordable Care Act.''.
    (2) <>  Effective date.--The
    amendment made by this subsection shall apply to taxable years
    beginning after December 31, 2013.

    (i) Coordination With Employer Responsibilities.--
    (1) Shared responsibility penalty.--
    (A) In general.--Subsection (c) of section 4980H of
    the Internal Revenue Code of 1986, as added by section
    1513, is amended <>  by adding at
    the end the following new paragraph:
    ``(3) Special rules for employers providing free choice
    vouchers.--No assessable payment shall be imposed under
    paragraph (1) for any month with respect to any employee to whom
    the employer provides a free choice voucher under section 10108
    of the Patient Protection and Affordable Care Act for such
    month.''.
    (B) <>  Effective date.--
    The amendment made by this paragraph shall apply to
    months beginning after December 31, 2013.
    (2) Notification requirement.--Section 18B(a)(3) of the Fair
    Labor Standards Act of 1938, <>  as added by
    section 1512, is amended--
    (A) by inserting ``and the employer does not offer a
    free choice voucher'' after ``Exchange''; and
    (B) by striking ``will lose'' and inserting ``may
    lose''.

    (j) Employer Reporting.--
    (1) In general.--Subsection (a) of section 6056 of the
    Internal Revenue Code of 1986, <>  as added
    by section 1514, is amended by inserting ``and every offering
    employer'' before ``shall''.
    (2) Offering employers.--Subsection (f) of section 6056 of
    such Code, as added by section 1514, is amended to read as
    follows:

    ``(f) Definitions.--For purposes of this section--
    ``(1) Offering employer.--
    ``(A) In general.--The term `offering employer'
    means any offering employer (as defined in section
    10108(b) of the Patient Protection and Affordable Care
    Act) if the required contribution (within the meaning of
    section 5000A(e)(1)(B)(i)) of any employee exceeds 8
    percent of the wages (as defined in section 3121(a))
    paid to such employee by such employer.
    ``(B) Indexing.--In the case of any calendar year
    beginning after 2014, the 8 percent under subparagraph
    (A)

    [[Page 915]]

    shall be adjusted for the calendar year to reflect the
    rate of premium growth between the preceding calendar
    year and 2013 over the rate of income growth for such
    period.
    ``(2) Other definitions.--Any term used in this section
    which is also used in section 4980H shall have the meaning given
    such term by section 4980H.''.
    (3) Conforming amendments.--
    (A) The heading of section 6056 of such Code, as
    added by section 1514, <>  is
    amended by striking ``large'' and inserting ``certain''.
    (B) Section 6056(b)(2)(C) of such Code is amended--
    (i) by inserting ``in the case of an
    applicable large employer,'' before ``the length''
    in clause (i);
    (ii) by striking ``and'' at the end of clause
    (iii);
    (iii) by striking ``applicable large
    employer'' in clause (iv) and inserting
    ``employer'';
    (iv) by inserting ``and'' at the end of clause
    (iv); and
    (v) by inserting at the end the following new
    clause:
    ``(v) in the case of an offering employer, the
    option for which the employer pays the largest
    portion of the cost of the plan and the portion of
    the cost paid by the employer in each of the
    enrollment categories under such option,''.
    (C) Section 6056(d)(2) of such Code is amended by
    inserting ``or offering employer'' after ``applicable
    large employer''.
    (D) Section 6056(e) of such Code is amended by
    inserting ``or offering employer'' after ``applicable
    large employer''.
    (E) Section 6724(d)(1)(B)(xxv) of such Code, as
    added by section 1514, is amended by striking ``large''
    and inserting ``certain''.
    (F) Section 6724(d)(2)(HH) of such Code, as added by
    section 1514, is amended by striking ``large'' and
    inserting ``certain''.
    (G) The table of sections for subpart D of part III
    of subchapter A of chapter 1 of such Code, as amended by
    section 1514, is amended by striking ``Large employers''
    in the item relating to section 6056 and inserting
    ``Certain employers''.
    (4) <>  Effective date.--The
    amendments made by this subsection shall apply to periods
    beginning after December 31, 2013.

    SEC. 10109. DEVELOPMENT OF STANDARDS FOR FINANCIAL AND ADMINISTRATIVE
    TRANSACTIONS.

    (a) Additional Transaction Standards and Operating Rules.--
    (1) Development of additional transaction standards and
    operating rules.--Section 1173(a) of the Social Security Act (42
    U.S.C. 1320d-2(a)), as amended by section 1104(b)(2), is
    amended--
    (A) in paragraph (1)(B), by inserting before the
    period the following: ``, and subject to the
    requirements under paragraph (5)''; and

    [[Page 916]]

    (B) by adding at the end the following new
    paragraph:
    ``(5) Consideration of standardization of activities and
    items.--
    ``(A) <>  In general.--For
    purposes of carrying out paragraph (1)(B), the Secretary
    shall solicit, not later than January 1, 2012, and not
    less than every 3 years thereafter, input from entities
    described in subparagraph (B) on--
    ``(i) whether there could be greater
    uniformity in financial and administrative
    activities and items, as determined appropriate by
    the Secretary; and
    ``(ii) whether such activities should be
    considered financial and administrative
    transactions (as described in paragraph (1)(B))
    for which the adoption of standards and operating
    rules would improve the operation of the health
    care system and reduce administrative costs.
    ``(B) Solicitation of input.--For purposes of
    subparagraph (A), the Secretary shall seek input from--
    ``(i) the National Committee on Vital and
    Health Statistics, the Health Information
    Technology Policy Committee, and the Health
    Information Technology Standards Committee; and
    ``(ii) standard setting organizations and
    stakeholders, as determined appropriate by the
    Secretary.''.

    (b) <>  Activities and Items for Initial
    Consideration.--For purposes of section 1173(a)(5) of the Social
    Security Act, as added by subsection (a), the Secretary of Health and
    Human Services (in this section referred to as the ``Secretary'') shall,
    not later than January 1, 2012, seek input on activities and items
    relating to the following areas:
    (1) Whether the application process, including the use of a
    uniform application form, for enrollment of health care
    providers by health plans could be made electronic and
    standardized.
    (2) Whether standards and operating rules described in
    section 1173 of the Social Security Act should apply to the
    health care transactions of automobile insurance, worker's
    compensation, and other programs or persons not described in
    section 1172(a) of such Act (42 U.S.C. 1320d-1(a)).
    (3) Whether standardized forms could apply to financial
    audits required by health plans, Federal and State agencies
    (including State auditors, the Office of the Inspector General
    of the Department of Health and Human Services, and the Centers
    for Medicare & Medicaid Services), and other relevant entities
    as determined appropriate by the Secretary.
    (4) Whether there could be greater transparency and
    consistency of methodologies and processes used to establish
    claim edits used by health plans (as described in section
    1171(5) of the Social Security Act (42 U.S.C. 1320d(5))).
    (5) Whether health plans should be required to publish their
    timeliness of payment rules.

    (c) ICD Coding Crosswalks.--
    (1) <>  ICD-9 to icd-10
    crosswalk.--The Secretary shall task the ICD-9-CM Coordination
    and Maintenance Committee to convene a meeting, not later than
    January 1, 2011, to receive input from appropriate stakeholders
    (including health plans, health care providers, and clinicians)
    regarding the crosswalk

    [[Page 917]]

    between the Ninth and Tenth Revisions of the International
    Classification of Diseases (ICD-9 and ICD-10, respectively) that
    is posted on the website of the Centers for Medicare & Medicaid
    Services, and make recommendations about appropriate revisions
    to such crosswalk.
    (2) Revision of crosswalk.--For purposes of the crosswalk
    described in paragraph (1), the Secretary shall make appropriate
    revisions and post any such revised crosswalk on the website of
    the Centers for Medicare & Medicaid Services.
    (3) Use of revised crosswalk.--For purposes of paragraph
    (2), any revised crosswalk shall be treated as a code set for
    which a standard has been adopted by the Secretary for purposes
    of section 1173(c)(1)(B) of the Social Security Act (42 U.S.C.
    1320d-2(c)(1)(B)).
    (4) <>  Subsequent crosswalks.--For
    subsequent revisions of the International Classification of
    Diseases that are adopted by the Secretary as a standard code
    set under section 1173(c) of the Social Security Act (42 U.S.C.
    1320d-2(c)), the Secretary shall, after consultation with the
    appropriate stakeholders, post on the website of the Centers for
    Medicare & Medicaid Services a crosswalk between the previous
    and subsequent version of the International Classification of
    Diseases not later than the date of implementation of such
    subsequent revision.

    Subtitle B--Provisions Relating to Title II

    PART I--MEDICAID AND CHIP

    SEC. 10201. AMENDMENTS TO THE SOCIAL SECURITY ACT AND TITLE II OF THIS
    ACT.

    (a)(1) Section 1902(a)(10)(A)(i)(IX) of the Social Security Act (42
    U.S.C. 1396a(a)(10)(A)(i)(IX)), as added by section 2004(a), is amended
    to read as follows:
    ``(IX) who--
    ``(aa) are under 26 years of
    age;
    ``(bb) are not described in
    or enrolled under any of
    subclauses (I) through (VII) of
    this clause or are described in
    any of such subclauses but have
    income that exceeds the level of
    income applicable under the
    State plan for eligibility to
    enroll for medical assistance
    under such subclause;
    ``(cc) were in foster care
    under the responsibility of the
    State on the date of attaining
    18 years of age or such higher
    age as the State has elected
    under section 475(8)(B)(iii);
    and
    ``(dd) were enrolled in the
    State plan under this title or
    under a waiver of the plan while
    in such foster care;''.

    (2) Section 1902(a)(10) of the Social Security Act (42 U.S.C.
    1396a(a)(10), as amended by section 2001(a)(5)(A), is amended in the
    matter following subparagraph (G), by striking ``and (XV)'' and
    inserting ``(XV)'', and by inserting ``and (XVI) if an individual is
    described in subclause (IX) of subparagraph (A)(i) and is also described
    in subclause (VIII) of that subparagraph, the medical

    [[Page 918]]

    assistance shall be made available to the individual through subclause
    (IX) instead of through subclause (VIII)'' before the semicolon.
    (3) <>  Section 2004(d) of this Act is
    amended by striking ``2019'' and inserting ``2014''.

    (b) Section 1902(k)(2) of the Social Security Act (42 U.S.C.
    1396a(k)(2)), as added by section 2001(a)(4)(A), is amended by striking
    ``January 1, 2011'' and inserting ``April 1, 2010''.
    (c) Section 1905 of the Social Security Act (42 U.S.C. 1396d), as
    amended by sections 2001(a)(3), 2001(a)(5)(C), 2006, and 4107(a)(2), is
    amended--
    (1) in subsection (a), in the matter preceding paragraph
    (1), by inserting in clause (xiv), ``or 1902(a)(10)(A)(i)(IX)''
    before the comma;
    (2) in subsection (b), in the first sentence, by inserting
    ``, (z),'' before ``and (aa)'';
    (3) in subsection (y)--
    (A) in paragraph (1)(B)(ii)(II), in the first
    sentence, by inserting ``includes inpatient hospital
    services,'' after ``100 percent of the poverty line,
    that''; and
    (B) in paragraph (2)(A), by striking ``on the date
    of enactment of the Patient Protection and Affordable
    Care Act'' and inserting ``as of December 1, 2009'';
    (4) by inserting after subsection (y) the following:

    ``(z) Equitable Support for Certain States.--
    ``(1)(A) <>  During the period that
    begins on January 1, 2014, and ends on September 30, 2019,
    notwithstanding subsection (b), the Federal medical assistance
    percentage otherwise determined under subsection (b) with
    respect to a fiscal year occurring during that period shall be
    increased by 2.2 percentage points for any State described in
    subparagraph (B) for amounts expended for medical assistance for
    individuals who are not newly eligible (as defined in subsection
    (y)(2)) individuals described in subclause (VIII) of section
    1902(a)(10)(A)(i).
    ``(B) For purposes of subparagraph (A), a State described in
    this subparagraph is a State that--
    ``(i) is an expansion State described in subsection
    (y)(1)(B)(ii)(II);
    ``(ii) the Secretary determines will not receive any
    payments under this title on the basis of an increased
    Federal medical assistance percentage under subsection
    (y) for expenditures for medical assistance for newly
    eligible individuals (as so defined); and
    ``(iii) has not been approved by the Secretary to
    divert a portion of the DSH allotment for a State to the
    costs of providing medical assistance or other health
    benefits coverage under a waiver that is in effect on
    July 2009.

    ``(2)(A) <>  During the period that begins on
    January 1, 2014, and ends on December 31, 2016, notwithstanding
    subsection (b), the Federal medical assistance percentage otherwise
    determined under subsection (b) with respect to all or any portion of a
    fiscal year occurring during that period shall be increased by .5
    percentage point for a State described in subparagraph (B) for amounts
    expended for medical assistance under the State plan under this title or
    under a waiver of that plan during that period.

    ``(B) For purposes of subparagraph (A), a State described in this
    subparagraph is a State that--

    [[Page 919]]

    ``(i) is described in clauses (i) and (ii) of paragraph
    (1)(B); and
    ``(ii) is the State with the highest percentage of its
    population insured during 2008, based on the Current Population
    Survey.

    ``(3) <> Notwithstanding subsection
    (b) and paragraphs (1) and (2) of this subsection, the Federal medical
    assistance percentage otherwise determined under subsection (b) with
    respect to all or any portion of a fiscal year that begins on or after
    January 1, 2017, for the State of Nebraska, with respect to amounts
    expended for newly eligible individuals described in subclause (VIII) of
    section 1902(a)(10)(A)(i), shall be determined as provided for under
    subsection (y)(1)(A) (notwithstanding the period provided for in such
    paragraph).

    ``(4) <> The increase in the Federal medical
    assistance percentage for a State under paragraphs (1), (2), or (3)
    shall apply only for purposes of this title and shall not apply with
    respect to--
    ``(A) disproportionate share hospital payments described in
    section 1923;
    ``(B) payments under title IV;
    ``(C) payments under title XXI; and
    ``(D) payments under this title that are based on the
    enhanced FMAP described in section 2105(b).'';
    (5) in subsection (aa), is amended by striking ``without
    regard to this subsection and subsection (y)'' and inserting
    ``without regard to this subsection, subsection (y), subsection
    (z), and section 10202 of the Patient Protection and Affordable
    Care Act'' each place it appears;
    (6) by adding after subsection (bb), the following:

    ``(cc) Requirement for Certain States.--Notwithstanding subsections
    (y), (z), and (aa), in the case of a State that requires political
    subdivisions within the State to contribute toward the non-Federal share
    of expenditures required under the State plan under section 1902(a)(2),
    the State shall not be eligible for an increase in its Federal medical
    assistance percentage under such subsections if it requires that
    political subdivisions pay a greater percentage of the non-Federal share
    of such expenditures, or a greater percentage of the non-Federal share
    of payments under section 1923, than the respective percentages that
    would have been required by the State under the State plan under this
    title, State law, or both, as in effect on December 31, 2009, and
    without regard to any such increase. Voluntary contributions by a
    political subdivision to the non-Federal share of expenditures under the
    State plan under this title or to the non-Federal share of payments
    under section 1923, shall not be considered to be required contributions
    for purposes of this subsection. The treatment of voluntary
    contributions, and the treatment of contributions required by a State
    under the State plan under this title, or State law, as provided by this
    subsection, shall also apply to the increases in the Federal medical
    assistance percentage under section 5001 of the American Recovery and
    Reinvestment Act of 2009.''.
    (d) Section 1108(g)(4)(B) of the Social Security Act (42 U.S.C.
    1308(g)(4)(B)), as added by section 2005(b), is amended by striking
    ``income eligibility level in effect for that population under title XIX
    or under a waiver'' and inserting ``the highest income eligibility level
    in effect for parents under the commonwealth's or territory's State plan
    under title XIX or under a waiver of the plan''.

    [[Page 920]]

    (e)(1) Section 1923(f) of the Social Security Act (42 U.S.C. 1396r-
    4(f)), as amended by section 2551, is amended--
    (A) in paragraph (6)--
    (i) by striking the paragraph heading and inserting
    the following: ``Allotment adjustments''; and
    (ii) in subparagraph (B), by adding at the end the
    following:
    ``(iii) <> Allotment for 2d,
    3rd, and 4th quarter of fiscal year 2012, fiscal
    year 2013, and succeeding fiscal years.--
    Notwithstanding the table set forth in paragraph
    (2) or paragraph (7):
    ``(I) 2d, 3rd, and 4th quarter of
    fiscal year 2012.--The DSH allotment for
    Hawaii for the 2d, 3rd, and 4th quarters
    of fiscal year 2012 shall be $7,500,000.
    ``(II) Treatment as a low-dsh state
    for fiscal year 2013 and succeeding
    fiscal years.--With respect to fiscal
    year 2013, and each fiscal year
    thereafter, the DSH allotment for Hawaii
    shall be increased in the same manner as
    allotments for low DSH States are
    increased for such fiscal year under
    clause (iii) of paragraph (5)(B).
    ``(III) Certain hospital payments.--
    The Secretary may not impose a
    limitation on the total amount of
    payments made to hospitals under the
    QUEST section 1115 Demonstration Project
    except to the extent that such
    limitation is necessary to ensure that a
    hospital does not receive payments in
    excess of the amounts described in
    subsection (g), or as necessary to
    ensure that such payments under the
    waiver and such payments pursuant to the
    allotment provided in this clause do
    not, in the aggregate in any year,
    exceed the amount that the Secretary
    determines is equal to the Federal
    medical assistance percentage component
    attributable to disproportionate share
    hospital payment adjustments for such
    year that is reflected in the budget
    neutrality provision of the QUEST
    Demonstration Project.''; and
    (B) in paragraph (7)--
    (i) in subparagraph (A), in the matter preceding
    clause (i), by striking ``subparagraph (E)'' and
    inserting ``subparagraphs (E) and (G)'';
    (ii) in subparagraph (B)--
    (I) in clause (i), by striking subclauses (I)
    and (II), and inserting the following:
    ``(I) if the State is a low DSH
    State described in paragraph (5)(B) and
    has spent not more than 99.90 percent of
    the DSH allotments for the State on
    average for the period of fiscal years
    2004 through 2008, as of September 30,
    2009, the applicable percentage is equal
    to 25 percent;
    ``(II) if the State is a low DSH
    State described in paragraph (5)(B) and
    has spent more than 99.90 percent of the
    DSH allotments for the State on average
    for the period of fiscal years 2004
    through

    [[Page 921]]

    2008, as of September 30, 2009, the
    applicable percentage is equal to 17.5
    percent;
    ``(III) if the State is not a low
    DSH State described in paragraph (5)(B)
    and has spent not more than 99.90
    percent of the DSH allotments for the
    State on average for the period of
    fiscal years 2004 through 2008, as of
    September 30, 2009, the applicable
    percentage is equal to 50 percent; and
    ``(IV) if the State is not a low DSH
    State described in paragraph (5)(B) and
    has spent more than 99.90 percent of the
    DSH allotments for the State on average
    for the period of fiscal years 2004
    through 2008, as of September 30, 2009,
    the applicable percentage is equal to 35
    percent.'';
    (II) in clause (ii), by striking subclauses
    (I) and (II), and inserting the following:
    ``(I) if the State is a low DSH
    State described in paragraph (5)(B) and
    has spent not more than 99.90 percent of
    the DSH allotments for the State on
    average for the period of fiscal years
    2004 through 2008, as of September 30,
    2009, the applicable percentage is equal
    to the product of the percentage
    reduction in uncovered individuals for
    the fiscal year from the preceding
    fiscal year and 27.5 percent;
    ``(II) if the State is a low DSH
    State described in paragraph (5)(B) and
    has spent more than 99.90 percent of the
    DSH allotments for the State on average
    for the period of fiscal years 2004
    through 2008, as of September 30, 2009,
    the applicable percentage is equal to
    the product of the percentage reduction
    in uncovered individuals for the fiscal
    year from the preceding fiscal year and
    20 percent;
    ``(III) if the State is not a low
    DSH State described in paragraph (5)(B)
    and has spent not more than 99.90
    percent of the DSH allotments for the
    State on average for the period of
    fiscal years 2004 through 2008, as of
    September 30, 2009, the applicable
    percentage is equal to the product of
    the percentage reduction in uncovered
    individuals for the fiscal year from the
    preceding fiscal year and 55 percent;
    and
    ``(IV) if the State is not a low DSH
    State described in paragraph (5)(B) and
    has spent more than 99.90 percent of the
    DSH allotments for the State on average
    for the period of fiscal years 2004
    through 2008, as of September 30, 2009,
    the applicable percentage is equal to
    the product of the percentage reduction
    in uncovered individuals for the fiscal
    year from the preceding fiscal year and
    40 percent.'';
    (III) in subparagraph (E), by striking ``35
    percent'' and inserting ``50 percent''; and
    (IV) by adding at the end the following:

    [[Page 922]]

    ``(G) Nonapplication.--The preceding provisions of
    this paragraph shall not apply to the DSH allotment
    determined for the State of Hawaii for a fiscal year
    under paragraph (6).''.

    (f) Section 2551 of this Act <> is
    amended by striking subsection (b).

    (g) Section 2105(d)(3)(B) of the Social Security Act (42 U.S.C.
    1397ee(d)(3)(B)), as added by section 2101(b)(1), is amended by adding
    at the end the following: ``For purposes of eligibility for premium
    assistance for the purchase of a qualified health plan under section 36B
    of the Internal Revenue Code of 1986 and reduced cost-sharing under
    section 1402 of the Patient Protection and Affordable Care Act, children
    described in the preceding sentence shall be deemed to be ineligible for
    coverage under the State child health plan.''.
    (h) Clause (i) of subparagraph (C) of section 513(b)(2) of the
    Social Security Act, <> as added by section 2953 of
    this Act, is amended to read as follows:
    ``(i) Healthy relationships, including
    marriage and family interactions.''.

    (i) Section 1115 of the Social Security Act (42 U.S.C. 1315) is
    amended by inserting after subsection (c) the following:
    ``(d)(1) An application or renewal of any experimental, pilot, or
    demonstration project undertaken under subsection (a) to promote the
    objectives of title XIX or XXI in a State that would result in an impact
    on eligibility, enrollment, benefits, cost-sharing, or financing with
    respect to a State program under title XIX or XXI (in this subsection
    referred to as a `demonstration project') shall be considered by the
    Secretary in accordance with the regulations required to be promulgated
    under paragraph (2).
    ``(2) <> Not later than 180 days after
    the date of enactment of this subsection, the Secretary shall promulgate
    regulations relating to applications for, and renewals of, a
    demonstration project that provide for--
    ``(A) a process for public notice and comment at the State
    level, including public hearings, sufficient to ensure a
    meaningful level of public input;
    ``(B) requirements relating to--
    ``(i) the goals of the program to be implemented or
    renewed under the demonstration project;
    ``(ii) the expected State and Federal costs and
    coverage projections of the demonstration project; and
    ``(iii) the specific plans of the State to ensure
    that the demonstration project will be in compliance
    with title XIX or XXI;
    ``(C) a process for providing public notice and comment
    after the application is received by the Secretary, that is
    sufficient to ensure a meaningful level of public input;
    ``(D) a process for the submission to the Secretary of
    periodic reports by the State concerning the implementation of
    the demonstration project; and
    ``(E) a process for the periodic evaluation by the Secretary
    of the demonstration project.

    ``(3) <> The Secretary shall annually
    report to Congress concerning actions taken by the Secretary with
    respect to applications for demonstration projects under this
    section.''.

    [[Page 923]]

    (j) Subtitle F of title III of this Act is amended by adding at the
    end the following:

    ``SEC. 3512. GAO STUDY AND REPORT ON CAUSES OF ACTION.

    ``(a) Study.--
    ``(1) In general.--The Comptroller General of the United
    States shall conduct a study of whether the development,
    recognition, or implementation of any guideline or other
    standards under a provision described in paragraph (2) would
    result in the establishment of a new cause of action or claim.
    ``(2) Provisions described.--The provisions described in
    this paragraph include the following:
    ``(A) Section 2701 (adult health quality measures).
    ``(B) Section 2702 (payment adjustments for health
    care acquired conditions).
    ``(C) Section 3001 (Hospital Value-Based Purchase
    Program).
    ``(D) Section 3002 (improvements to the Physician
    Quality Reporting Initiative).
    ``(E) Section 3003 (improvements to the Physician
    Feedback Program).
    ``(F) Section 3007 (value based payment modifier
    under physician fee schedule).
    ``(G) Section 3008 (payment adjustment for
    conditions acquired in hospitals).
    ``(H) Section 3013 (quality measure development).
    ``(I) Section 3014 (quality measurement).
    ``(J) Section 3021 (Establishment of Center for
    Medicare and Medicaid Innovation).
    ``(K) Section 3025 (hospital readmission reduction
    program).
    ``(L) Section 3501 (health care delivery system
    research, quality improvement).
    ``(M) Section 4003 (Task Force on Clinical and
    Preventive Services).
    ``(N) Section 4301 (research to optimize deliver of
    public health services).

    ``(b) Report.--Not later than 2 years after the date of enactment of
    this Act, the Comptroller General of the United States shall submit to
    the appropriate committees of Congress, a report containing the findings
    made by the Comptroller General under the study under subsection (a).''.

    SEC. 10202. <> INCENTIVES FOR STATES TO OFFER
    HOME AND COMMUNITY-BASED SERVICES AS A LONG-TERM CARE
    ALTERNATIVE TO NURSING HOMES.

    (a) State Balancing Incentive Payments Program.--Notwithstanding
    section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), in the
    case of a balancing incentive payment State, as defined in subsection
    (b), that meets the conditions described in subsection (c), during the
    balancing incentive period, the Federal medical assistance percentage
    determined for the State under section 1905(b) of such Act and, if
    applicable, increased under subsection (z) or (aa) shall be increased by
    the applicable percentage points determined under subsection (d) with
    respect to eligible medical assistance expenditures described in
    subsection (e).
    (b) Balancing Incentive Payment State.--A balancing incentive
    payment State is a State--

    [[Page 924]]

    (1) in which less than 50 percent of the total expenditures
    for medical assistance under the State Medicaid program for a
    fiscal year for long-term services and supports (as defined by
    the Secretary under subsection (f))(1)) are for non-
    institutionally-based long-term services and supports described
    in subsection (f)(1)(B);
    (2) that submits an application and meets the conditions
    described in subsection (c); and
    (3) that is selected by the Secretary to participate in the
    State balancing incentive payment program established under this
    section.

    (c) Conditions.--The conditions described in this subsection are the
    following:
    (1) Application.--The State submits an application to the
    Secretary that includes, in addition to such other information
    as the Secretary shall require--
    (A) a proposed budget that details the State's plan
    to expand and diversify medical assistance for non-
    institutionally-based long-term services and supports
    described in subsection (f)(1)(B) under the State
    Medicaid program during the balancing incentive period
    and achieve the target spending percentage applicable to
    the State under paragraph (2), including through
    structural changes to how the State furnishes such
    assistance, such as through the establishment of a ``no
    wrong door--single entry point system'', optional
    presumptive eligibility, case management services, and
    the use of core standardized assessment instruments, and
    that includes a description of the new or expanded
    offerings of such services that the State will provide
    and the projected costs of such services; and
    (B) in the case of a State that proposes to expand
    the provision of home and community-based services under
    its State Medicaid program through a State plan
    amendment under section 1915(i) of the Social Security
    Act, at the option of the State, an election to increase
    the income eligibility for such services from 150
    percent of the poverty line to such higher percentage as
    the State may establish for such purpose, not to exceed
    300 percent of the supplemental security income benefit
    rate established by section 1611(b)(1) of the Social
    Security Act (42 U.S.C. 1382(b)(1)).
    (2) <> Target spending percentages.--
    (A) In the case of a balancing incentive payment
    State in which less than 25 percent of the total
    expenditures for long-term services and supports under
    the State Medicaid program for fiscal year 2009 are for
    home and community-based services, the target spending
    percentage for the State to achieve by not later than
    October 1, 2015, is that 25 percent of the total
    expenditures for long-term services and supports under
    the State Medicaid program are for home and community-
    based services.
    (B) In the case of any other balancing incentive
    payment State, the target spending percentage for the
    State to achieve by not later than October 1, 2015, is
    that 50 percent of the total expenditures for long-term
    services and supports under the State Medicaid program
    are for home and community-based services.

    [[Page 925]]

    (3) Maintenance of eligibility requirements.--The State does
    not apply eligibility standards, methodologies, or procedures
    for determining eligibility for medical assistance for non-
    institutionally-based long-term services and supports described
    in subsection (f)(1)(B) under the State Medicaid program that
    are more restrictive than the eligibility standards,
    methodologies, or procedures in effect for such purposes on
    December 31, 2010.
    (4) Use of additional funds.--The State agrees to use the
    additional Federal funds paid to the State as a result of this
    section only for purposes of providing new or expanded offerings
    of non-institutionally-based long-term services and supports
    described in subsection (f)(1)(B) under the State Medicaid
    program.
    (5) Structural changes. <> --The State
    agrees to make, not later than the end of the 6-month period
    that begins on the date the State submits an application under
    this section, the following changes:
    (A) <> ``No wrong door--single
    entry point system''.--Development of a statewide system
    to enable consumers to access all long-term services and
    supports through an agency, organization, coordinated
    network, or portal, in accordance with such standards as
    the State shall establish and that shall provide
    information regarding the availability of such services,
    how to apply for such services, referral services for
    services and supports otherwise available in the
    community, and determinations of financial and
    functional eligibility for such services and supports,
    or assistance with assessment processes for financial
    and functional eligibility.
    (B) Conflict-free case management services.--
    Conflict-free case management services to develop a
    service plan, arrange for services and supports, support
    the beneficiary (and, if appropriate, the beneficiary's
    caregivers) in directing the provision of services and
    supports for the beneficiary, and conduct ongoing
    monitoring to assure that services and supports are
    delivered to meet the beneficiary's needs and achieve
    intended outcomes.
    (C) Core standardized assessment instruments.--
    Development of core standardized assessment instruments
    for determining eligibility for non-institutionally-
    based long-term services and supports described in
    subsection (f)(1)(B), which shall be used in a uniform
    manner throughout the State, to determine a
    beneficiary's needs for training, support services,
    medical care, transportation, and other services, and
    develop an individual service plan to address such
    needs.
    (6) Data collection.--The State agrees to collect from
    providers of services and through such other means as the State
    determines appropriate the following data:
    (A) <> Services data.--Services
    data from providers of non-institutionally-based long-
    term services and supports described in subsection
    (f)(1)(B) on a per-beneficiary basis and in accordance
    with such standardized coding procedures as the State
    shall establish in consultation with the Secretary.

    [[Page 926]]

    (B) Quality data.--Quality data on a selected set of
    core quality measures agreed upon by the Secretary and
    the State that are linked to population-specific
    outcomes measures and accessible to providers.
    (C) Outcomes measures.--Outcomes measures data on a
    selected set of core population-specific outcomes
    measures agreed upon by the Secretary and the State that
    are accessible to providers and include--
    (i) measures of beneficiary and family
    caregiver experience with providers;
    (ii) measures of beneficiary and family
    caregiver satisfaction with services; and
    (iii) measures for achieving desired outcomes
    appropriate to a specific beneficiary, including
    employment, participation in community life,
    health stability, and prevention of loss in
    function.

    (d) Applicable Percentage Points Increase in FMAP.--The applicable
    percentage points increase is--
    (1) in the case of a balancing incentive payment State
    subject to the target spending percentage described in
    subsection (c)(2)(A), 5 percentage points; and
    (2) in the case of any other balancing incentive payment
    State, 2 percentage points.

    (e) Eligible Medical Assistance Expenditures.--
    (1) In general.--Subject to paragraph (2), medical
    assistance described in this subsection is medical assistance
    for non-institutionally-based long-term services and supports
    described in subsection (f)(1)(B) that is provided by a
    balancing incentive payment State under its State Medicaid
    program during the balancing incentive payment period.
    (2) Limitation on payments.--In no case may the aggregate
    amount of payments made by the Secretary to balancing incentive
    payment States under this section during the balancing incentive
    period exceed $3,000,000,000.

    (f) Definitions.--In this section:
    (1) Long-term services and supports defined.--The term
    ``long-term services and supports'' has the meaning given that
    term by Secretary and may include any of the following (as
    defined for purposes of State Medicaid programs):
    (A) Institutionally-based long-term services and
    supports.--Services provided in an institution,
    including the following:
    (i) Nursing facility services.
    (ii) Services in an intermediate care facility
    for the mentally retarded described in subsection
    (a)(15) of section 1905 of such Act.
    (B) Non-institutionally-based long-term services and
    supports.--Services not provided in an institution,
    including the following:
    (i) Home and community-based services provided
    under subsection (c), (d), or (i) of section 1915
    of such Act or under a waiver under section 1115
    of such Act.
    (ii) Home health care services.
    (iii) Personal care services.

    [[Page 927]]

    (iv) Services described in subsection (a)(26)
    of section 1905 of such Act (relating to PACE
    program services).
    (v) Self-directed personal assistance services
    described in section 1915(j) of such Act.
    (2) Balancing incentive period.--The term ``balancing
    incentive period'' means the period that begins on October 1,
    2011, and ends on September 30, 2015.
    (3) Poverty line.--The term ``poverty line'' has the meaning
    given that term in section 2110(c)(5) of the Social Security Act
    (42 U.S.C. 1397jj(c)(5)).
    (4) State medicaid program.--The term ``State Medicaid
    program'' means the State program for medical assistance
    provided under a State plan under title XIX of the Social
    Security Act and under any waiver approved with respect to such
    State plan.

    SEC. 10203. EXTENSION OF FUNDING FOR CHIP THROUGH FISCAL YEAR 2015 AND
    OTHER CHIP-RELATED PROVISIONS.

    (a) Section 1311(c)(1) of this Act <> is
    amended by striking ``and'' at the end of subparagraph (G), by striking
    the period at the end of subparagraph (H) and inserting ``; and'', and
    by adding at the end the following:
    ``(I) <> report to the
    Secretary at least annually and in such manner as the
    Secretary shall require, pediatric quality reporting
    measures consistent with the pediatric quality reporting
    measures established under section 1139A of the Social
    Security Act.''.

    (b) <> Effective as if
    included in the enactment of the Children's Health Insurance Program
    Reauthorization Act of 2009 (Public Law 111-3):
    (1) Section 1906(e)(2) of the Social Security Act (42 U.S.C.
    1396e(e)(2)) is amended by striking ``means'' and all that
    follows through the period and inserting ``has the meaning given
    that term in section 2105(c)(3)(A).''.
    (2)(A) Section 1906A(a) of the Social Security Act (42
    U.S.C. 1396e-1(a)), is amended by inserting before the period
    the following: ``and the offering of such a subsidy is cost-
    effective, as defined for purposes of section 2105(c)(3)(A)''.
    (B) <> This
    Act shall be applied without regard to subparagraph (A) of
    section 2003(a)(1) of this Act and that subparagraph and the
    amendment made by that subparagraph are hereby deemed null,
    void, and of no effect.
    (3) Section 2105(c)(10) of the Social Security Act (42
    U.S.C. 1397ee(c)(10)) is amended--
    (A) in subparagraph (A), in the first sentence, by
    inserting before the period the following: ``if the
    offering of such a subsidy is cost-effective, as defined
    for purposes of paragraph (3)(A)'';
    (B) by striking subparagraph (M); and
    (C) by redesignating subparagraph (N) as
    subparagraph (M).
    (4) Section 2105(c)(3)(A) of the Social Security Act (42
    U.S.C. 1397ee(c)(3)(A)) is amended--
    (A) in the matter preceding clause (i), by striking
    ``to'' and inserting ``to--''; and

    [[Page 928]]

    (B) in clause (ii), by striking the period and
    inserting a semicolon.

    (c) Section 2105 of the Social Security Act (42 U.S.C. 1397ee), as
    amended by section 2101, is amended--
    (1) in subsection (b), in the second sentence, by striking
    ``2013'' and inserting ``2015''; and
    (2) in subsection (d)(3)--
    (A) in subparagraph (A)--
    (i) in the first sentence, by inserting ``as a
    condition of receiving payments under section
    1903(a),'' after ``2019,'';
    (ii) in clause (i), by striking ``or'' at the
    end;
    (iii) by redesignating clause (ii) as clause
    (iii); and
    (iv) by inserting after clause (i), the
    following:
    ``(ii) after September 30, 2015, enrolling
    children eligible to be targeted low-income
    children under the State child health plan in a
    qualified health plan that has been certified by
    the Secretary under subparagraph (C); or'';
    (B) <> in subparagraph (B), by
    striking ``provided coverage'' and inserting ``screened
    for eligibility for medical assistance under the State
    plan under title XIX or a waiver of that plan and, if
    found eligible, enrolled in such plan or a waiver. In
    the case of such children who, as a result of such
    screening, are determined to not be eligible for medical
    assistance under the State plan or a waiver under title
    XIX, the State shall establish procedures to ensure that
    the children are enrolled in a qualified health plan
    that has been certified by the Secretary under
    subparagraph (C) and is offered''; and
    (C) by adding at the end the following:
    ``(C) Certification of comparability of pediatric
    coverage offered by qualified health plans.--
    <> With respect
    to each State, the Secretary, not later than April 1,
    2015, shall review the benefits offered for children and
    the cost-sharing imposed with respect to such benefits
    by qualified health plans offered through an Exchange
    established by the State under section 1311 of the
    Patient Protection and Affordable Care Act and shall
    certify those plans that offer benefits for children and
    impose cost-sharing with respect to such benefits that
    the Secretary determines are at least comparable to the
    benefits offered and cost-sharing protections provided
    under the State child health plan.''.

    (d)(1) Section 2104(a) of such Act (42 U.S.C. 1397dd(a)) is
    amended--
    (A) in paragraph (15), by striking ``and'' at the end; and
    (B) by striking paragraph (16) and inserting the following:
    ``(16) for fiscal year 2013, $17,406,000,000;
    ``(17) for fiscal year 2014, $19,147,000,000; and
    ``(18) for fiscal year 2015, for purposes of making 2 semi-
    annual allotments--
    ``(A) $2,850,000,000 for the period beginning on
    October 1, 2014, and ending on March 31, 2015, and
    ``(B) $2,850,000,000 for the period beginning on
    April 1, 2015, and ending on September 30, 2015.''.

    [[Page 929]]

    (2)(A) Section 2104(m) of such Act (42 U.S.C. 1397dd(m)), as amended
    by section 2102(a)(1), is amended--
    (i) in the subsection heading, by striking ``2013'' and
    inserting ``2015'';
    (ii) in paragraph (2)--
    (I) in the paragraph heading, by striking ``2012''
    and inserting ``2014''; and
    (II) by adding at the end the following:
    ``(B) <> Fiscal years 2013 and
    2014.--Subject to paragraphs (4) and (6), from the
    amount made available under paragraphs (16) and (17) of
    subsection (a) for fiscal years 2013 and 2014,
    respectively, the Secretary shall compute a State
    allotment for each State (including the District of
    Columbia and each commonwealth and territory) for each
    such fiscal year as follows:
    ``(i) Rebasing in fiscal year 2013.--For
    fiscal year 2013, the allotment of the State is
    equal to the Federal payments to the State that
    are attributable to (and countable towards) the
    total amount of allotments available under this
    section to the State in fiscal year 2012
    (including payments made to the State under
    subsection (n) for fiscal year 2012 as well as
    amounts redistributed to the State in fiscal year
    2012), multiplied by the allotment increase factor
    under paragraph (5) for fiscal year 2013.
    ``(ii) Growth factor update for fiscal year
    2014.--For fiscal year 2014, the allotment of the
    State is equal to the sum of--
    ``(I) the amount of the State
    allotment under clause (i) for fiscal
    year 2013; and
    ``(II) the amount of any payments
    made to the State under subsection (n)
    for fiscal year 2013,
    multiplied by the allotment increase factor under
    paragraph (5) for fiscal year 2014.'';
    (iii) in paragraph (3)--
    (I) in the paragraph heading, by striking
    ``2013'' and inserting ``2015'';
    (II) in subparagraphs (A) and (B), by striking
    ``paragraph (16)'' each place it appears and
    inserting ``paragraph (18)'';
    (III) in subparagraph (C)--
    (aa) by striking ``2012'' each place
    it appears and inserting ``2014''; and
    (bb) by striking ``2013'' and
    inserting ``2015''; and
    (IV) in subparagraph (D)--
    (aa) in clause (i)(I), by striking
    ``subsection (a)(16)(A)'' and inserting
    ``subsection (a)(18)(A)''; and
    (bb) in clause (ii)(II), by striking
    ``subsection (a)(16)(B)'' and inserting
    ``subsection (a)(18)(B)'';
    (iv) in paragraph (4), by striking ``2013'' and
    inserting ``2015'';
    (v) in paragraph (6)--
    (I) in subparagraph (A), by striking ``2013''
    and inserting ``2015''; and

    [[Page 930]]

    (II) in the flush language after and below
    subparagraph (B)(ii), by striking ``or fiscal year
    2012'' and inserting ``, fiscal year 2012, or
    fiscal year 2014''; and
    (vi) in paragraph (8)--
    (I) in the paragraph heading, by striking
    ``2013'' and inserting ``2015''; and
    (II) by striking ``2013'' and inserting
    ``2015''.

    (B) Section 2104(n) of such Act (42 U.S.C. 1397dd(n)) is amended--
    (i) in paragraph (2)--
    (I) in subparagraph (A)(ii)--
    (aa) by striking ``2012'' and inserting
    ``2014''; and
    (bb) by striking ``2013'' and inserting
    ``2015'';
    (II) in subparagraph (B)--
    (aa) by striking ``2012'' and inserting
    ``2014''; and
    (bb) by striking ``2013'' and inserting
    ``2015''; and
    (ii) in paragraph (3)(A), by striking ``or a semi-annual
    allotment period for fiscal year 2013'' and inserting ``fiscal
    year 2013, fiscal year 2014, or a semi-annual allotment period
    for fiscal year 2015''.

    (C) Section 2105(g)(4) of such Act (42 U.S.C. 1397ee(g)(4)) is
    amended--
    (i) in the paragraph heading, by striking ``2013'' and
    inserting ``2015''; and
    (ii) in subparagraph (A), by striking ``2013'' and inserting
    ``2015''.

    (D) Section 2110(b) of such Act (42 U.S.C. 1397jj(b)) is amended--
    (i) in paragraph (2)(B), by inserting ``except as provided
    in paragraph (6),'' before ``a child''; and
    (ii) by adding at the end the following new paragraph:
    ``(6) Exceptions to exclusion of children of employees of a
    public agency in the state.--
    ``(A) In general.--A child shall not be considered
    to be described in paragraph (2)(B) if--
    ``(i) the public agency that employs a member
    of the child's family to which such paragraph
    applies satisfies subparagraph (B); or
    ``(ii) <> subparagraph
    (C) applies to such child.
    ``(B) Maintenance of effort with respect to per
    person agency contribution for family coverage.--For
    purposes of subparagraph (A)(i), a public agency
    satisfies this subparagraph if the amount of annual
    agency expenditures made on behalf of each employee
    enrolled in health coverage paid for by the agency that
    includes dependent coverage for the most recent State
    fiscal year is not less than the amount of such
    expenditures made by the agency for the 1997 State
    fiscal year, increased by the percentage increase in the
    medical care expenditure category of the Consumer Price
    Index for All-Urban Consumers (all items: U.S. City
    Average) for such preceding fiscal year.
    ``(C) <> Hardship exception.--
    For purposes of subparagraph (A)(ii), this subparagraph
    applies to a child if the State determines, on a case-
    by-case basis, that the annual aggregate amount of
    premiums and cost-sharing imposed

    [[Page 931]]

    for coverage of the family of the child would exceed 5
    percent of such family's income for the year
    involved.''.

    (E) Section 2113 of such Act (42 U.S.C. 1397mm) is amended--
    (i) in subsection (a)(1), by striking ``2013'' and inserting
    ``2015''; and
    (ii) in subsection (g), by striking ``$100,000,000 for the
    period of fiscal years 2009 through 2013'' and inserting
    ``$140,000,000 for the period of fiscal years 2009 through
    2015''.

    (F) Section 108 of Public Law 111-3 <> is amended by striking ``$11,706,000,000'' and all that follows
    through the second sentence and inserting ``$15,361,000,000 to accompany
    the allotment made for the period beginning on October 1, 2014, and
    ending on March 31, 2015, under section 2104(a)(18)(A) of the Social
    Security Act (42 U.S.C. 1397dd(a)(18)(A)), to remain available until
    expended. Such <> amount shall be used to provide
    allotments to States under paragraph (3) of section 2104(m) of the
    Social Security Act (42 U.S.C. 1397dd(m)) for the first 6 months of
    fiscal year 2015 in the same manner as allotments are provided under
    subsection (a)(18)(A) of such section 2104 and subject to the same terms
    and conditions as apply to the allotments provided from such subsection
    (a)(18)(A).''.

    PART II--SUPPORT FOR PREGNANT AND PARENTING TEENS AND WOMEN

    SEC. <> 10211. DEFINITIONS.

    In this part:
    (1) Accompaniment.--The term ``accompaniment'' means
    assisting, representing, and accompanying a woman in seeking
    judicial relief for child support, child custody, restraining
    orders, and restitution for harm to persons and property, and in
    filing criminal charges, and may include the payment of court
    costs and reasonable attorney and witness fees associated
    therewith.
    (2) Eligible institution of higher education.--The term
    ``eligible institution of higher education'' means an
    institution of higher education (as such term is defined in
    section 101 of the Higher Education Act of 1965 (20 U.S.C.
    1001)) that has established and operates, or agrees to establish
    and operate upon the receipt of a grant under this part, a
    pregnant and parenting student services office.
    (3) Community service center.--The term ``community service
    center'' means a non-profit organization that provides social
    services to residents of a specific geographical area via direct
    service or by contract with a local governmental agency.
    (4) High school.--The term ``high school'' means any public
    or private school that operates grades 10 through 12, inclusive,
    grades 9 through 12, inclusive or grades 7 through 12,
    inclusive.
    (5) Intervention services.--The term ``intervention
    services'' means, with respect to domestic violence, sexual
    violence, sexual assault, or stalking, 24-hour telephone hotline
    services for police protection and referral to shelters.
    (6) Secretary.--The term ``Secretary'' means the Secretary
    of Health and Human Services.

    [[Page 932]]

    (7) State.--The term ``State'' includes the District of
    Columbia, any commonwealth, possession, or other territory of
    the United States, and any Indian tribe or reservation.
    (8) Supportive social services.--The term ``supportive
    social services'' means transitional and permanent housing,
    vocational counseling, and individual and group counseling aimed
    at preventing domestic violence, sexual violence, sexual
    assault, or stalking.
    (9) Violence.--The term ``violence'' means actual violence
    and the risk or threat of violence.

    SEC. 10212. <> ESTABLISHMENT OF PREGNANCY
    ASSISTANCE FUND.

    (a) In General.--The Secretary, in collaboration and coordination
    with the Secretary of Education (as appropriate), shall establish a
    Pregnancy Assistance Fund to be administered by the Secretary, for the
    purpose of awarding competitive grants to States to assist pregnant and
    parenting teens and women.
    (b) Use of Fund.--A State may apply for a grant under subsection (a)
    to carry out any activities provided for in section 10213.
    (c) Applications.--To be eligible to receive a grant under
    subsection (a), a State shall submit to the Secretary an application at
    such time, in such manner, and containing such information as the
    Secretary may require, including a description of the purposes for which
    the grant is being requested and the designation of a State agency for
    receipt and administration of funding received under this part.

    SEC. 10213. <> PERMISSIBLE USES OF FUND.

    (a) In General.--A State shall use amounts received under a grant
    under section 10212 for the purposes described in this section to assist
    pregnant and parenting teens and women.
    (b) Institutions of Higher Education.--
    (1) In general.--A State may use amounts received under a
    grant under section 10212 to make funding available to eligible
    institutions of higher education to enable the eligible
    institutions to establish, maintain, or operate pregnant and
    parenting student services. Such funding shall be used to
    supplement, not supplant, existing funding for such services.
    (2) Application.--An eligible institution of higher
    education that desires to receive funding under this subsection
    shall submit an application to the designated State agency at
    such time, in such manner, and containing such information as
    the State agency may require.
    (3) Matching requirement.--An eligible institution of higher
    education that receives funding under this subsection shall
    contribute to the conduct of the pregnant and parenting student
    services office supported by the funding an amount from non-
    Federal funds equal to 25 percent of the amount of the funding
    provided. The non-Federal share may be in cash or in-kind,
    fairly evaluated, including services, facilities, supplies, or
    equipment.
    (4) Use of funds for assisting pregnant and parenting
    college students.--An eligible institution of higher education
    that receives funding under this subsection shall use such funds
    to establish, maintain or operate pregnant and parenting student
    services and may use such funding for the following programs and
    activities:

    [[Page 933]]

    (A) Conduct a needs assessment on campus and within
    the local community--
    (i) to assess pregnancy and parenting
    resources, located on the campus or within the
    local community, that are available to meet the
    needs described in subparagraph (B); and
    (ii) to set goals for--
    (I) improving such resources for
    pregnant, parenting, and prospective
    parenting students; and
    (II) improving access to such
    resources.
    (B) Annually assess the performance of the eligible
    institution in meeting the following needs of students
    enrolled in the eligible institution who are pregnant or
    are parents:
    (i) The inclusion of maternity coverage and
    the availability of riders for additional family
    members in student health care.
    (ii) Family housing.
    (iii) Child care.
    (iv) Flexible or alternative academic
    scheduling, such as telecommuting programs, to
    enable pregnant or parenting students to continue
    their education or stay in school.
    (v) Education to improve parenting skills for
    mothers and fathers and to strengthen marriages.
    (vi) Maternity and baby clothing, baby food
    (including formula), baby furniture, and similar
    items to assist parents and prospective parents in
    meeting the material needs of their children.
    (vii) Post-partum counseling.
    (C) Identify public and private service providers,
    located on the campus of the eligible institution or
    within the local community, that are qualified to meet
    the needs described in subparagraph (B), and establishes
    programs with qualified providers to meet such needs.
    (D) Assist pregnant and parenting students, fathers
    or spouses in locating and obtaining services that meet
    the needs described in subparagraph (B).
    (E) If appropriate, provide referrals for prenatal
    care and delivery, infant or foster care, or adoption,
    to a student who requests such information. An office
    shall make such referrals only to service providers that
    serve the following types of individuals:
    (i) Parents.
    (ii) Prospective parents awaiting adoption.
    (iii) Women who are pregnant and plan on
    parenting or placing the child for adoption.
    (iv) Parenting or prospective parenting
    couples.
    (5) Reporting.--
    (A) Annual report by institutions.--
    (i) In general.--For each fiscal year that an
    eligible institution of higher education receives
    funds under this subsection, the eligible
    institution shall prepare and submit to the State,
    by the date determined by the State, a report
    that--

    [[Page 934]]

    (I) itemizes the pregnant and
    parenting student services office's
    expenditures for the fiscal year;
    (II) contains a review and
    evaluation of the performance of the
    office in fulfilling the requirements of
    this section, using the specific
    performance criteria or standards
    established under subparagraph (B)(i);
    and
    (III) describes the achievement of
    the office in meeting the needs listed
    in paragraph (4)(B) of the students
    served by the eligible institution, and
    the frequency of use of the office by
    such students.
    (ii) Performance criteria.--
    <> Not later than 180 days before
    the date the annual report described in clause (i)
    is submitted, the State--
    (I) shall identify the specific
    performance criteria or standards that
    shall be used to prepare the report; and
    (II) may establish the form or
    format of the report.
    (B) Report by state.--The State shall annually
    prepare and submit a report on the findings under this
    subsection, including the number of eligible
    institutions of higher education that were awarded funds
    and the number of students served by each pregnant and
    parenting student services office receiving funds under
    this section, to the Secretary.

    (c) Support for Pregnant and Parenting Teens.--A State may use
    amounts received under a grant under section 10212 to make funding
    available to eligible high schools and community service centers to
    establish, maintain or operate pregnant and parenting services in the
    same general manner and in accordance with all conditions and
    requirements described in subsection (b), except that paragraph (3) of
    such subsection shall not apply for purposes of this subsection.
    (d) Improving Services for Pregnant Women Who Are Victims of
    Domestic Violence, Sexual Violence, Sexual Assault, and Stalking.--
    (1) In general.--A State may use amounts received under a
    grant under section 10212 to make funding available tp its State
    Attorney General to assist Statewide offices in providing--
    (A) intervention services, accompaniment, and
    supportive social services for eligible pregnant women
    who are victims of domestic violence, sexual violence,
    sexual assault, or stalking.
    (B) technical assistance and training (as described
    in subsection (c)) relating to violence against eligible
    pregnant women to be made available to the following:
    (i) Federal, State, tribal, territorial, and
    local governments, law enforcement agencies, and
    courts.
    (ii) Professionals working in legal, social
    service, and health care settings.
    (iii) Nonprofit organizations.
    (iv) Faith-based organizations.

    [[Page 935]]

    (2) Eligibility.--To be eligible for a grant under paragraph
    (1), a State Attorney General shall submit an application to the
    designated State agency at such time, in such manner, and
    containing such information, as specified by the State.
    (3) Technical assistance and training described.--For
    purposes of paragraph (1)(B), technical assistance and training
    is--
    (A) the identification of eligible pregnant women
    experiencing domestic violence, sexual violence, sexual
    assault, or stalking;
    (B) the assessment of the immediate and short-term
    safety of such a pregnant woman, the evaluation of the
    impact of the violence or stalking on the pregnant
    woman's health, and the assistance of the pregnant woman
    in developing a plan aimed at preventing further
    domestic violence, sexual violence, sexual assault, or
    stalking, as appropriate;
    (C) the maintenance of complete medical or forensic
    records that include the documentation of any
    examination, treatment given, and referrals made,
    recording the location and nature of the pregnant
    woman's injuries, and the establishment of mechanisms to
    ensure the privacy and confidentiality of those medical
    records; and
    (D) the identification and referral of the pregnant
    woman to appropriate public and private nonprofit
    entities that provide intervention services,
    accompaniment, and supportive social services.
    (4) <> Eligible pregnant woman.--In this
    subsection, the term ``eligible pregnant woman'' means any woman
    who is pregnant on the date on which such woman becomes a victim
    of domestic violence, sexual violence, sexual assault, or
    stalking or who was pregnant during the one-year period before
    such date.

    (e) Public Awareness and Education.--A State may use amounts
    received under a grant under section 10212 to make funding available to
    increase public awareness and education concerning any services
    available to pregnant and parenting teens and women under this part, or
    any other resources available to pregnant and parenting women in keeping
    with the intent and purposes of this part. <> The
    State shall be responsible for setting guidelines or limits as to how
    much of funding may be utilized for public awareness and education in
    any funding award.

    SEC. 10214. <> APPROPRIATIONS.

    There is authorized to be appropriated, and there are appropriated,
    $25,000,000 for each of fiscal years 2010 through 2019, to carry out
    this part.

    PART III--INDIAN HEALTH CARE IMPROVEMENT

    SEC. 10221. INDIAN HEALTH CARE IMPROVEMENT.

    (a) In General. <> --Except as provided in subsection (b), S. 1790 entitled ``A bill
    to amend the Indian Health Care Improvement Act to revise and extend
    that Act, and for other purposes.'', as reported by the Committee on
    Indian Affairs of the Senate in December 2009, is enacted into law.

    (b) Amendments.--

    [[Page 936]]

    (1) Section 119 of the Indian Health Care Improvement Act
    (as amended by section 111 of the bill referred to in subsection
    (a)) <>  is amended--
    (A) in subsection (d)--
    (i) in paragraph (2), by striking ``In
    establishing'' and inserting ``Subject to
    paragraphs (3) and (4), in establishing''; and
    (ii) by adding at the end the following:
    ``(3) Election of indian tribe or tribal organization.--
    ``(A) In general.--Subparagraph (B) of paragraph (2)
    shall not apply in the case of an election made by an
    Indian tribe or tribal organization located in a State
    (other than Alaska) in which the use of dental health
    aide therapist services or midlevel dental health
    provider services is authorized under State law to
    supply such services in accordance with State law.
    ``(B) Action by secretary.--On an election by an
    Indian tribe or tribal organization under subparagraph
    (A), the Secretary, acting through the Service, shall
    facilitate implementation of the services elected.
    ``(4) Vacancies.--The Secretary shall not fill any vacancy
    for a certified dentist in a program operated by the Service
    with a dental health aide therapist.''; and
    (B) by adding at the end the following:

    ``(e) Effect of Section.--Nothing in this section shall restrict the
    ability of the Service, an Indian tribe, or a tribal organization to
    participate in any program or to provide any service authorized by any
    other Federal law.''.
    (2) The Indian Health Care Improvement Act (as amended by
    section 134(b) of the bill referred to in subsection <>  (a)) is amended by striking section 125 (relating
    to treatment of scholarships for certain purposes).
    (3) Section 806 of the Indian Health Care Improvement Act
    (25 U.S.C. 1676) is amended--
    (A) by striking ``Any limitation'' and inserting the
    following:

    ``(a) HHS Appropriations.--Any limitation''; and
    (B) by adding at the end the following:

    ``(b) Limitations Pursuant to Other Federal Law.--
    <> Any limitation pursuant to other
    Federal laws on the use of Federal funds appropriated to the Service
    shall apply with respect to the performance or coverage of abortions.''.
    (4) The bill referred to in subsection (a) <> is amended by striking section 201.

    Subtitle C--Provisions Relating to Title III

    SEC. 10301. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR AMBULATORY
    SURGICAL CENTERS.

    (a) In General.--Section 3006 is amended by adding at the end the
    following new subsection:
    ``(f) Ambulatory Surgical Centers.--
    ``(1) In general.--The Secretary shall develop a plan to
    implement a value-based purchasing program for payments under
    the Medicare program under title XVIII of the Social

    [[Page 937]]

    Security Act for ambulatory surgical centers (as described in
    section 1833(i) of the Social Security Act (42 U.S.C.
    1395l(i))).
    ``(2) Details.--In developing the plan under paragraph (1),
    the Secretary shall consider the following issues:
    ``(A) The ongoing development, selection, and
    modification process for measures (including under
    section 1890 of the Social Security Act (42 U.S.C.
    1395aaa) and section 1890A of such Act, as added by
    section 3014), to the extent feasible and practicable,
    of all dimensions of quality and efficiency in
    ambulatory surgical centers.
    ``(B) The reporting, collection, and validation of
    quality data.
    ``(C) The structure of value-based payment
    adjustments, including the determination of thresholds
    or improvements in quality that would substantiate a
    payment adjustment, the size of such payments, and the
    sources of funding for the value-based bonus payments.
    ``(D) Methods for the public disclosure of
    information on the performance of ambulatory surgical
    centers.
    ``(E) Any other issues determined appropriate by the
    Secretary.
    ``(3) Consultation.--In developing the plan under paragraph
    (1), the Secretary shall--
    ``(A) consult with relevant affected parties; and
    ``(B) consider experience with such demonstrations
    that the Secretary determines are relevant to the value-
    based purchasing program described in paragraph (1).
    ``(4) Report to congress.--Not later than January 1, 2011,
    the Secretary shall submit to Congress a report containing the
    plan developed under paragraph (1).''.

    (b) Technical.--Section 3006(a)(2)(A) is amended by striking clauses
    (i) and (ii).

    SEC. 10302. REVISION TO NATIONAL STRATEGY FOR QUALITY IMPROVEMENT IN
    HEALTH CARE.

    Section 399HH(a)(2)(B)(iii) of the Public Health Service Act, as
    added by section 3011, <>  is amended by inserting
    ``(taking into consideration the limitations set forth in subsections
    (c) and (d) of section 1182 of the Social Security Act)'' after
    ``information''.

    SEC. 10303. DEVELOPMENT OF OUTCOME MEASURES.

    (a) Development.--Section 931 of the Public Health Service Act, as
    added by section 3013(a), <> is amended by adding
    at the end the following new subsection:

    ``(f) Development of Outcome Measures.--
    ``(1) In general. <> --The Secretary shall
    develop, and periodically update (not less than every 3 years),
    provider-level outcome measures for hospitals and physicians, as
    well as other providers as determined appropriate by the
    Secretary.
    ``(2) Categories of measures.--The measures developed under
    this subsection shall include, to the extent determined
    appropriate by the Secretary--
    ``(A) outcome measurement for acute and chronic
    diseases, including, to the extent feasible, the 5 most
    prevalent and resource-intensive acute and chronic
    medical conditions; and
    ``(B) outcome measurement for primary and
    preventative care, including, to the extent feasible,
    measurements

    [[Page 938]]

    that cover provision of such care for distinct patient
    populations (such as healthy children, chronically ill
    adults, or infirm elderly individuals).
    ``(3) Goals.--In developing such measures, the Secretary
    shall seek to--
    ``(A) address issues regarding risk adjustment,
    accountability, and sample size;
    ``(B) include the full scope of services that
    comprise a cycle of care; and
    ``(C) include multiple dimensions.
    ``(4) Timeframe.--
    ``(A) Acute and chronic diseases.--Not later than 24
    months after the date of enactment of this Act, the
    Secretary shall develop not less than 10 measures
    described in paragraph (2)(A).
    ``(B) Primary and preventive care.--Not later than
    36 months after the date of enactment of this Act, the
    Secretary shall develop not less than 10 measures
    described in paragraph (2)(B).''.

    (b) Hospital-acquired Conditions.--Section 1890A of the Social
    Security Act, as amended by section 3013(b), <> is amended by adding at the end the following new subsection:

    ``(f) Hospital Acquired Conditions. <> --
    The Secretary shall, to the extent practicable, publicly report on
    measures for hospital-acquired conditions that are currently utilized by
    the Centers for Medicare & Medicaid Services for the adjustment of the
    amount of payment to hospitals based on rates of hospital-acquired
    infections.''.

    (c) Clinical Practice Guidelines.--Section 304(b) of the Medicare
    Improvements for Patients and Providers Act of 2008 (Public Law 110-
    275) <> is amended by adding at the end the
    following new paragraph:
    ``(4) Identification.--
    ``(A) In general. <> --
    Following receipt of the report submitted under
    paragraph (2), and not less than every 3 years
    thereafter, the Secretary shall contract with the
    Institute to employ the results of the study performed
    under paragraph (1) and the best methods identified by
    the Institute for the purpose of identifying existing
    and new clinical practice guidelines that were developed
    using such best methods, including guidelines listed in
    the National Guideline Clearinghouse.
    ``(B) Consultation.--In carrying out the
    identification process under subparagraph (A), the
    Secretary shall allow for consultation with professional
    societies, voluntary health care organizations, and
    expert panels.''.

    SEC. 10304. SELECTION OF EFFICIENCY MEASURES.

    Sections 1890(b)(7) and 1890A of the Social Security Act, as added
    by section 3014, <> are amended by
    striking ``quality'' each place it appears and inserting ``quality and
    efficiency''.

    SEC. 10305. DATA COLLECTION; PUBLIC REPORTING.

    Section 399II(a) of the Public Health Service Act, as added by
    section 3015 <> , is amended to read as follows:

    ``(a) In General.--

    [[Page 939]]

    ``(1) Establishment of strategic framework.--The Secretary
    shall establish and implement an overall strategic framework to
    carry out the public reporting of performance information, as
    described in section 399JJ. Such strategic framework may include
    methods and related timelines for implementing nationally
    consistent data collection, data aggregation, and analysis
    methods.
    ``(2) Collection and aggregation of data.--The Secretary
    shall collect and aggregate consistent data on quality and
    resource use measures from information systems used to support
    health care delivery, and may award grants or contracts for this
    purpose. The Secretary shall align such collection and
    aggregation efforts with the requirements and assistance
    regarding the expansion of health information technology
    systems, the interoperability of such technology systems, and
    related standards that are in effect on the date of enactment of
    the Patient Protection and Affordable Care Act.
    ``(3) Scope.--The Secretary shall ensure that the data
    collection, data aggregation, and analysis systems described in
    paragraph (1) involve an increasingly broad range of patient
    populations, providers, and geographic areas over time.''.

    SEC. 10306. IMPROVEMENTS UNDER THE CENTER FOR MEDICARE AND MEDICAID
    INNOVATION.

    Section 1115A of the Social Security Act, as added by section
    3021, <> is amended--
    (1) in subsection (a), by inserting at the end the following
    new paragraph:
    ``(5) Testing within certain geographic areas.--For purposes
    of testing payment and service delivery models under this
    section, the Secretary may elect to limit testing of a model to
    certain geographic areas.'';
    (2) in subsection (b)(2)--
    (A) in subparagraph (A)--
    (i) in the second sentence, by striking ``the
    preceding sentence may include'' and inserting
    ``this subparagraph may include, but are not
    limited to,''; and
    (ii) by inserting after the first sentence the
    following new sentence: ``The Secretary shall
    focus on models expected to reduce program costs
    under the applicable title while preserving or
    enhancing the quality of care received by
    individuals receiving benefits under such
    title.'';
    (B) in subparagraph (B), by adding at the end the
    following new clauses:
    ``(xix) Utilizing, in particular in entities
    located in medically underserved areas and
    facilities of the Indian Health Service (whether
    operated by such Service or by an Indian tribe or
    tribal organization (as those terms are defined in
    section 4 of the Indian Health Care Improvement
    Act)), telehealth services--
    ``(I) in treating behavioral health
    issues (such as post-traumatic stress
    disorder) and stroke; and
    ``(II) to improve the capacity of
    non-medical providers and non-
    specialized medical providers to

    [[Page 940]]

    provide health services for patients
    with chronic complex conditions.
    ``(xx) Utilizing a diverse network of
    providers of services and suppliers to improve
    care coordination for applicable individuals
    described in subsection (a)(4)(A)(i) with 2 or
    more chronic conditions and a history of prior-
    year hospitalization through interventions
    developed under the Medicare Coordinated Care
    Demonstration Project under section 4016 of the
    Balanced Budget Act of 1997 (42 U.S.C. 1395b-1
    note).''; and
    (C) in subparagraph (C), by adding at the end the
    following new clause:
    ``(viii) Whether the model demonstrates
    effective linkage with other public sector or
    private sector payers.'';
    (3) in subsection (b)(4), by adding at the end the following
    new subparagraph:
    ``(C) Measure selection.--To the extent feasible,
    the Secretary shall select measures under this paragraph
    that reflect national priorities for quality improvement
    and patient-centered care consistent with the measures
    described in 1890(b)(7)(B).''; and
    (4) in subsection (c)--
    (A) in paragraph (1)(B), by striking ``care and
    reduce spending; and'' and inserting ``patient care
    without increasing spending;'';
    (B) in paragraph (2), by striking ``reduce program
    spending under applicable titles.'' and inserting
    ``reduce (or would not result in any increase in) net
    program spending under applicable titles; and''; and
    (C) by adding at the end the following:
    ``(3) <> the Secretary determines that
    such expansion would not deny or limit the coverage or provision
    of benefits under the applicable title for applicable
    individuals.

    In determining which models or demonstration projects to expand under
    the preceding sentence, the Secretary shall focus on models and
    demonstration projects that improve the quality of patient care and
    reduce spending.''.

    SEC. 10307. IMPROVEMENTS TO THE MEDICARE SHARED SAVINGS PROGRAM.

    Section 1899 of the Social Security Act, as added by section
    3022, <> is amended by adding at the end the
    following new subsections:

    ``(i) Option To Use Other Payment Models.--
    ``(1) In general.-- <> If the
    Secretary determines appropriate, the Secretary may use any of
    the payment models described in paragraph (2) or (3) for making
    payments under the program rather than the payment model
    described in subsection (d).
    ``(2) Partial capitation model.--
    ``(A) In general.--Subject to subparagraph (B), a
    model described in this paragraph is a partial
    capitation model in which an ACO is at financial risk
    for some, but not all, of the items and services covered
    under parts A and B, such as at risk for some or all
    physicians' services or all items and services under
    part B. The Secretary

    [[Page 941]]

    may limit a partial capitation model to ACOs that are
    highly integrated systems of care and to ACOs capable of
    bearing risk, as determined to be appropriate by the
    Secretary.
    ``(B) <> No additional program
    expenditures.--Payments to an ACO for items and services
    under this title for beneficiaries for a year under the
    partial capitation model shall be established in a
    manner that does not result in spending more for such
    ACO for such beneficiaries than would otherwise be
    expended for such ACO for such beneficiaries for such
    year if the model were not implemented, as estimated by
    the Secretary.
    ``(3) Other payment models.--
    ``(A) <> In general.--Subject
    to subparagraph (B), a model described in this paragraph
    is any payment model that the Secretary determines will
    improve the quality and efficiency of items and services
    furnished under this title.
    ``(B) <> No additional program
    expenditures.--Subparagraph (B) of paragraph (2) shall
    apply to a payment model under subparagraph (A) in a
    similar manner as such subparagraph (B) applies to the
    payment model under paragraph (2).

    ``(j) Involvement in Private Payer and Other Third Party
    Arrangements.--The Secretary may give preference to ACOs who are
    participating in similar arrangements with other payers.
    ``(k) Treatment of Physician Group Practice Demonstration.--
    <> During the period beginning on the
    date of the enactment of this section and ending on the date the program
    is established, the Secretary may enter into an agreement with an ACO
    under the demonstration under section 1866A, subject to rebasing and
    other modifications deemed appropriate by the Secretary.''.

    SEC. 10308. REVISIONS TO NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

    (a) In General.--Section 1866D of the Social Security Act, as added
    by section 3023, <> is amended--
    (1) in paragraph (a)(2)(B), in the matter preceding clause
    (i), by striking ``8 conditions'' and inserting ``10
    conditions'';
    (2) by striking subsection (c)(1)(B) and inserting the
    following:
    ``(B) Expansion.-- <> The
    Secretary may, at any point after January 1, 2016,
    expand the duration and scope of the pilot program, to
    the extent determined appropriate by the Secretary, if--
    ``(i) the Secretary determines that such
    expansion is expected to--
    ``(I) reduce spending under title
    XVIII of the Social Security Act without
    reducing the quality of care; or
    ``(II) improve the quality of care
    and reduce spending;
    ``(ii) <> the Chief
    Actuary of the Centers for Medicare & Medicaid
    Services certifies that such expansion would
    reduce program spending under such title XVIII;
    and

    [[Page 942]]

    ``(iii) the Secretary determines that such
    expansion would not deny or limit the coverage or
    provision of benefits under this title for
    individuals.''; and
    (3) by striking subsection (g) and inserting the following
    new subsection:

    ``(g) Application of Pilot Program to Continuing Care Hospitals.--
    ``(1) In general.--In conducting the pilot program, the
    Secretary shall apply the provisions of the program so as to
    separately pilot test the continuing care hospital model.
    ``(2) Special rules.--In pilot testing the continuing care
    hospital model under paragraph (1), the following rules shall
    apply:
    ``(A) Such model shall be tested without the
    limitation to the conditions selected under subsection
    (a)(2)(B).
    ``(B) <> Notwithstanding
    subsection (a)(2)(D), an episode of care shall be
    defined as the full period that a patient stays in the
    continuing care hospital plus the first 30 days
    following discharge from such hospital.
    ``(3) Continuing care hospital defined.--In this subsection,
    the term `continuing care hospital' means an entity that has
    demonstrated the ability to meet patient care and patient safety
    standards and that provides under common management the medical
    and rehabilitation services provided in inpatient rehabilitation
    hospitals and units (as defined in section 1886(d)(1)(B)(ii)),
    long term care hospitals (as defined in section
    1886(d)(1)(B)(iv)(I)), and skilled nursing facilities (as
    defined in section 1819(a)) that are located in a hospital
    described in section 1886(d).''.

    (b) Technical Amendments.--
    (1) Section 3023 <> is amended by
    striking ``1886C'' and inserting ``1866C''.
    (2) Title XVIII of the Social Security Act is amended by
    redesignating section 1866D, as added by section
    3024, <>  as section 1866E.

    SEC. 10309. REVISIONS TO HOSPITAL READMISSIONS REDUCTION PROGRAM.

    Section 1886(q)(1) of the Social Security Act, as added by section
    3025, <> in the matter preceding subparagraph (A),
    is amended by striking ``the Secretary shall reduce the payments'' and
    all that follows through ``the product of'' and inserting ``the
    Secretary shall make payments (in addition to the payments described in
    paragraph (2)(A)(ii)) for such a discharge to such hospital under
    subsection (d) (or section 1814(b)(3), as the case may be) in an amount
    equal to the product of''.

    SEC. 10310. REPEAL OF PHYSICIAN PAYMENT UPDATE.

    The provisions of, and the amendment made by, <> section 3101 are repealed.

    SEC. 10311. REVISIONS TO EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social Security
    Act (42 U.S.C. 1395m(l)(13)(A)), as amended by section 3105(a), is
    further amended--
    (1) in the matter preceding clause (i)--
    (A) by striking ``2007, for'' and inserting ``2007,
    and for''; and

    [[Page 943]]

    (B) by striking ``2010, and for such services
    furnished on or after April 1, 2010, and before January
    1, 2011'' and inserting ``2011''; and
    (2) in each of clauses (i) and (ii)--
    (A) by striking ``, and on or after April 1, 2010,
    and before January 1, 2011'' each place it appears; and
    (B) by striking ``January 1, 2010'' and inserting
    ``January 1, 2011'' each place it appears.

    (b) Air Ambulance.--Section 146(b)(1) of the Medicare Improvements
    for Patients and Providers Act of 2008 (Public Law 110-275), as amended
    by section 3105(b), <> is further amended by
    striking ``December 31, 2009, and during the period beginning on April
    1, 2010, and ending on January 1, 2011'' and inserting ``December 31,
    2010''.

    (c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social
    Security Act (42 U.S.C. 1395m(l)(12)(A)), as amended by section 3105(c),
    is further amended by striking ``2010, and on or after April 1, 2010,
    and before January 1, 2011'' and inserting ``2011''.

    SEC. 10312. CERTAIN PAYMENT RULES FOR LONG-TERM CARE HOSPITAL SERVICES
    AND MORATORIUM ON THE ESTABLISHMENT OF CERTAIN HOSPITALS AND
    FACILITIES.

    (a) Certain Payment Rules.--Section 114(c) of the Medicare,
    Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as
    amended by section 4302(a) of the American Recovery and Reinvestment Act
    (Public Law 111-5) and section 3106(a) of this Act, is further amended
    by striking ``4-year period'' each place it appears and inserting ``5-
    year period''.
    (b) Moratorium.--Section 114(d) of such Act (42 U.S.C. 1395ww note),
    as amended by section 3106(b) of this Act, in the matter preceding
    subparagraph (A), is amended by striking ``4-year period'' and inserting
    ``5-year period''.

    SEC. 10313. REVISIONS TO THE EXTENSION FOR THE RURAL COMMUNITY HOSPITAL
    DEMONSTRATION PROGRAM.

    (a) In General.--Subsection (g) of section 410A of the Medicare
    Prescription Drug, Improvement, and Modernization Act of 2003 (Public
    Law 108-173; 117 Stat. 2272), as added by section 3123(a) of this
    Act, <> is amended to read as follows:

    ``(g) Five-Year Extension of Demonstration Program.--
    ``(1) In general.--Subject to the succeeding provisions of
    this subsection, the Secretary shall conduct the demonstration
    program under this section for an additional 5-year period (in
    this section referred to as the `5-year extension period') that
    begins on the date immediately following the last day of the
    initial 5-year period under subsection (a)(5).
    ``(2) <> Expansion of demonstration
    states.--Notwithstanding subsection (a)(2), during the 5-year
    extension period, the Secretary shall expand the number of
    States with low population densities determined by the Secretary
    under such subsection to 20. <> In determining
    which States to include in such expansion, the Secretary shall
    use the same criteria and data that the Secretary used to
    determine the States under such subsection for purposes of the
    initial 5-year period.
    ``(3) Increase in maximum number of hospitals participating
    in the demonstration program.--Notwithstanding subsection
    (a)(4), during the 5-year extension period, not more

    [[Page 944]]

    than 30 rural community hospitals may participate in the
    demonstration program under this section.
    ``(4) Hospitals in demonstration program on date of
    enactment.--In the case of a rural community hospital that is
    participating in the demonstration program under this section as
    of the last day of the initial 5-year period, the Secretary--
    ``(A) shall provide for the continued participation
    of such rural community hospital in the demonstration
    program during the 5-year extension period unless the
    rural community hospital makes an election, in such form
    and manner as the Secretary may specify, to discontinue
    such participation; and
    ``(B) in calculating the amount of payment under
    subsection (b) to the rural community hospital for
    covered inpatient hospital services furnished by the
    hospital during such 5-year extension period, shall
    substitute, under paragraph (1)(A) of such subsection--
    ``(i) the reasonable costs of providing such
    services for discharges occurring in the first
    cost reporting period beginning on or after the
    first day of the 5-year extension period, for
    ``(ii) the reasonable costs of providing such
    services for discharges occurring in the first
    cost reporting period beginning on or after the
    implementation of the demonstration program.''.

    (b) Conforming Amendments.--Subsection (a)(5) of section 410A of the
    Medicare Prescription Drug, Improvement, and Modernization Act of 2003
    (Public Law 108-173; 117 Stat. 2272), as amended by section 3123(b) of
    this Act, is amended by striking ``1-year extension'' and inserting ``5-
    year extension''.

    SEC. 10314. ADJUSTMENT TO LOW-VOLUME HOSPITAL PROVISION.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C.
    1395ww(d)(12), as amended by section 3125, is amended--
    (1) in subparagraph (C)(i), by striking ``1,500 discharges''
    and inserting ``1,600 discharges''; and
    (2) in subparagraph (D), by striking ``1,500 discharges''
    and inserting ``1,600 discharges''.

    SEC. 10315. REVISIONS TO HOME HEALTH CARE PROVISIONS.

    (a) Rebasing.--Section 1895(b)(3)(A)(iii) of the Social Security
    Act, as added by section 3131, <> is amended--
    (1) in the clause heading, by striking ``2013'' and
    inserting ``2014'';
    (2) in subclause (I), by striking ``2013'' and inserting
    ``2014''; and
    (3) in subclause (II), by striking ``2016'' and inserting
    ``2017''.

    (b) <> Revision of Home Health Study and
    Report.--Section 3131(d) is amended to read as follows:

    ``(d) Study and Report on the Development of Home Health Payment
    Revisions in Order to Ensure Access to Care and Payment for Severity of
    Illness.--
    ``(1) In general.--The Secretary of Health and Human
    Services (in this section referred to as the `Secretary') shall
    conduct a study on home health agency costs involved with

    [[Page 945]]

    providing ongoing access to care to low-income Medicare
    beneficiaries or beneficiaries in medically underserved areas,
    and in treating beneficiaries with varying levels of severity of
    illness. In conducting the study, the Secretary may analyze
    items such as the following:
    ``(A) Methods to potentially revise the home health
    prospective payment system under section 1895 of the
    Social Security Act (42 U.S.C. 1395fff) to account for
    costs related to patient severity of illness or to
    improving beneficiary access to care, such as--
    ``(i) payment adjustments for services that
    may involve additional or fewer resources;
    ``(ii) changes to reflect resources involved
    with providing home health services to low-income
    Medicare beneficiaries or Medicare beneficiaries
    residing in medically underserved areas;
    ``(iii) ways outlier payments might be revised
    to reflect costs of treating Medicare
    beneficiaries with high levels of severity of
    illness; and
    ``(iv) other issues determined appropriate by
    the Secretary.
    ``(B) Operational issues involved with potential
    implementation of potential revisions to the home health
    payment system, including impacts for both home health
    agencies and administrative and systems issues for the
    Centers for Medicare & Medicaid Services, and any
    possible payment vulnerabilities associated with
    implementing potential revisions.
    ``(C) Whether additional research might be needed.
    ``(D) Other items determined appropriate by the
    Secretary.
    ``(2) Considerations.--In conducting the study under
    paragraph (1), the Secretary may consider whether patient
    severity of illness and access to care could be measured by
    factors, such as--
    ``(A) population density and relative patient access
    to care;
    ``(B) variations in service costs for providing care
    to individuals who are dually eligible under the
    Medicare and Medicaid programs;
    ``(C) the presence of severe or chronic diseases,
    which might be measured by multiple, discontinuous home
    health episodes;
    ``(D) poverty status, such as evidenced by the
    receipt of Supplemental Security Income under title XVI
    of the Social Security Act; and
    ``(E) other factors determined appropriate by the
    Secretary.
    ``(3) Report.--Not later than March 1, 2014, the Secretary
    shall submit to Congress a report on the study conducted under
    paragraph (1), together with recommendations for such
    legislation and administrative action as the Secretary
    determines appropriate.
    ``(4) Consultations.--In conducting the study under
    paragraph (1), the Secretary shall consult with appropriate
    stakeholders, such as groups representing home health agencies
    and groups representing Medicare beneficiaries.

    [[Page 946]]

    ``(5) Medicare demonstration project based on the results of
    the study.--
    ``(A) In general.--Subject to subparagraph (D),
    taking into account the results of the study conducted
    under paragraph (1), the Secretary may, as determined
    appropriate, provide for a demonstration project to test
    whether making payment adjustments for home health
    services under the Medicare program would substantially
    improve access to care for patients with high severity
    levels of illness or for low-income or underserved
    Medicare beneficiaries.
    ``(B) Waiving budget neutrality.--The Secretary
    shall not reduce the standard prospective payment amount
    (or amounts) under section 1895 of the Social Security
    Act (42 U.S.C. 1395fff) applicable to home health
    services furnished during a period to offset any
    increase in payments during such period resulting from
    the application of the payment adjustments under
    subparagraph (A).
    ``(C) No effect on subsequent periods.--A payment
    adjustment resulting from the application of
    subparagraph (A) for a period--
    ``(i) shall not apply to payments for home
    health services under title XVIII after such
    period; and
    ``(ii) shall not be taken into account in
    calculating the payment amounts applicable for
    such services after such period.
    ``(D) <> Duration.--If the
    Secretary determines it appropriate to conduct the
    demonstration project under this subsection, the
    Secretary shall conduct the project for a four year
    period beginning not later than January 1, 2015.
    ``(E) Funding.--The Secretary shall provide for the
    transfer from the Federal Hospital Insurance Trust Fund
    under section 1817 of the Social Security Act (42 U.S.C.
    1395i) and the Federal Supplementary Medical Insurance
    Trust Fund established under section 1841 of such Act
    (42 U.S.C. 1395t), in such proportion as the Secretary
    determines appropriate, of $500,000,000 for the period
    of fiscal years 2015 through 2018. Such funds shall be
    made available for the study described in paragraph (1)
    and the design, implementation and evaluation of the
    demonstration described in this paragraph. Amounts
    available under this subparagraph shall be available
    until expended.
    ``(F) Evaluation and report.--If the Secretary
    determines it appropriate to conduct the demonstration
    project under this subsection, the Secretary shall--
    ``(i) provide for an evaluation of the
    project; and
    ``(ii) submit to Congress, by a date specified
    by the Secretary, a report on the project.
    ``(G) Administration.--Chapter 35 of title 44,
    United States Code, shall not apply with respect to this
    subsection.''.

    SEC. 10316. MEDICARE DSH.

    Section 1886(r)(2)(B) of the Social Security Act, as added by
    section 3133, <> is amended--
    (1) in clause (i)--
    (A) in the matter preceding subclause (I), by
    striking ``(divided by 100)'';

    [[Page 947]]

    (B) in subclause (I), by striking ``2012'' and
    inserting ``2013'';
    (C) in subclause (II), by striking the period at the
    end and inserting a comma; and
    (D) by adding at the end the following flush matter:
    ``minus 1.5 percentage points.''.
    (2) in clause (ii)--
    (A) in the matter preceding subclause (I), by
    striking ``(divided by 100)'';
    (B) in subclause (I), by striking ``2012'' and
    inserting ``2013'';
    (C) in subclause (II), by striking the period at the
    end and inserting a comma; and
    (D) by adding at the end the following flush matter:
    ``and, for each of 2018 and 2019, minus 1.5
    percentage points.''.

    SEC. 10317. <> REVISIONS TO EXTENSION OF
    SECTION 508 HOSPITAL PROVISIONS.

    Section 3137(a) is amended to read as follows:
    ``(a) Extension.--
    ``(1) In general.--Subsection (a) of section 106 of division
    B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395
    note), as amended by section 117 of the Medicare, Medicaid, and
    SCHIP Extension Act of 2007 (Public Law 110-173) and section 124
    of the Medicare Improvements for Patients and Providers Act of
    2008 (Public Law 110-275), is amended by striking `September 30,
    2009' and inserting `September 30, 2010'.
    ``(2) Special rule for fiscal year 2010.--
    ``(A) In general.--Subject to subparagraph (B), for
    purposes of implementation of the amendment made by
    paragraph (1), including (notwithstanding paragraph (3)
    of section 117(a) of the Medicare, Medicaid and SCHIP
    Extension Act of 2007 (Public Law 110-173), as amended
    by section 124(b) of the Medicare Improvements for
    Patients and Providers Act of 2008 (Public Law 110-275))
    for purposes of the implementation of paragraph (2) of
    such section 117(a), during fiscal year 2010, the
    Secretary of Health and Human Services (in this
    subsection referred to as the `Secretary') shall use the
    hospital wage index that was promulgated by the
    Secretary in the Federal Register on August 27, 2009 (74
    Fed. Reg. 43754), and any subsequent corrections.
    ``(B) <> Exception.--
    Beginning on April 1, 2010, in determining the wage
    index applicable to hospitals that qualify for wage
    index reclassification, the Secretary shall include the
    average hourly wage data of hospitals whose
    reclassification was extended pursuant to the amendment
    made by paragraph (1) only if including such data
    results in a higher applicable reclassified wage index.
    ``(3) Adjustment for certain hospitals in fiscal year
    2010.--
    ``(A) In general.--In the case of a subsection (d)
    hospital (as defined in subsection (d)(1)(B) of section
    1886 of the Social Security Act (42 U.S.C. 1395ww)) with
    respect to which--

    [[Page 948]]

    ``(i) a reclassification of its wage index for
    purposes of such section was extended pursuant to
    the amendment made by paragraph (1); and
    ``(ii) <> the wage index
    applicable for such hospital for the period
    beginning on October 1, 2009, and ending on March
    31, 2010, was lower than for the period beginning
    on April 1, 2010, and ending on September 30,
    2010, by reason of the application of paragraph
    (2)(B);
    the Secretary shall pay such hospital an additional
    payment that reflects the difference between the wage
    index for such periods.
    ``(B) Timeframe for payments.--The Secretary shall
    make payments required under subparagraph by not later
    than December 31, 2010.''.

    SEC. 10318. REVISIONS TO TRANSITIONAL EXTRA BENEFITS UNDER MEDICARE
    ADVANTAGE.

    Section 1853(p)(3)(A) of the Social Security Act, as added by
    section 3201(h), <> is amended by inserting ``in
    2009'' before the period at the end.

    SEC. 10319. REVISIONS TO MARKET BASKET ADJUSTMENTS.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B)(xii) of the
    Social Security Act, as added by section 3401(a), <> is amended--
    (1) in subclause (I), by striking ``and'' at the end;
    (2) by redesignating subclause (II) as subclause (III);
    (3) by inserting after subclause (II) the following new
    subclause:
    ``(II) for each of fiscal years 2012 and 2013, by 0.1
    percentage point; and''; and
    (4) in subclause (III), as redesignated by paragraph (2), by
    striking ``2012'' and inserting ``2014''.

    (b) Long-term Care Hospitals.--Section 1886(m)(4) of the Social
    Security Act, as added by section 3401(c), is amended--
    (1) in subparagraph (A)--
    (A) in clause (i)--
    (i) by striking ``each of rate years 2010 and
    2011'' and inserting ``rate year 2010''; and
    (ii) by striking ``and'' at the end;
    (B) by redesignating clause (ii) as clause (iv);
    (C) by inserting after clause (i) the following new
    clauses:
    ``(ii) for rate year 2011, 0.50 percentage
    point;
    ``(iii) for each of the rate years beginning
    in 2012 and 2013, 0.1 percentage point; and''; and
    (D) in clause (iv), as redesignated by subparagraph
    (B), by striking ``2012'' and inserting ``2014''; and
    (2) in subparagraph (B), by striking ``(A)(ii)'' and
    inserting ``(A)(iv)''.

    (c) Inpatient Rehabilitation Facilities.--Section 1886(j)(3)(D)(i)
    of the Social Security Act, as added by section 3401(d), is amended--
    (1) in subclause (I), by striking ``and'' at the end;
    (2) by redesignating subclause (II) as subclause (III);
    (3) by inserting after subclause (II) the following new
    subclause:

    [[Page 949]]

    ``(II) for each of fiscal years 2012
    and 2013, 0.1 percentage point; and'';
    and
    (4) in subclause (III), as redesignated by paragraph (2), by
    striking ``2012'' and inserting ``2014''.

    (d) Home Health Agencies.--Section 1895(b)(3)(B)(vi)(II) of such
    Act, as added by section 3401(e), <> is amended
    by striking ``and 2012'' and inserting ``, 2012, and 2013''.

    (e) Psychiatric Hospitals.--Section 1886(s)(3)(A) of the Social
    Security Act, as added by section 3401(f), <> is
    amended--
    (1) in clause (i), by striking ``and'' at the end;
    (2) by redesignating clause (ii) as clause (iii);
    (3) by inserting after clause (ii) the following new clause:
    ``(ii) for each of the rate years beginning in
    2012 and 2013, 0.1 percentage point; and''; and
    (4) in clause (iii), as redesignated by paragraph (2), by
    striking ``2012'' and inserting ``2014''.

    (f) Hospice Care.--Section 1814(i)(1)(C) of the Social Security Act
    (42 U.S.C. 1395f(i)(1)(C)), as amended by section 3401(g), is amended--
    (1) in clause (iv)(II), by striking ``0.5'' and inserting
    ``0.3''; and
    (2) in clause (v), in the matter preceding subclause (I), by
    striking ``0.5'' and inserting ``0.3''.

    (g) Outpatient Hospitals.--Section 1833(t)(3)(G)(i) of the Social
    Security Act, as added by section 3401(i), <> is
    amended--
    (1) in subclause (I), by striking ``and'' at the end;
    (2) by redesignating subclause (II) as subclause (III);
    (3) by inserting after subclause (II) the following new
    subclause:
    ``(II) for each of 2012 and 2013,
    0.1 percentage point; and''; and
    (4) in subclause (III), as redesignated by paragraph (2), by
    striking ``2012'' and inserting ``2014''.

    SEC. 10320. EXPANSION OF THE SCOPE OF, AND ADDITIONAL IMPROVEMENTS TO,
    THE INDEPENDENT MEDICARE ADVISORY BOARD.

    (a) In General.--Section 1899A of the Social Security Act, as added
    by section 3403, <> is amended--
    (1) in subsection (c)--
    (A) in paragraph (1)(B), by adding at the end the
    following new sentence: <> ``In any year
    (beginning with 2014) that the Board is not required to
    submit a proposal under this section, the Board shall
    submit to Congress an advisory report on matters related
    to the Medicare program.'';
    (B) in paragraph (2)(A)--
    (i) in clause (iv), by inserting ``or the full
    premium subsidy under section 1860D-14(a)'' before
    the period at the end of the last sentence; and
    (ii) by adding at the end the following new
    clause:
    ``(vii) <> If the Chief
    Actuary of the Centers for Medicare & Medicaid
    Services has made a determination described in
    subsection (e)(3)(B)(i)(II) in the determination
    year, the proposal shall be designed to help
    reduce the growth rate described in paragraph (8)
    while maintaining or enhancing beneficiary access
    to quality care under this title.'';

    [[Page 950]]

    (C) in paragraph (2)(B)--
    (i) in clause (v), by striking ``and'' at the
    end;
    (ii) in clause (vi), by striking the period at
    the end and inserting ``; and''; and
    (iii) by adding at the end the following new
    clause:
    ``(vii) take into account the data and
    findings contained in the annual reports under
    subsection (n) in order to develop proposals that
    can most effectively promote the delivery of
    efficient, high quality care to Medicare
    beneficiaries.'';
    (D) in paragraph (3)--
    (i) in the heading, by striking ``Transmission
    of board proposal to president'' and inserting
    ``Submission of board proposal to congress and the
    president'';
    (ii) in subparagraph (A)(i), by striking
    ``transmit a proposal under this section to the
    President'' and insert ``submit a proposal under
    this section to Congress and the President''; and
    (iii) in subparagraph (A)(ii)--
    (I) in subclause (I), by inserting
    ``or'' at the end;
    (II) in subclause (II), by striking
    ``; or'' and inserting a period; and
    (III) by striking subclause (III);
    (E) in paragraph (4)--
    (i) by striking ``the Board under paragraph
    (3)(A)(i) or''; and
    (ii) by striking ``immediately'' and inserting
    ``within 2 days'';
    (F) in paragraph (5)--
    (i) by striking ``to but'' and inserting
    ``but''; and
    (ii) by inserting ``Congress and'' after
    ``submit a proposal to''; and
    (G) in paragraph (6)(B)(i), by striking ``per
    unduplicated enrollee'' and inserting ``(calculated as
    the sum of per capita spending under each of parts A, B,
    and D)'';
    (2) in subsection (d)--
    (A) in paragraph (1)(A)--
    (i) by inserting ``the Board or'' after ``a
    proposal is submitted by''; and
    (ii) by inserting ``subsection (c)(3)(A)(i)
    or'' after ``the Senate under''; and
    (B) in paragraph (2)(A), by inserting ``the Board
    or'' after ``a proposal is submitted by'';
    (3) in subsection (e)--
    (A) in paragraph (1), by inserting ``the Board or''
    after ``a proposal submitted by''; and
    (B) in paragraph (3)--
    (i) by striking ``Exception.--The Secretary
    shall not be required to implement the
    recommendations contained in a proposal submitted
    in a proposal year by'' and inserting
    ``Exceptions.--
    ``(A) In general.--The Secretary shall not implement
    the recommendations contained in a proposal submitted in
    a proposal year by the Board or'';

    [[Page 951]]

    (ii) by redesignating subparagraphs (A) and
    (B) as clauses (i) and (ii), respectively, and
    indenting appropriately; and
    (iii) by adding at the end the following new
    subparagraph:
    ``(B) Limited additional exception.--
    ``(i) In general.--Subject to clause (ii), the
    Secretary shall not implement the recommendations
    contained in a proposal submitted by the Board or
    the President to Congress pursuant to this section
    in a proposal year (beginning with proposal year
    2019) if--
    ``(I) the Board was required to
    submit a proposal to Congress under this
    section in the year preceding the
    proposal year; and
    ``(II) <> the
    Chief Actuary of the Centers for
    Medicare & Medicaid Services makes a
    determination in the determination year
    that the growth rate described in
    subsection (c)(8) exceeds the growth
    rate described in subsection
    (c)(6)(A)(i).
    ``(ii) Limited additional exception may not be
    applied in two consecutive years.--This
    subparagraph shall not apply if the
    recommendations contained in a proposal submitted
    by the Board or the President to Congress pursuant
    to this section in the year preceding the proposal
    year were not required to be implemented by reason
    of this subparagraph.
    ``(iii) No affect on requirement to submit
    proposals or for congressional consideration of
    proposals.--Clause (i) and (ii) shall not affect--
    ``(I) the requirement of the Board
    or the President to submit a proposal to
    Congress in a proposal year in
    accordance with the provisions of this
    section; or
    ``(II) Congressional consideration
    of a legislative proposal (described in
    subsection (c)(3)(B)(iv)) contained such
    a proposal in accordance with subsection
    (d).'';
    (4) in subsection (f)(3)(B)--
    (A) by striking ``or advisory reports to Congress''
    and inserting ``, advisory reports, or advisory
    recommendations''; and
    (B) by inserting ``or produce the public report
    under subsection (n)'' after ``this section''; and
    (5) by adding at the end the following new subsections:

    ``(n) Annual Public Report.--
    ``(1) In general.--Not later than July 1, 2014, and annually
    thereafter, the Board shall produce a public report containing
    standardized information on system-wide health care costs,
    patient access to care, utilization, and quality-of-care that
    allows for comparison by region, types of services, types of
    providers, and both private payers and the program under this
    title.
    ``(2) Requirements.--Each report produced pursuant to
    paragraph (1) shall include information with respect to the
    following areas:
    ``(A) The quality and costs of care for the
    population at the most local level determined practical
    by the Board

    [[Page 952]]

    (with quality and costs compared to national benchmarks
    and reflecting rates of change, taking into account
    quality measures described in section 1890(b)(7)(B)).
    ``(B) Beneficiary and consumer access to care,
    patient and caregiver experience of care, and the cost-
    sharing or out-of-pocket burden on patients.
    ``(C) Epidemiological shifts and demographic
    changes.
    ``(D) The proliferation, effectiveness, and
    utilization of health care technologies, including
    variation in provider practice patterns and costs.
    ``(E) Any other areas that the Board determines
    affect overall spending and quality of care in the
    private sector.

    ``(o) Advisory Recommendations for Non-Federal Health Care
    Programs.--
    ``(1) In general.-- <> Not later than
    January 15, 2015, and at least once every two years thereafter,
    the Board shall submit to Congress and the President
    recommendations to slow the growth in national health
    expenditures (excluding expenditures under this title and in
    other Federal health care programs) while preserving or
    enhancing quality of care, such as recommendations--
    ``(A) that the Secretary or other Federal agencies
    can implement administratively;
    ``(B) that may require legislation to be enacted by
    Congress in order to be implemented;
    ``(C) that may require legislation to be enacted by
    State or local governments in order to be implemented;
    ``(D) that private sector entities can voluntarily
    implement; and
    ``(E) with respect to other areas determined
    appropriate by the Board.
    ``(2) Coordination.--In making recommendations under
    paragraph (1), the Board shall coordinate such recommendations
    with recommendations contained in proposals and advisory reports
    produced by the Board under subsection (c).
    ``(3) Available to public.--The Board shall make
    recommendations submitted to Congress and the President under
    this subsection available to the public.''.

    (b) Name Change.-- <> Any reference
    in the provisions of, or amendments made by, section 3403 to the
    ``Independent Medicare Advisory Board'' shall be deemed to be a
    reference to the ``Independent Payment Advisory Board''.

    (c) Rule of Construction.-- <> Nothing
    in the amendments made by this section shall preclude the Independent
    Medicare Advisory Board, as established under section 1899A of the
    Social Security Act (as added by section 3403), from solely using data
    from public or private sources to carry out the amendments made by
    subsection (a)(4).

    SEC. 10321. REVISION TO COMMUNITY HEALTH TEAMS.

    Section 3502(c)(2)(A) <> is amended by
    inserting ``or other primary care providers'' after ``physicians''.

    SEC. 10322. QUALITY REPORTING FOR PSYCHIATRIC HOSPITALS.

    (a) In General.--Section 1886(s) of the Social Security Act, as
    added by section 3401(f), <> is amended by adding
    at the end the following new paragraph:
    ``(4) Quality reporting.--

    [[Page 953]]

    ``(A) Reduction in update for failure to report.--
    ``(i) In general.--Under the system described
    in paragraph (1), for rate year 2014 and each
    subsequent rate year, in the case of a psychiatric
    hospital or psychiatric unit that does not submit
    data to the Secretary in accordance with
    subparagraph (C) with respect to such a rate year,
    any annual update to a standard Federal rate for
    discharges for the hospital during the rate year,
    and after application of paragraph (2), shall be
    reduced by 2 percentage points.
    ``(ii) Special rule.--The application of this
    subparagraph may result in such annual update
    being less than 0.0 for a rate year, and may
    result in payment rates under the system described
    in paragraph (1) for a rate year being less than
    such payment rates for the preceding rate year.
    ``(B) Noncumulative application.--Any reduction
    under subparagraph (A) shall apply only with respect to
    the rate year involved and the Secretary shall not take
    into account such reduction in computing the payment
    amount under the system described in paragraph (1) for a
    subsequent rate year.
    ``(C) Submission of quality data.--For rate year
    2014 and each subsequent rate year, each psychiatric
    hospital and psychiatric unit shall submit to the
    Secretary data on quality measures specified under
    subparagraph (D). Such data shall be submitted in a form
    and manner, and at a time, specified by the Secretary
    for purposes of this subparagraph.
    ``(D) Quality measures.--
    ``(i) In general.--Subject to clause (ii), any
    measure specified by the Secretary under this
    subparagraph must have been endorsed by the entity
    with a contract under section 1890(a).
    ``(ii) Exception.--In the case of a specified
    area or medical topic determined appropriate by
    the Secretary for which a feasible and practical
    measure has not been endorsed by the entity with a
    contract under section 1890(a), the Secretary may
    specify a measure that is not so endorsed as long
    as due consideration is given to measures that
    have been endorsed or adopted by a consensus
    organization identified by the Secretary.
    ``(iii) Time frame.--Not later than October 1,
    2012, the Secretary shall publish the measures
    selected under this subparagraph that will be
    applicable with respect to rate year 2014.
    ``(E) Public availability of data submitted.--
    <> The Secretary shall establish
    procedures for making data submitted under subparagraph
    (C) available to the public. Such procedures shall
    ensure that a psychiatric hospital and a psychiatric
    unit has the opportunity to review the data that is to
    be made public with respect to the hospital or unit
    prior to such data being made
    public. <> The Secretary shall report
    quality measures that relate to services furnished in
    inpatient settings in psychiatric hospitals and

    [[Page 954]]

    psychiatric units on the Internet website of the Centers
    for Medicare & Medicaid Services.''.

    (b) Conforming Amendment.--Section 1890(b)(7)(B)(i)(I) of the Social
    Security Act, as added by section 3014, <> is
    amended by inserting ``1886(s)(4)(D),'' after ``1886(o)(2),''.

    SEC. 10323. MEDICARE COVERAGE FOR INDIVIDUALS EXPOSED TO ENVIRONMENTAL
    HEALTH HAZARDS.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C.
    1395 et seq.) is amended by inserting after section 1881 the following
    new section:

    ``SEC. 1881A. <> MEDICARE COVERAGE FOR
    INDIVIDUALS EXPOSED TO ENVIRONMENTAL HEALTH HAZARDS.

    ``(a) Deeming of Individuals as Eligible for Medicare Benefits.--
    ``(1) In general.--For purposes of eligibility for benefits
    under this title, an individual determined under subsection (c)
    to be an environmental exposure affected individual described in
    subsection (e)(2) shall be deemed to meet the conditions
    specified in section 226(a).
    ``(2) Discretionary deeming.--For purposes of eligibility
    for benefits under this title, the Secretary may deem an
    individual determined under subsection (c) to be an
    environmental exposure affected individual described in
    subsection (e)(3) to meet the conditions specified in section
    226(a).
    ``(3) Effective date of coverage.--An Individual who is
    deemed eligible for benefits under this title under paragraph
    (1) or (2) shall be--
    ``(A) entitled to benefits under the program under
    Part A as of the date of such deeming; and
    ``(B) eligible to enroll in the program under Part B
    beginning with the month in which such deeming occurs.

    ``(b) Pilot Program for Care of Certain Individuals Residing in
    Emergency Declaration Areas.--
    ``(1) Program; purpose.--
    ``(A) Primary pilot program.--The Secretary shall
    establish a pilot program in accordance with this
    subsection to provide innovative approaches to
    furnishing comprehensive, coordinated, and cost-
    effective care under this title to individuals described
    in paragraph (2)(A).
    ``(B) Optional pilot programs.--The Secretary may
    establish a separate pilot program, in accordance with
    this subsection, with respect to each geographic area
    subject to an emergency declaration (other than the
    declaration of June 17, 2009), in order to furnish such
    comprehensive, coordinated and cost-effective care to
    individuals described in subparagraph (2)(B) who reside
    in each such area.
    ``(2) Individual described.--For purposes of paragraph (1),
    an individual described in this paragraph is an individual who
    enrolls in part B, submits to the Secretary an application to
    participate in the applicable pilot program under this
    subsection, and--
    ``(A) is an environmental exposure affected
    individual described in subsection (e)(2) who resides in
    or around the geographic area subject to an emergency
    declaration made as of June 17, 2009; or

    [[Page 955]]

    ``(B) is an environmental exposure affected
    individual described in subsection (e)(3) who--
    ``(i) is deemed under subsection (a)(2); and
    ``(ii) meets such other criteria or conditions
    for participation in a pilot program under
    paragraph (1)(B) as the Secretary specifies.
    ``(3) Flexible benefits and services.--A pilot program under
    this subsection may provide for the furnishing of benefits,
    items, or services not otherwise covered or authorized under
    this title, if the Secretary determines that furnishing such
    benefits, items, or services will further the purposes of such
    pilot program (as described in paragraph (1)).
    ``(4) Innovative reimbursement methodologies.--For purposes
    of the pilot program under this subsection, the Secretary--
    ``(A) shall develop and implement appropriate
    methodologies to reimburse providers for furnishing
    benefits, items, or services for which payment is not
    otherwise covered or authorized under this title, if
    such benefits, items, or services are furnished pursuant
    to paragraph (3); and
    ``(B) may develop and implement innovative
    approaches to reimbursing providers for any benefits,
    items, or services furnished under this subsection.
    ``(5) Limitation.--Consistent with section 1862(b), no
    payment shall be made under the pilot program under this
    subsection with respect to benefits, items, or services
    furnished to an environmental exposure affected individual (as
    defined in subsection (e)) to the extent that such individual is
    eligible to receive such benefits, items, or services through
    any other public or private benefits plan or legal agreement.
    ``(6) Waiver authority.--The Secretary may waive such
    provisions of this title and title XI as are necessary to carry
    out pilot programs under this subsection.
    ``(7) Funding.--For purposes of carrying out pilot programs
    under this subsection, the Secretary shall provide for the
    transfer, from the Federal Hospital Insurance Trust Fund under
    section 1817 and the Federal Supplementary Medical Insurance
    Trust Fund under section 1841, in such proportion as the
    Secretary determines appropriate, of such sums as the Secretary
    determines necessary, to the Centers for Medicare & Medicaid
    Services Program Management Account.
    ``(8) Waiver of budget neutrality.--The Secretary shall not
    require that pilot programs under this subsection be budget
    neutral with respect to expenditures under this title.

    ``(c) Determinations.--
    ``(1) By the commissioner of social security.--For purposes
    of this section, the Commissioner of Social Security, in
    consultation with the Secretary, and using the cost allocation
    method prescribed in section 201(g), shall determine whether
    individuals are environmental exposure affected individuals.
    ``(2) By the secretary.--The Secretary shall determine
    eligibility for pilot programs under subsection (b).

    ``(d) Emergency Declaration Defined.--For purposes of this section,
    the term `emergency declaration' means a declaration of a public health
    emergency under section 104(a) of the Comprehensive Environmental
    Response, Compensation, and Liability Act of 1980.

    [[Page 956]]

    ``(e) Environmental Exposure Affected Individual Defined.--
    ``(1) In general.--For purposes of this section, the term
    `environmental exposure affected individual' means--
    ``(A) an individual described in paragraph (2); and
    ``(B) an individual described in paragraph (3).
    ``(2) Individual described.--
    ``(A) In general.--An individual described in this
    paragraph is any individual who--
    ``(i) is diagnosed with 1 or more conditions
    described in subparagraph (B);
    ``(ii) as demonstrated in such manner as the
    Secretary determines appropriate, has been present
    for an aggregate total of 6 months in the
    geographic area subject to an emergency
    declaration specified in subsection (b)(2)(A),
    during a period ending--
    ``(I) not less than 10 years prior
    to such diagnosis; and
    ``(II) prior to the implementation
    of all the remedial and removal actions
    specified in the Record of Decision for
    Operating Unit 4 and the Record of
    Decision for Operating Unit 7;
    ``(iii) files an application for benefits
    under this title (or has an application filed on
    behalf of the individual), including pursuant to
    this section; and
    ``(iv) is determined under this section to
    meet the criteria in this subparagraph.
    ``(B) Conditions described.--For purposes of
    subparagraph (A), the following conditions are described
    in this subparagraph:
    ``(i) Asbestosis, pleural thickening, or
    pleural plaques as established by--
    ``(I) interpretation by a `B Reader'
    qualified physician of a plain chest x-
    ray or interpretation of a computed
    tomographic radiograph of the chest by a
    qualified physician, as determined by
    the Secretary; or
    ``(II) such other diagnostic
    standards as the Secretary specifies,
    except that this clause shall not apply to pleural
    thickening or pleural plaques unless there are
    symptoms or conditions requiring medical treatment
    as a result of these diagnoses.
    ``(ii) Mesothelioma, or malignancies of the
    lung, colon, rectum, larynx, stomach, esophagus,
    pharynx, or ovary, as established by--
    ``(I) pathologic examination of
    biopsy tissue;
    ``(II) cytology from
    bronchioalveolar lavage; or
    ``(III) such other diagnostic
    standards as the Secretary specifies.
    ``(iii) Any other diagnosis which the
    Secretary, in consultation with the Commissioner
    of Social Security, determines is an asbestos-
    related medical condition, as established by such
    diagnostic standards as the Secretary specifies.
    ``(3) Other individual described.--An individual described
    in this paragraph is any individual who--

    [[Page 957]]

    ``(A) is not an individual described in paragraph
    (2);
    ``(B) is diagnosed with a medical condition caused
    by the exposure of the individual to a public health
    hazard to which an emergency declaration applies, based
    on such medical conditions, diagnostic standards, and
    other criteria as the Secretary specifies;
    ``(C) as demonstrated in such manner as the
    Secretary determines appropriate, has been present for
    an aggregate total of 6 months in the geographic area
    subject to the emergency declaration involved, during a
    period determined appropriate by the Secretary;
    ``(D) files an application for benefits under this
    title (or has an application filed on behalf of the
    individual), including pursuant to this section; and
    ``(E) is determined under this section to meet the
    criteria in this paragraph.''.

    (b) Program for Early Detection of Certain Medical Conditions
    Related to Environmental Health Hazards.--Title XX of the Social
    Security Act (42 U.S.C. 1397 et seq.), as amended by section 5507, is
    amended by adding at the end the following:

    ``SEC. 2009. <> PROGRAM FOR EARLY DETECTION OF
    CERTAIN MEDICAL CONDITIONS RELATED TO ENVIRONMENTAL HEALTH
    HAZARDS.

    ``(a) Program Establishment.--The Secretary shall establish a
    program in accordance with this section to make competitive grants to
    eligible entities specified in subsection (b) for the purpose of--
    ``(1) screening at-risk individuals (as defined in
    subsection (c)(1)) for environmental health conditions (as
    defined in subsection (c)(3)); and
    ``(2) developing and disseminating public information and
    education concerning--
    ``(A) the availability of screening under the
    program under this section;
    ``(B) the detection, prevention, and treatment of
    environmental health conditions; and
    ``(C) the availability of Medicare benefits for
    certain individuals diagnosed with environmental health
    conditions under section 1881A.

    ``(b) Eligible Entities.--
    ``(1) In general.--For purposes of this section, an eligible
    entity is an entity described in paragraph (2) which submits an
    application to the Secretary in such form and manner, and
    containing such information and assurances, as the Secretary
    determines appropriate.
    ``(2) Types of eligible entities.--The entities described in
    this paragraph are the following:
    ``(A) A hospital or community health center.
    ``(B) A Federally qualified health center.
    ``(C) A facility of the Indian Health Service.
    ``(D) A National Cancer Institute-designated cancer
    center.
    ``(E) An agency of any State or local government.
    ``(F) A nonprofit organization.
    ``(G) Any other entity the Secretary determines
    appropriate.

    [[Page 958]]

    ``(c) Definitions.--In this section:
    ``(1) At-risk individual.--The term `at-risk individual'
    means an individual who--
    ``(A)(i) as demonstrated in such manner as the
    Secretary determines appropriate, has been present for
    an aggregate total of 6 months in the geographic area
    subject to an emergency declaration specified under
    paragraph (2), during a period ending--
    ``(I) not less than 10 years prior to the date
    of such individual's application under
    subparagraph (B); and
    ``(II) prior to the implementation of all the
    remedial and removal actions specified in the
    Record of Decision for Operating Unit 4 and the
    Record of Decision for Operating Unit 7; or
    ``(ii) meets such other criteria as the Secretary
    determines appropriate considering the type of
    environmental health condition at issue; and
    ``(B) has submitted an application (or has an
    application submitted on the individual's behalf), to an
    eligible entity receiving a grant under this section,
    for screening under the program under this section.
    ``(2) Emergency declaration.--The term `emergency
    declaration' means a declaration of a public health emergency
    under section 104(a) of the Comprehensive Environmental
    Response, Compensation, and Liability Act of 1980.
    ``(3) Environmental health condition.--The term
    `environmental health condition' means--
    ``(A) asbestosis, pleural thickening, or pleural
    plaques, as established by--
    ``(i) interpretation by a `B Reader' qualified
    physician of a plain chest x-ray or interpretation
    of a computed tomographic radiograph of the chest
    by a qualified physician, as determined by the
    Secretary; or
    ``(ii) such other diagnostic standards as the
    Secretary specifies;
    ``(B) mesothelioma, or malignancies of the lung,
    colon, rectum, larynx, stomach, esophagus, pharynx, or
    ovary, as established by--
    ``(i) pathologic examination of biopsy tissue;
    ``(ii) cytology from bronchioalveolar lavage;
    or
    ``(iii) such other diagnostic standards as the
    Secretary specifies; and
    ``(C) any other medical condition which the
    Secretary determines is caused by exposure to a
    hazardous substance or pollutant or contaminant at a
    Superfund site to which an emergency declaration
    applies, based on such criteria and as established by
    such diagnostic standards as the Secretary specifies.
    ``(4) Hazardous substance; pollutant; contaminant.--The
    terms `hazardous substance', `pollutant', and `contaminant' have
    the meanings given those terms in section 101 of the
    Comprehensive Environmental Response, Compensation, and
    Liability Act of 1980 (42 U.S.C. 9601).
    ``(5) Superfund site.--The term `Superfund site' means a
    site included on the National Priorities List developed by the
    President in accordance with section 105(a)(8)(B) of the

    [[Page 959]]

    Comprehensive Environmental Response, Compensation, and
    Liability Act of 1980 (42 U.S.C. 9605(a)(8)(B)).

    ``(d) Health Coverage Unaffected.--Nothing in this section shall be
    construed to affect any coverage obligation of a governmental or private
    health plan or program relating to an at-risk individual.
    ``(e) Funding.--
    ``(1) In general.--Out of any funds in the Treasury not
    otherwise appropriated, there are appropriated to the Secretary,
    to carry out the program under this section--
    ``(A) $23,000,000 for the period of fiscal years
    2010 through 2014; and
    ``(B) $20,000,000 for each 5-fiscal year period
    thereafter.
    ``(2) Availability.--Funds appropriated under paragraph (1)
    shall remain available until expended.

    ``(f) Nonapplication.--
    ``(1) In general.--Except as provided in paragraph (2), the
    preceding sections of this title shall not apply to grants
    awarded under this section.
    ``(2) Limitations on use of grants.--Section 2005(a) shall
    apply to a grant awarded under this section to the same extent
    and in the same manner as such section applies to payments to
    States under this title, except that paragraph (4) of such
    section shall not be construed to prohibit grantees from
    conducting screening for environmental health conditions as
    authorized under this section.''.

    SEC. 10324. PROTECTIONS FOR FRONTIER STATES.

    (a) Floor on Area Wage Index for Hospitals in Frontier States.--
    (1) In general.--Section 1886(d)(3)(E) of the Social
    Security Act (42 U.S.C. 1395ww(d)(3)(E)) is amended--
    (A) in clause (i), by striking ``clause (ii)'' and
    inserting ``clause (ii) or (iii)''; and
    (B) by adding at the end the following new clause:
    ``(iii) Floor on area wage index for hospitals
    in frontier states.--
    ``(I) In general.--Subject to
    subclause (IV), for discharges occurring
    on or after October 1, 2010, the area
    wage index applicable under this
    subparagraph to any hospital which is
    located in a frontier State (as defined
    in subclause (II)) may not be less than
    1.00.
    ``(II) Frontier state defined.--In
    this clause, the term `frontier State'
    means a State in which at least 50
    percent of the counties in the State are
    frontier counties.
    ``(III) Frontier county defined.--In
    this clause, the term `frontier county'
    means a county in which the population
    per square mile is less than 6.
    ``(IV) Limitation.--This clause
    shall not apply to any hospital located
    in a State that receives a non-labor
    related share adjustment under paragraph
    (5)(H).''.

    [[Page 960]]

    (2) Waiving budget neutrality.--Section 1886(d)(3)(E) of the
    Social Security Act (42 U.S.C. 1395ww(d)(3)(E)), as amended by
    subsection (a), is amended in the third sentence by inserting
    ``and the amendments made by section 10324(a)(1) of the Patient
    Protection and Affordable Care Act'' after ``2003''.

    (b) Floor on Area Wage Adjustment Factor for Hospital Outpatient
    Department Services in Frontier States.--Section 1833(t) of the Social
    Security Act (42 U.S.C. 1395l(t)), as amended by section 3138, is
    amended--
    (1) in paragraph (2)(D), by striking ``the Secretary'' and
    inserting ``subject to paragraph (19), the Secretary''; and
    (2) by adding at the end the following new paragraph:
    ``(19) Floor on area wage adjustment factor for hospital
    outpatient department services in frontier states.--
    ``(A) In general.--Subject to subparagraph (B), with
    respect to covered OPD services furnished on or after
    January 1, 2011, the area wage adjustment factor
    applicable under the payment system established under
    this subsection to any hospital outpatient department
    which is located in a frontier State (as defined in
    section 1886(d)(3)(E)(iii)(II)) may not be less than
    1.00. The preceding sentence shall not be applied in a
    budget neutral manner.
    ``(B) Limitation.--This paragraph shall not apply to
    any hospital outpatient department located in a State
    that receives a non-labor related share adjustment under
    section 1886(d)(5)(H).''.

    (c) Floor for Practice Expense Index for Physicians' Services
    Furnished in Frontier States.--Section 1848(e)(1) of the Social Security
    Act (42 U.S.C. 1395w-4(e)(1)), as amended by section 3102, is amended--
    (1) in subparagraph (A), by striking ``and (H)'' and
    inserting ``(H), and (I)''; and
    (2) by adding at the end the following new subparagraph:
    ``(I) Floor for practice expense index for services
    furnished in frontier states.--
    ``(i) In general.--Subject to clause (ii), for
    purposes of payment for services furnished in a
    frontier State (as defined in section
    1886(d)(3)(E)(iii)(II)) on or after January 1,
    2011, after calculating the practice expense index
    in subparagraph (A)(i), the Secretary shall
    increase any such index to 1.00 if such index
    would otherwise be less that 1.00. The preceding
    sentence shall not be applied in a budget neutral
    manner.
    ``(ii) Limitation.--This subparagraph shall
    not apply to services furnished in a State that
    receives a non-labor related share adjustment
    under section 1886(d)(5)(H).''.

    SEC. 10325. REVISION TO SKILLED NURSING FACILITY PROSPECTIVE PAYMENT
    SYSTEM.

    (a) Temporary Delay of RUG-IV.-- <> Notwithstanding any other provision of law, the Secretary of
    Health and Human Services shall not, prior to October 1, 2011, implement
    Version 4 of the Resource Utilization Groups (in this subsection
    refereed to as ``RUG-IV'') published in the Federal Register on August
    11, 2009, entitled ``Prospective Payment System and Consolidated Billing
    for

    [[Page 961]]

    Skilled Nursing Facilities for FY 2010; Minimum Data Set, Version 3.0
    for Skilled Nursing Facilities and Medicaid Nursing Facilities'' (74
    Fed. Reg. 40288). Beginning on October 1, 2010, the Secretary of Health
    and Human Services shall implement the change specific to therapy
    furnished on a concurrent basis that is a component of RUG-IV and
    changes to the lookback period to ensure that only those services
    furnished after admission to a skilled nursing facility are used as
    factors in determining a case mix classification under the skilled
    nursing facility prospective payment system under section 1888(e) of the
    Social Security Act (42 U.S.C. 1395yy(e)).

    (b) Construction.--Nothing in this section shall be interpreted as
    delaying the implementation of Version 3.0 of the Minimum Data Sets (MDS
    3.0) beyond the planned implementation date of October 1, 2010.

    SEC. 10326. <> PILOT TESTING PAY-FOR-
    PERFORMANCE PROGRAMS FOR CERTAIN MEDICARE PROVIDERS.

    (a) In General.-- <> Not later than January 1,
    2016, the Secretary of Health and Human Services (in this section
    referred to as the ``Secretary'') shall, for each provider described in
    subsection (b), conduct a separate pilot program under title XVIII of
    the Social Security Act to test the implementation of a value-based
    purchasing program for payments under such title for the provider.

    (b) Providers Described.--The providers described in this paragraph
    are the following:
    (1) Psychiatric hospitals (as described in clause (i) of
    section 1886(d)(1)(B) of such Act (42 U.S.C. 1395ww(d)(1)(B)))
    and psychiatric units (as described in the matter following
    clause (v) of such section).
    (2) Long-term care hospitals (as described in clause (iv) of
    such section).
    (3) Rehabilitation hospitals (as described in clause (ii) of
    such section).
    (4) PPS-exempt cancer hospitals (as described in clause (v)
    of such section).
    (5) Hospice programs (as defined in section 1861(dd)(2) of
    such Act (42 U.S.C. 1395x(dd)(2))).

    (c) Waiver Authority.--The Secretary may waive such requirements of
    titles XI and XVIII of the Social Security Act as may be necessary
    solely for purposes of carrying out the pilot programs under this
    section.
    (d) No Additional Program Expenditures.--Payments under this section
    under the separate pilot program for value based purchasing (as
    described in subsection (a)) for each provider type described in
    paragraphs (1) through (5) of subsection (b) for applicable items and
    services under title XVIII of the Social Security Act for a year shall
    be established in a manner that does not result in spending more under
    each such value based purchasing program for such year than would
    otherwise be expended for such provider type for such year if the pilot
    program were not implemented, as estimated by the Secretary.
    (e) <> Expansion of Pilot Program.--The
    Secretary may, at any point after January 1, 2018, expand the duration
    and scope of a pilot program conducted under this subsection, to the
    extent determined appropriate by the Secretary, if--
    (1) the Secretary determines that such expansion is expected
    to--

    [[Page 962]]

    (A) reduce spending under title XVIII of the Social
    Security Act without reducing the quality of care; or
    (B) improve the quality of care and reduce spending;
    (2) <> the Chief Actuary of the
    Centers for Medicare & Medicaid Services certifies that such
    expansion would reduce program spending under such title XVIII;
    and
    (3) the Secretary determines that such expansion would not
    deny or limit the coverage or provision of benefits under such
    title XIII for Medicare beneficiaries.

    SEC. 10327. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING SYSTEM.

    (a) In General.--Section 1848(m) of the Social Security Act (42
    U.S.C. 1395w-4(m)) is amended by adding at the end the following new
    paragraph:
    ``(7) Additional incentive payment.--
    ``(A) In general.-- <> For 2011
    through 2014, if an eligible professional meets the
    requirements described in subparagraph (B), the
    applicable quality percent for such year, as described
    in clauses (iii) and (iv) of paragraph (1)(B), shall be
    increased by 0.5 percentage points.
    ``(B) Requirements described.--In order to qualify
    for the additional incentive payment described in
    subparagraph (A), an eligible professional shall meet
    the following requirements:
    ``(i) The eligible professional shall--
    ``(I) satisfactorily submit data on
    quality measures for purposes of
    paragraph (1) for a year; and
    ``(II) have such data submitted on
    their behalf through a Maintenance of
    Certification Program (as defined in
    subparagraph (C)(i)) that meets--
    ``(aa) the criteria for a
    registry (as described in
    subsection (k)(4)); or
    ``(bb) an alternative form
    and manner determined
    appropriate by the Secretary.
    ``(ii) The eligible professional, more
    frequently than is required to qualify for or
    maintain board certification status--
    ``(I) participates in such a
    Maintenance of Certification program for
    a year; and
    ``(II) successfully completes a
    qualified Maintenance of Certification
    Program practice assessment (as defined
    in subparagraph (C)(ii)) for such year.
    ``(iii) A Maintenance of Certification program
    submits to the Secretary, on behalf of the
    eligible professional, information--
    ``(I) in a form and manner specified
    by the Secretary, that the eligible
    professional has successfully met the
    requirements of clause (ii) (which may
    be in the form of a structural measure);
    ``(II) if requested by the
    Secretary, on the survey of patient
    experience with care (as described in
    subparagraph (C)(ii)(II)); and
    ``(III) as the Secretary may
    require, on the methods, measures, and
    data used under the Maintenance of
    Certification Program and the

    [[Page 963]]

    qualified Maintenance of Certification
    Program practice assessment.
    ``(C) Definitions.--For purposes of this paragraph:
    ``(i) The term `Maintenance of Certification
    Program' means a continuous assessment program,
    such as qualified American Board of Medical
    Specialties Maintenance of Certification program
    or an equivalent program (as determined by the
    Secretary), that advances quality and the lifelong
    learning and self-assessment of board certified
    specialty physicians by focusing on the
    competencies of patient care, medical knowledge,
    practice-based learning, interpersonal and
    communication skills and professionalism. Such a
    program shall include the following:
    ``(I) The program requires the
    physician to maintain a valid,
    unrestricted medical license in the
    United States.
    ``(II) The program requires a
    physician to participate in educational
    and self-assessment programs that
    require an assessment of what was
    learned.
    ``(III) The program requires a
    physician to demonstrate, through a
    formalized, secure examination, that the
    physician has the fundamental diagnostic
    skills, medical knowledge, and clinical
    judgment to provide quality care in
    their respective specialty.
    ``(IV) The program requires
    successful completion of a qualified
    Maintenance of Certification Program
    practice assessment as described in
    clause (ii).
    ``(ii) The term `qualified Maintenance of
    Certification Program practice assessment' means
    an assessment of a physician's practice that--
    ``(I) includes an initial assessment
    of an eligible professional's practice
    that is designed to demonstrate the
    physician's use of evidence-based
    medicine;
    ``(II) includes a survey of patient
    experience with care; and
    ``(III) requires a physician to
    implement a quality improvement
    intervention to address a practice
    weakness identified in the initial
    assessment under subclause (I) and then
    to remeasure to assess performance
    improvement after such intervention.''.

    (b) Authority.--Section 3002(c) of this Act <> is amended by adding at the end the following new paragraph:
    ``(3) Authority.-- <> For years after
    2014, if the Secretary of Health and Human Services determines
    it to be appropriate, the Secretary may incorporate
    participation in a Maintenance of Certification Program and
    successful completion of a qualified Maintenance of
    Certification Program practice assessment into the composite of
    measures of quality of care furnished pursuant to the physician
    fee schedule payment modifier, as described in section
    1848(p)(2) of the Social Security Act (42 U.S.C. 1395w-
    4(p)(2)).''.

    [[Page 964]]

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

    SEC. 10328. IMPROVEMENT IN PART D MEDICATION THERAPY MANAGEMENT (MTM)
    PROGRAMS.

    (a) In General.--Section 1860D-4(c)(2) of the Social Security Act
    (42 U.S.C. 1395w-104(c)(2)) is amended--
    (1) by redesignating subparagraphs (C), (D), and (E) as
    subparagraphs (E), (F), and (G), respectively; and
    (2) by inserting after subparagraph (B) the following new
    subparagraphs:
    ``(C) Required interventions.--For plan years
    beginning on or after the date that is 2 years after the
    date of the enactment of the Patient Protection and
    Affordable Care Act, prescription drug plan sponsors
    shall offer medication therapy management services to
    targeted beneficiaries described in subparagraph (A)(ii)
    that include, at a minimum, the following to increase
    adherence to prescription medications or other goals
    deemed necessary by the Secretary:
    ``(i) An annual comprehensive medication
    review furnished person-to-person or using
    telehealth technologies (as defined by the
    Secretary) by a licensed pharmacist or other
    qualified provider. The comprehensive medication
    review--
    ``(I) shall include a review of the
    individual's medications and may result
    in the creation of a recommended
    medication action plan or other actions
    in consultation with the individual and
    with input from the prescriber to the
    extent necessary and practicable; and
    ``(II) shall include providing the
    individual with a written or printed
    summary of the results of the review.
    The Secretary, in consultation with relevant
    stakeholders, shall develop a standardized format
    for the action plan under subclause (I) and the
    summary under subclause (II).
    ``(ii) Follow-up interventions as warranted
    based on the findings of the annual medication
    review or the targeted medication enrollment and
    which may be provided person-to-person or using
    telehealth technologies (as defined by the
    Secretary).
    ``(D) Assessment.--The prescription drug plan
    sponsor shall have in place a process to assess, at
    least on a quarterly basis, the medication use of
    individuals who are at risk but not enrolled in the
    medication therapy management program, including
    individuals who have experienced a transition in care,
    if the prescription drug plan sponsor has access to that
    information.

    [[Page 965]]

    ``(E) Automatic enrollment with ability to opt-
    out.--The prescription drug plan sponsor shall have in
    place a process to--
    ``(i) subject to clause (ii), automatically
    enroll targeted beneficiaries described in
    subparagraph (A)(ii), including beneficiaries
    identified under subparagraph (D), in the
    medication therapy management program required
    under this subsection; and
    ``(ii) permit such beneficiaries to opt-out of
    enrollment in such program.''.

    (b) <> Rule of Construction.--Nothing
    in this section shall limit the authority of the Secretary of Health and
    Human Services to modify or broaden requirements for a medication
    therapy management program under part D of title XVIII of the Social
    Security Act or to study new models for medication therapy management
    through the Center for Medicare and Medicaid Innovation under section
    1115A of such Act, as added by section 3021.

    SEC. 10329. DEVELOPING METHODOLOGY TO ASSESS HEALTH PLAN VALUE.

    (a) Development.--The Secretary of Health and Human Services
    (referred to in this section as the ``Secretary''), in consultation with
    relevant stakeholders including health insurance issuers, health care
    consumers, employers, health care providers, and other entities
    determined appropriate by the Secretary, shall develop a methodology to
    measure health plan value. Such methodology shall take into
    consideration, where applicable--
    (1) the overall cost to enrollees under the plan;
    (2) the quality of the care provided for under the plan;
    (3) the efficiency of the plan in providing care;
    (4) the relative risk of the plan's enrollees as compared to
    other plans;
    (5) the actuarial value or other comparative measure of the
    benefits covered under the plan; and
    (6) other factors determined relevant by the Secretary.

    (b) Report.--Not later than 18 months after the date of enactment of
    this Act, the Secretary shall submit to Congress a report concerning the
    methodology developed under subsection (a).

    SEC. 10330. MODERNIZING COMPUTER AND DATA SYSTEMS OF THE CENTERS FOR
    MEDICARE & MEDICAID SERVICES TO SUPPORT IMPROVEMENTS IN CARE
    DELIVERY.

    (a) In General.--The <> Secretary of Health and Human
    Services (in this section referred to as the ``Secretary'') shall
    develop a plan (and detailed budget for the resources needed to
    implement such plan) to modernize the computer and data systems of the
    Centers for Medicare & Medicaid Services (in this section referred to as
    ``CMS'').

    (b) Considerations.--In developing the plan, the Secretary shall
    consider how such modernized computer system could--
    (1) in accordance with the regulations promulgated under
    section 264(c) of the Health Insurance Portability and
    Accountability Act of 1996, make available data in a reliable
    and timely manner to providers of services and suppliers to
    support their efforts to better manage and coordinate care
    furnished to beneficiaries of CMS programs; and
    (2) support consistent evaluations of payment and delivery
    system reforms under CMS programs.

    [[Page 966]]

    (c) Posting of Plan.-- <> By not later
    than 9 months after the date of the enactment of this Act, the Secretary
    shall post on the website of the Centers for Medicare & Medicaid
    Services the plan described in subsection (a).

    SEC. 10331. <> PUBLIC REPORTING OF PERFORMANCE
    INFORMATION.

    (a) <> In General.--
    (1) Development.-- <> Not later than
    January 1, 2011, the Secretary shall develop a Physician Compare
    Internet website with information on physicians enrolled in the
    Medicare program under section 1866(j) of the Social Security
    Act (42 U.S.C. 1395cc(j)) and other eligible professionals who
    participate in the Physician Quality Reporting Initiative under
    section 1848 of such Act (42 U.S.C. 1395w-4).
    (2) Plan.-- <> Not later than January 1,
    2013, and with respect to reporting periods that begin no
    earlier than January 1, 2012, the Secretary shall also implement
    a plan for making publicly available through Physician Compare,
    consistent with subsection (c), information on physician
    performance that provides comparable information for the public
    on quality and patient experience measures with respect to
    physicians enrolled in the Medicare program under such section
    1866(j). To the extent scientifically sound measures that are
    developed consistent with the requirements of this section are
    available, such information, to the extent practicable, shall
    include--
    (A) measures collected under the Physician Quality
    Reporting Initiative;
    (B) an assessment of patient health outcomes and the
    functional status of patients;
    (C) an assessment of the continuity and coordination
    of care and care transitions, including episodes of care
    and risk-adjusted resource use;
    (D) an assessment of efficiency;
    (E) an assessment of patient experience and patient,
    caregiver, and family engagement;
    (F) an assessment of the safety, effectiveness, and
    timeliness of care; and
    (G) other information as determined appropriate by
    the Secretary.

    (b) Other Required Considerations.--In developing and implementing
    the plan described in subsection (a)(2), the Secretary shall, to the
    extent practicable, include--
    (1) processes to assure that data made public, either by the
    Centers for Medicare & Medicaid Services or by other entities,
    is statistically valid and reliable, including risk adjustment
    mechanisms used by the Secretary;
    (2) processes by which a physician or other eligible
    professional whose performance on measures is being publicly
    reported has a reasonable opportunity, as determined by the
    Secretary, to review his or her individual results before they
    are made public;
    (3) processes by the Secretary to assure that the
    implementation of the plan and the data made available on
    Physician Compare provide a robust and accurate portrayal of a
    physician's performance;
    (4) data that reflects the care provided to all patients
    seen by physicians, under both the Medicare program and,

    [[Page 967]]

    to the extent practicable, other payers, to the extent such
    information would provide a more accurate portrayal of physician
    performance;
    (5) processes to ensure appropriate attribution of care when
    multiple physicians and other providers are involved in the care
    of a patient;
    (6) processes to ensure timely statistical performance
    feedback is provided to physicians concerning the data reported
    under any program subject to public reporting under this
    section; and
    (7) implementation of computer and data systems of the
    Centers for Medicare & Medicaid Services that support valid,
    reliable, and accurate public reporting activities authorized
    under this section.

    (c) Ensuring Patient Privacy.--The Secretary shall ensure that
    information on physician performance and patient experience is not
    disclosed under this section in a manner that violates sections 552 or
    552a of title 5, United States Code, with regard to the privacy of
    individually identifiable health information.
    (d) Feedback From Multi-stakeholder Groups.--The Secretary shall
    take into consideration input provided by multi-stakeholder groups,
    consistent with sections 1890(b)(7) and 1890A of the Social Security
    Act, as added by section 3014 of this Act, in selecting quality measures
    for use under this section.
    (e) Consideration of Transition to Value-based Purchasing.--In
    developing the plan under this subsection (a)(2), the Secretary shall,
    as the Secretary determines appropriate, consider the plan to transition
    to a value-based purchasing program for physicians and other
    practitioners developed under section 131 of the Medicare Improvements
    for Patients and Providers Act of 2008 (Public Law 110-275).
    (f) Report to Congress.--Not later than January 1, 2015, the
    Secretary shall submit to Congress a report on the Physician Compare
    Internet website developed under subsection (a)(1). Such report shall
    include information on the efforts of and plans made by the Secretary to
    collect and publish data on physician quality and efficiency and on
    patient experience of care in support of value-based purchasing and
    consumer choice, together with recommendations for such legislation and
    administrative action as the Secretary determines appropriate.
    (g) Expansion.--At any time before the date on which the report is
    submitted under subsection (f), the Secretary may expand (including
    expansion to other providers of services and suppliers under title XVIII
    of the Social Security Act) the information made available on such
    website.
    (h) Financial Incentives To Encourage Consumers To Choose High
    Quality Providers.-- <> The Secretary may establish a
    demonstration program, not later than January 1, 2019, to provide
    financial incentives to Medicare beneficiaries who are furnished
    services by high quality physicians, as determined by the Secretary
    based on factors in subparagraphs (A) through (G) of subsection (a)(2).
    In no case may Medicare beneficiaries be required to pay increased
    premiums or cost sharing or be subject to a reduction in benefits under
    title XVIII of the Social Security Act as a result of such demonstration
    program. The Secretary shall ensure that

    [[Page 968]]

    any such demonstration program does not disadvantage those beneficiaries
    without reasonable access to high performing physicians or create
    financial inequities under such title.

    (i) Definitions.--In this section:
    (1) Eligible professional.--The term ``eligible
    professional'' has the meaning given that term for purposes of
    the Physician Quality Reporting Initiative under section 1848 of
    the Social Security Act (42 U.S.C. 1395w-4).
    (2) Physician.--The term ``physician'' has the meaning given
    that term in section 1861(r) of such Act (42 U.S.C. 1395x(r)).
    (3) Physician compare.--The term ``Physician Compare'' means
    the Internet website developed under subsection (a)(1).
    (4) Secretary.--The term ``Secretary'' means the Secretary
    of Health and Human Services.

    SEC. 10332. AVAILABILITY OF MEDICARE DATA FOR PERFORMANCE MEASUREMENT.

    (a) In General.--Section 1874 of the Social Security Act (42 U.S.C.
    1395kk) is amended by adding at the end the following new subsection:
    ``(e) Availability of Medicare Data.--
    ``(1) In general.--Subject to paragraph (4), the Secretary
    shall make available to qualified entities (as defined in
    paragraph (2)) data described in paragraph (3) for the
    evaluation of the performance of providers of services and
    suppliers.
    ``(2) Qualified entities.--For purposes of this subsection,
    the term `qualified entity' means a public or private entity
    that--
    ``(A) is qualified (as determined by the Secretary)
    to use claims data to evaluate the performance of
    providers of services and suppliers on measures of
    quality, efficiency, effectiveness, and resource use;
    and
    ``(B) agrees to meet the requirements described in
    paragraph (4) and meets such other requirements as the
    Secretary may specify, such as ensuring security of
    data.
    ``(3) Data described.--The data described in this paragraph
    are standardized extracts (as determined by the Secretary) of
    claims data under parts A, B, and D for items and services
    furnished under such parts for one or more specified geographic
    areas and time periods requested by a qualified entity. The
    Secretary shall take such actions as the Secretary deems
    necessary to protect the identity of individuals entitled to or
    enrolled for benefits under such parts.
    ``(4) Requirements.--
    ``(A) Fee.--Data described in paragraph (3) shall be
    made available to a qualified entity under this
    subsection at a fee equal to the cost of making such
    data available. Any fee collected pursuant to the
    preceding sentence shall be deposited into the Federal
    Supplementary Medical Insurance Trust Fund under section
    1841.
    ``(B) Specification of uses and methodologies.--A
    qualified entity requesting data under this subsection
    shall--
    ``(i) submit to the Secretary a description of
    the methodologies that such qualified entity will
    use to

    [[Page 969]]

    evaluate the performance of providers of services
    and suppliers using such data;
    ``(ii)(I) except as provided in subclause
    (II), if available, use standard measures, such as
    measures endorsed by the entity with a contract
    under section 1890(a) and measures developed
    pursuant to section 931 of the Public Health
    Service Act; or
    ``(II) use alternative measures if the
    Secretary, in consultation with appropriate
    stakeholders, determines that use of such
    alternative measures would be more valid,
    reliable, responsive to consumer preferences,
    cost-effective, or relevant to dimensions of
    quality and resource use not addressed by such
    standard measures;
    ``(iii) include data made available under this
    subsection with claims data from sources other
    than claims data under this title in the
    evaluation of performance of providers of services
    and suppliers;
    ``(iv) only include information on the
    evaluation of performance of providers and
    suppliers in reports described in subparagraph
    (C);
    ``(v) make available to providers of services
    and suppliers, upon their request, data made
    available under this subsection; and
    ``(vi) prior to their release, submit to the
    Secretary the format of reports under subparagraph
    (C).
    ``(C) Reports.--Any report by a qualified entity
    evaluating the performance of providers of services and
    suppliers using data made available under this
    subsection shall--
    ``(i) include an understandable description of
    the measures, which shall include quality measures
    and the rationale for use of other measures
    described in subparagraph (B)(ii)(II), risk
    adjustment methods, physician attribution methods,
    other applicable methods, data specifications and
    limitations, and the sponsors, so that consumers,
    providers of services and suppliers, health plans,
    researchers, and other stakeholders can assess
    such reports;
    ``(ii) be made available confidentially, to
    any provider of services or supplier to be
    identified in such report, prior to the public
    release of such report, and provide an opportunity
    to appeal and correct errors;
    ``(iii) only include information on a provider
    of services or supplier in an aggregate form as
    determined appropriate by the Secretary; and
    ``(iv) <> except as
    described in clause (ii), be made available to the
    public.
    ``(D) Approval and limitation of uses.--The
    Secretary shall not make data described in paragraph (3)
    available to a qualified entity unless the qualified
    entity agrees to release the information on the
    evaluation of performance of providers of services and
    suppliers. Such entity shall only use such data, and
    information derived from such evaluation, for the
    reports under subparagraph (C). Data released to a
    qualified entity under this subsection shall not be
    subject to discovery or admission as

    [[Page 970]]

    evidence in judicial or administrative proceedings
    without consent of the applicable provider of services
    or supplier.''.

    (b) <> Effective Date.--The amendment
    made by subsection (a) shall take effect on January 1, 2012.

    SEC. 10333. COMMUNITY-BASED COLLABORATIVE CARE NETWORKS.

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

    ``Subpart XI--Community-Based Collaborative Care Network Program

    ``SEC. 340H. <> COMMUNITY-BASED COLLABORATIVE CARE
    NETWORK PROGRAM.

    ``(a) In General.--The Secretary may award grants to eligible
    entities to support community-based collaborative care networks that
    meet the requirements of subsection (b).
    ``(b) Community-based Collaborative Care Networks.--
    ``(1) Description.--A community-based collaborative care
    network (referred to in this section as a `network') shall be a
    consortium of health care providers with a joint governance
    structure (including providers within a single entity) that
    provides comprehensive coordinated and integrated health care
    services (as defined by the Secretary) for low-income
    populations.
    ``(2) Required inclusion.--A network shall include the
    following providers (unless such provider does not exist within
    the community, declines or refuses to participate, or places
    unreasonable conditions on their participation):
    ``(A) A hospital that meets the criteria in section
    1923(b)(1) of the Social Security Act; and
    ``(B) All Federally qualified health centers (as
    defined in section 1861(aa) of the Social Security Act
    located in the community.
    ``(3) Priority.--In awarding grants, the Secretary shall
    give priority to networks that include--
    ``(A) the capability to provide the broadest range
    of services to low-income individuals;
    ``(B) the broadest range of providers that currently
    serve a high volume of low-income individuals; and
    ``(C) a county or municipal department of health.

    ``(c) Application.--
    ``(1) Application.--A network described in subsection (b)
    shall submit an application to the Secretary.
    ``(2) Renewal.--In subsequent years, based on the
    performance of grantees, the Secretary may provide renewal
    grants to prior year grant recipients.

    ``(d) Use of Funds.--
    ``(1) Use by grantees.--Grant funds may be used for the
    following activities:
    ``(A) Assist low-income individuals to--
    ``(i) access and appropriately use health
    services;
    ``(ii) enroll in health coverage programs; and
    ``(iii) obtain a regular primary care provider
    or a medical home.
    ``(B) Provide case management and care management.

    [[Page 971]]

    ``(C) Perform health outreach using neighborhood
    health workers or through other means.
    ``(D) Provide transportation.
    ``(E) Expand capacity, including through telehealth,
    after-hours services or urgent care.
    ``(F) Provide direct patient care services.
    ``(2) Grant funds to hrsa grantees.--The Secretary may limit
    the percent of grant funding that may be spent on direct care
    services provided by grantees of programs administered by the
    Health Resources and Services Administration or impose other
    requirements on such grantees deemed necessary.

    ``(e) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary for
    each of fiscal years 2011 through 2015.''.

    SEC. 10334. MINORITY HEALTH.

    (a) Office of Minority Health.--
    (1) In general.--Section 1707 of the Public Health Service
    Act (42 U.S.C. 300u-6) is amended--
    (A) <> in subsection (a), by
    striking ``within the Office of Public Health and
    Science'' and all that follows through the end and
    inserting ``. The Office of Minority Health as existing
    on the date of enactment of the Patient Protection and
    Affordable Care Act shall be transferred to the Office
    of the Secretary in such manner that there is
    established in the Office of the Secretary, the Office
    of Minority Health, which shall be headed by the Deputy
    Assistant Secretary for Minority Health who shall report
    directly to the Secretary, and shall retain and
    strengthen authorities (as in existence on such date of
    enactment) for the purpose of improving minority health
    and the quality of health care minorities receive, and
    eliminating racial and ethnic
    disparities. <> In
    carrying out this subsection, the Secretary, acting
    through the Deputy Assistant Secretary, shall award
    grants, contracts, enter into memoranda of
    understanding, cooperative, interagency, intra-agency
    and other agreements with public and nonprofit private
    entities, agencies, as well as Departmental and Cabinet
    agencies and organizations, and with organizations that
    are indigenous human resource providers in communities
    of color to assure improved health status of racial and
    ethnic minorities, and shall develop measures to
    evaluate the effectiveness of activities aimed at
    reducing health disparities and supporting the local
    community. Such measures shall evaluate community
    outreach activities, language services, workforce
    cultural competence, and other areas as determined by
    the Secretary.''; and
    (B) by striking subsection (h) and inserting the
    following:

    ``(h) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated such sums as
    may be necessary for each of fiscal years 2011 through 2016.''.
    (2) <> Transfer of functions.--
    There are transferred to the Office of Minority Health in the
    office of the Secretary of Health and Human Services, all
    duties, responsibilities, authorities, accountabilities,
    functions, staff, funds, award

    [[Page 972]]

    mechanisms, and other entities under the authority of the Office
    of Minority Health of the Public Health Service as in effect on
    the date before the date of enactment of this Act, which shall
    continue in effect according to the terms in effect on the date
    before such date of enactment, until modified, terminated,
    superseded, set aside, or revoked in accordance with law by the
    President, the Secretary, a court of competent jurisdiction, or
    by operation of law.
    (3) Reports.-- <> Not later than
    1 year after the date of enactment of this section, and
    biennially thereafter, the Secretary of Health and Human
    Services shall prepare and submit to the appropriate committees
    of Congress a report describing the activities carried out under
    section 1707 of the Public Health Service Act (as amended by
    this subsection) during the period for which the report is being
    prepared. Not later than 1 year after the date of enactment of
    this section, and biennially thereafter, the heads of each of
    the agencies of the Department of Health and Human Services
    shall submit to the Deputy Assistant Secretary for Minority
    Health a report summarizing the minority health activities of
    each of the respective agencies.

    (b) Establishment of Individual Offices of Minority Health Within
    the Department of Health and Human Services.--
    (1) In general.--Title XVII of the Public Health Service Act
    (42 U.S.C. 300u et seq.) is amended by inserting after section
    1707 the following section:

    ``SEC. 1707A. <> INDIVIDUAL OFFICES OF MINORITY
    HEALTH WITHIN THE DEPARTMENT.

    ``(a) In General.--The head of each agency specified in subsection
    (b)(1) shall establish within the agency an office to be known as the
    Office of Minority Health. <> The head of each such
    Office shall be appointed by the head of the agency within which the
    Office is established, and shall report directly to the head of the
    agency. The head of such agency shall carry out this section (as this
    section relates to the agency) acting through such Director.

    ``(b) Specified Agencies.--The agencies referred to in subsection
    (a) are the Centers for Disease Control and Prevention, the Health
    Resources and Services Administration, the Substance Abuse and Mental
    Health Services Administration, the Agency for Healthcare Research and
    Quality, the Food and Drug Administration, and the Centers for Medicare
    & Medicaid Services.
    ``(c) Director; Appointment.--Each Office of Minority Health
    established in an agency listed in subsection (a) shall be headed by a
    director, with documented experience and expertise in minority health
    services research and health disparities elimination.
    ``(d) 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.
    ``(e) Funding.--
    ``(1) Allocations.--Of the amounts appropriated for a
    specified agency for a fiscal year, the Secretary must designate
    an appropriate amount of funds for the purpose of carrying out
    activities under this section through the minority health office
    of the agency. In reserving an amount under the preceding

    [[Page 973]]

    sentence for a minority health office for a fiscal year, the
    Secretary shall reduce, by substantially the same percentage,
    the amount that otherwise would be available for each of the
    programs of the designated agency involved.
    ``(2) Availability of funds for staffing.--The purposes for
    which amounts made available under paragraph may be expended by
    a minority health office include the costs of employing staff
    for such office.''.
    (2) <> No new regulatory
    authority.--Nothing in this subsection and the amendments made
    by this subsection may be construed as establishing regulatory
    authority or modifying any existing regulatory authority.
    (3) <> 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 of 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 power
    or duties transferred unless such termination, reorganization,
    or transfer is approved by an Act of Congress.

    (c) Redesignation of National Center on Minority Health and Health
    Disparities.--
    (1) Redesignation.--Title IV of the Public Health Service
    Act (42 U.S.C. 281 et seq.) is amended--
    (A) by redesignating subpart 6 of part E as subpart
    20;
    (B) by transferring subpart 20, as so redesignated,
    to part C of such title IV;
    (C) by inserting subpart 20, as so redesignated,
    after subpart 19 of such part C; and
    (D) in subpart 20, as so redesignated--
    (i) by redesignating <> sections 485E through 485H as sections
    464z-3 through 464z-6, respectively;
    (ii) <> by striking
    ``National Center on Minority Health and Health
    Disparities'' each place such term appears and
    inserting ``National Institute on Minority Health
    and Health Disparities''; and
    (iii) <> by
    striking ``Center'' each place such term appears
    and inserting ``Institute''.
    (2) Purpose of institute; duties.--Section 464z-3 of the
    Public Health Service Act, as so redesignated, <> is amended--
    (A) in subsection (h)(1), by striking ``research
    endowments at centers of excellence under section 736.''
    and inserting the following: ``research endowments--
    ``(1) at centers of excellence under section 736; and
    ``(2) at centers of excellence under section 464z-4.'';
    (B) in subsection (h)(2)(A), by striking ``average''
    and inserting ``median''; and
    (C) by adding at the end the following:

    ``(h) Interagency Coordination.--The Director of the Institute, as
    the primary Federal officials with responsibility for coordinating all
    research and activities conducted or supported by the National
    Institutes of Health on minority health and health disparities, shall
    plan, coordinate, review and evaluate research and other activities
    conducted or supported by the Institutes and Centers of the National
    Institutes of Health.''.

    [[Page 974]]

    (3) Technical and conforming amendments.--
    (A) Section 401(b)(24) of the Public Health Service
    Act (42 U.S.C. 281(b)(24)) is amended by striking
    ``Center'' and inserting ``Institute''.
    (B) Subsection (d)(1) of section 903 of the Public
    Health Service Act (42 U.S.C. 299a-1(d)(1)) is amended
    by striking ``section 485E'' and inserting ``section
    464z-3''.

    SEC. 10335. TECHNICAL CORRECTION TO THE HOSPITAL VALUE-BASED PURCHASING
    PROGRAM.

    Section 1886(o)(2)A) of the Social Security Act, as added by section
    3001, <> is amended, in the first sentence, by
    inserting ``, other than measures of readmissions,'' after ``shall
    select measures''.

    SEC. 10336. GAO STUDY AND REPORT ON MEDICARE BENEFICIARY ACCESS TO HIGH-
    QUALITY DIALYSIS SERVICES.

    (a) Study.--
    (1) In general.--The Comptroller General of the United
    States shall conduct a study on the impact on Medicare
    beneficiary access to high-quality dialysis services of
    including specified oral drugs that are furnished to such
    beneficiaries for the treatment of end stage renal disease in
    the bundled prospective payment system under section 1881(b)(14)
    of the Social Security Act (42 U.S.C. 1395rr(b)(14)) (pursuant
    to the proposed rule published by the Secretary of Health and
    Human Services in the Federal Register on September 29, 2009 (74
    Fed. Reg. 49922 et seq.)). Such study shall include an analysis
    of--
    (A) the ability of providers of services and renal
    dialysis facilities to furnish specified oral drugs or
    arrange for the provision of such drugs;
    (B) the ability of providers of services and renal
    dialysis facilities to comply, if necessary, with
    applicable State laws (such as State pharmacy licensure
    requirements) in order to furnish specified oral drugs;
    (C) whether appropriate quality measures exist to
    safeguard care for Medicare beneficiaries being
    furnished specified oral drugs by providers of services
    and renal dialysis facilities; and
    (D) other areas determined appropriate by the
    Comptroller General.
    (2) Specified oral drug defined.--For purposes of paragraph
    (1), the term ``specified oral drug'' means a drug or biological
    for which there is no injectable equivalent (or other non-oral
    form of administration).

    (b) Report.--Not later than 1 year after the date of the enactment
    of this Act, the Comptroller General of the United States shall submit
    to Congress a report containing the results of the study conducted under
    subsection (a), together with recommendations for such legislation and
    administrative action as the Comptroller General determines appropriate.

    Subtitle D--Provisions Relating to Title IV

    SEC. 10401. AMENDMENTS TO SUBTITLE A.

    (a) Section 4001(h)(4) and (5) of this Act <> is amended by striking ``2010'' each place such appears and
    inserting ``2020''.

    (b) Section 4002(c) of this Act <> is
    amended--

    [[Page 975]]

    (1) by striking ``research and health screenings'' and
    inserting ``research, health screenings, and initiatives''; and
    (2) by striking ``for Preventive'' and inserting ``Regarding
    Preventive''.

    (c) Section 4004(a)(4) of this Act <> is
    amended by striking ``a Gateway'' and inserting ``an Exchange''.

    SEC. 10402. AMENDMENTS TO SUBTITLE B.

    (a) Section 399Z-1(a)(1(A) of the Public Health Service Act, as
    added by section 4101(b) of this Act, <> is
    amended by inserting ``and vision'' after ``oral''.

    (b) Section 1861(hhh)(4)(G) of the Social Security Act, as added by
    section 4103(b), <> is amended to read as follows:
    ``(G) A beneficiary shall be eligible to receive
    only an initial preventive physical examination (as
    defined under subsection (ww)(1)) during the 12-month
    period after the date that the beneficiary's coverage
    begins under part B and shall be eligible to receive
    personalized prevention plan services under this
    subsection each year thereafter provided that the
    beneficiary has not received either an initial
    preventive physical examination or personalized
    prevention plan services within the preceding 12-month
    period.''.

    SEC. 10403. AMENDMENTS TO SUBTITLE C.

    Section 4201 of this Act <> is amended--
    (1) in subsection (a), by adding before the period the
    following: ``, with not less than 20 percent of such grants
    being awarded to rural and frontier areas'';
    (2) in subsection (c)(2)(B)(vii), by striking ``both urban
    and rural areas'' and inserting ``urban, rural, and frontier
    areas''; and
    (3) in subsection (f), by striking ``each fiscal years'' and
    inserting ``each of fiscal year''.

    SEC. 10404. AMENDMENTS TO SUBTITLE D.

    Section 399MM(2) of the Public Health Service Act, as added by
    section 4303 of this Act, <> is amended by striking
    ``by ensuring'' and inserting ``and ensuring''.

    SEC. 10405. AMENDMENTS TO SUBTITLE E.

    Subtitle E of title IV of this Act is amended by striking section
    4401.

    SEC. 10406. AMENDMENT RELATING TO WAIVING COINSURANCE FOR PREVENTIVE
    SERVICES.

    Section 4104(b) of this Act is amended to read as follows:
    ``(b) Payment and Elimination of Coinsurance in All Settings.--
    Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)),
    as amended by section 4103(c)(1), is amended--
    ``(1) in subparagraph (T), by inserting `(or 100 percent if
    such services are recommended with a grade of A or B by the
    United States Preventive Services Task Force for any indication
    or population and are appropriate for the individual)' after `80
    percent';
    ``(2) in subparagraph (W)--

    [[Page 976]]

    ``(A) in clause (i), by inserting `(if such
    subparagraph were applied, by substituting ``100
    percent'' for ``80 percent'')' after `subparagraph (D)';
    and
    ``(B) in clause (ii), by striking `80 percent' and
    inserting `100 percent';
    ``(3) by striking `and' before `(X)'; and
    ``(4) by inserting before the semicolon at the end the
    following: `, and (Y) with respect to preventive services
    described in subparagraphs (A) and (B) of section 1861(ddd)(3)
    that are appropriate for the individual and, in the case of such
    services described in subparagraph (A), are recommended with a
    grade of A or B by the United States Preventive Services Task
    Force for any indication or population, the amount paid shall be
    100 percent of (i) except as provided in clause (ii), the lesser
    of the actual charge for the services or the amount determined
    under the fee schedule that applies to such services under this
    part, and (ii) in the case of such services that are covered OPD
    services (as defined in subsection (t)(1)(B)), the amount
    determined under subsection (t)'.''.

    SEC. 10407. <> BETTER DIABETES CARE.

    (a) Short Title.--This section may be cited as the ``Catalyst to
    Better Diabetes Care Act of 2009''.
    (b) National Diabetes Report Card.--
    (1) In general.--The Secretary, in collaboration with the
    Director of the Centers for Disease Control and Prevention
    (referred to in this section as the ``Director''), shall prepare
    on a biennial basis a national diabetes report card (referred to
    in this section as a ``Report Card'') and, to the extent
    possible, for each State.
    (2) Contents.--
    (A) In general.--Each Report Card shall include
    aggregate health outcomes related to individuals
    diagnosed with diabetes and prediabetes including--
    (i) preventative care practices and quality of
    care;
    (ii) risk factors; and
    (iii) outcomes.
    (B) Updated reports.--Each Report Card that is
    prepared after the initial Report Card shall include
    trend analysis for the Nation and, to the extent
    possible, for each State, for the purpose of--
    (i) tracking progress in meeting established
    national goals and objectives for improving
    diabetes care, costs, and prevalence (including
    Healthy People 2010); and
    (ii) informing policy and program development.
    (3) <> Availability.--The Secretary, in collaboration with
    the Director, shall make each Report Card publicly available,
    including by posting the Report Card on the Internet.

    (c) Improvement of Vital Statistics Collection.--
    (1) In general.--The Secretary, acting through the Director
    of the Centers for Disease Control and Prevention and in
    collaboration with appropriate agencies and States, shall--
    (A) promote the education and training of physicians
    on the importance of birth and death certificate data
    and how to properly complete these documents, including
    the

    [[Page 977]]

    collection of such data for diabetes and other chronic
    diseases;
    (B) encourage State adoption of the latest standard
    revisions of birth and death certificates; and
    (C) work with States to re-engineer their vital
    statistics systems in order to provide cost-effective,
    timely, and accurate vital systems data.
    (2) Death certificate additional language.--In carrying out
    this subsection, the Secretary may promote improvements to the
    collection of diabetes mortality data, including the addition of
    a question for the individual certifying the cause of death
    regarding whether the deceased had diabetes.

    (d) Study on Appropriate Level of Diabetes Medical Education.--
    (1) In general.--The Secretary shall, in collaboration with
    the Institute of Medicine and appropriate associations and
    councils, conduct a study of the impact of diabetes on the
    practice of medicine in the United States and the
    appropriateness of the level of diabetes medical education that
    should be required prior to licensure, board certification, and
    board recertification.
    (2) Report.--Not later than 2 years after the date of the
    enactment of this Act, the Secretary shall submit a report on
    the study under paragraph (1) to the Committees on Ways and
    Means and Energy and Commerce of the House of Representatives
    and the Committees on Finance and Health, Education, Labor, and
    Pensions of the Senate.

    (e) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary.

    SEC. 10408. GRANTS FOR SMALL BUSINESSES TO PROVIDE COMPREHENSIVE
    WORKPLACE WELLNESS PROGRAMS.

    (a) Establishment.--The Secretary shall award grants to eligible
    employers to provide their employees with access to comprehensive
    workplace wellness programs (as described under subsection (c)).
    (b) Scope.--
    (1) Duration.--The grant program established under this
    section shall be conducted for a 5-year period.
    (2) Eligible employer.-- <> The term
    ``eligible employer'' means an employer (including a non-profit
    employer) that--
    (A) employs less than 100 employees who work 25
    hours or greater per week; and
    (B) does not provide a workplace wellness program as
    of the date of enactment of this Act.

    (c) Comprehensive Workplace Wellness Programs.--
    (1) Criteria.--The Secretary shall develop program criteria
    for comprehensive workplace wellness programs under this section
    that are based on and consistent with evidence-based research
    and best practices, including research and practices as provided
    in the Guide to Community Preventive Services, the Guide to
    Clinical Preventive Services, and the National Registry for
    Effective Programs.
    (2) Requirements.--A comprehensive workplace wellness
    program shall be made available by an eligible employer to all
    employees and include the following components:

    [[Page 978]]

    (A) Health awareness initiatives (including health
    education, preventive screenings, and health risk
    assessments).
    (B) Efforts to maximize employee engagement
    (including mechanisms to encourage employee
    participation).
    (C) Initiatives to change unhealthy behaviors and
    lifestyle choices (including counseling, seminars,
    online programs, and self-help materials).
    (D) Supportive environment efforts (including
    workplace policies to encourage healthy lifestyles,
    healthy eating, increased physical activity, and
    improved mental health).

    (d) Application.--An eligible employer desiring to participate in
    the grant program under this section shall submit an application to the
    Secretary, in such manner and containing such information as the
    Secretary may require, which shall include a proposal for a
    comprehensive workplace wellness program that meet the criteria and
    requirements described under subsection (c).
    (e) Authorization of Appropriation.--For purposes of carrying out
    the grant program under this section, there is authorized to be
    appropriated $200,000,000 for the period of fiscal years 2011 through
    2015. Amounts appropriated pursuant to this subsection shall remain
    available until expended.

    SEC. 10409. <> CURES ACCELERATION NETWORK.

    (a) Short Title.--This section may be cited as the ``Cures
    Acceleration Network Act of 2009''.
    (b) Requirement for the Director of NIH To Establish a Cures
    Acceleration Network.--Section 402(b) of the Public Health Service Act
    (42 U.S.C. 282(b)) is amended--
    (1) in paragraph (22), by striking ``and'' at the end;
    (2) in paragraph (23), by striking the period and inserting
    ``; and''; and
    (3) by inserting after paragraph (23), the following:
    ``(24) implement the Cures Acceleration Network described in
    section 402C.''.

    (c) Accepting Gifts To Support the Cures Acceleration Network.--
    Section 499(c)(1) of the Public Health Service Act (42 U.S.C.
    290b(c)(1)) is amended by adding at the end the following:
    ``(E) The Cures Acceleration Network described in
    section 402C.''.

    (d) Establishment of the Cures Acceleration Network.--Part A of
    title IV of the Public Health Service Act is amended by inserting after
    section 402B (42 U.S.C. 282b) the following:

    ``SEC. 402C. <> CURES ACCELERATION NETWORK.

    ``(a) Definitions.--In this section:
    ``(1) Biological product.--The term `biological product' has
    the meaning given such term in section 351 of the Public Health
    Service Act.
    ``(2) Drug; device.--The terms `drug' and `device' have the
    meanings given such terms in section 201 of the Federal Food,
    Drug, and Cosmetic Act.
    ``(3) High need cure.--The term `high need cure' means a
    drug (as that term is defined by section 201(g)(1) of the
    Federal Food, Drug, and Cosmetic Act, biological product (as
    that term is defined by section 262(i)), or device (as that term
    is defined by section 201(h) of the Federal Food, Drug, and

    [[Page 979]]

    Cosmetic Act) that, in the determination of the Director of
    NIH--
    ``(A) is a priority to diagnose, mitigate, prevent,
    or treat harm from any disease or condition; and
    ``(B) for which the incentives of the commercial
    market are unlikely to result in its adequate or timely
    development.
    ``(4) Medical product.--The term `medical product' means a
    drug, device, biological product, or product that is a
    combination of drugs, devices, and biological products.

    ``(b) Establishment of the Cures Acceleration Network.--Subject to
    the appropriation of funds as described in subsection (g), there is
    established within the Office of the Director of NIH a program to be
    known as the Cures Acceleration Network (referred to in this section as
    `CAN'), which shall--
    ``(1) be under the direction of the Director of NIH, taking
    into account the recommendations of a CAN Review Board (referred
    to in this section as the `Board'), described in subsection (d);
    and
    ``(2) <> award grants and
    contracts to eligible entities, as described in subsection (e),
    to accelerate the development of high need cures, including
    through the development of medical products and behavioral
    therapies.

    ``(c) Functions.--The functions of the CAN are to--
    ``(1) conduct and support revolutionary advances in basic
    research, translating scientific discoveries from bench to
    bedside;
    ``(2) award grants and contracts to eligible entities to
    accelerate the development of high need cures;
    ``(3) provide the resources necessary for government
    agencies, independent investigators, research organizations,
    biotechnology companies, academic research institutions, and
    other entities to develop high need cures;
    ``(4) reduce the barriers between laboratory discoveries and
    clinical trials for new therapies; and
    ``(5) facilitate review in the Food and Drug Administration
    for the high need cures funded by the CAN, through activities
    that may include--
    ``(A) the facilitation of regular and ongoing
    communication with the Food and Drug Administration
    regarding the status of activities conducted under this
    section;
    ``(B) ensuring that such activities are coordinated
    with the approval requirements of the Food and Drug
    Administration, with the goal of expediting the
    development and approval of countermeasures and
    products; and
    ``(C) connecting interested persons with additional
    technical assistance made available under section 565 of
    the Federal Food, Drug, and Cosmetic Act.

    ``(d) CAN Board.--
    ``(1) Establishment.--There is established a Cures
    Acceleration Network Review Board (referred to in this section
    as the `Board'), which shall advise the Director of NIH on the
    conduct of the activities of the Cures Acceleration Network.
    ``(2) Membership.--
    ``(A) In general.--
    ``(i) Appointment.--The Board shall be
    comprised of 24 members who are appointed by the
    Secretary and who serve at the pleasure of the
    Secretary.

    [[Page 980]]

    ``(ii) Chairperson and vice chairperson.--The
    Secretary shall designate, from among the 24
    members appointed under clause (i), one
    Chairperson of the Board (referred to in this
    section as the `Chairperson') and one Vice
    Chairperson.
    ``(B) Terms.--
    ``(i) In general.--Each member shall be
    appointed to serve a 4-year term, except that any
    member appointed to fill a vacancy occurring prior
    to the expiration of the term for which the
    member's predecessor was appointed shall be
    appointed for the remainder of such term.
    ``(ii) Consecutive appointments; maximum
    terms.--A member may be appointed to serve not
    more than 3 terms on the Board, and may not serve
    more than 2 such terms consecutively.
    ``(C) Qualifications.--
    ``(i) In general.--The Secretary shall appoint
    individuals to the Board based solely upon the
    individual's established record of distinguished
    service in one of the areas of expertise described
    in clause (ii). Each individual appointed to the
    Board shall be of distinguished achievement and
    have a broad range of disciplinary interests.
    ``(ii) Expertise.--The Secretary shall select
    individuals based upon the following requirements:
    ``(I) For each of the fields of--
    ``(aa) basic research;
    ``(bb) medicine;
    ``(cc) biopharmaceuticals;
    ``(dd) discovery and
    delivery of medical products;
    ``(ee) bioinformatics and
    gene therapy;
    ``(ff) medical
    instrumentation; and
    ``(gg) regulatory review and
    approval of medical products,
    the Secretary shall select at least 1
    individual who is eminent in such
    fields.
    ``(II) At least 4 individuals shall
    be recognized leaders in professional
    venture capital or private equity
    organizations and have demonstrated
    experience in private equity investing.
    ``(III) At least 8 individuals shall
    represent disease advocacy
    organizations.
    ``(3) Ex-officio members.--
    ``(A) Appointment.--In addition to the 24 Board
    members described in paragraph (2), the Secretary shall
    appoint as ex-officio members of the Board--
    ``(i) a representative of the National
    Institutes of Health, recommended by the Secretary
    of the Department of Health and Human Services;
    ``(ii) a representative of the Office of the
    Assistant Secretary of Defense for Health Affairs,
    recommended by the Secretary of Defense;

    [[Page 981]]

    ``(iii) a representative of the Office of the
    Under Secretary for Health for the Veterans Health
    Administration, recommended by the Secretary of
    Veterans Affairs;
    ``(iv) a representative of the National
    Science Foundation, recommended by the Chair of
    the National Science Board; and
    ``(v) a representative of the Food and Drug
    Administration, recommended by the Commissioner of
    Food and Drugs.
    ``(B) Terms.--Each ex-officio member shall serve a
    3-year term on the Board, except that the Chairperson
    may adjust the terms of the initial ex-officio members
    in order to provide for a staggered term of appointment
    for all such members.
    ``(4) Responsibilities of the board and the director of
    nih.--
    ``(A) Responsibilities of the board.--
    ``(i) In general.-- <> The Board shall advise, and provide
    recommendations to, the Director of NIH with
    respect to--
    ``(I) policies, programs, and
    procedures for carrying out the duties
    of the Director of NIH under this
    section; and
    ``(II) significant barriers to
    successful translation of basic science
    into clinical application (including
    issues under the purview of other
    agencies and departments).
    ``(ii) Report.--In the case that the Board
    identifies a significant barrier, as described in
    clause (i)(II), the Board shall submit to the
    Secretary a report regarding such barrier.
    ``(B) Responsibilities of the director of nih.--With
    respect to each recommendation provided by the Board
    under subparagraph (A)(i), the Director of NIH shall
    respond in writing to the Board, indicating whether such
    Director will implement such recommendation. In the case
    that the Director of NIH indicates a recommendation of
    the Board will not be implemented, such Director shall
    provide an explanation of the reasons for not
    implementing such recommendation.
    ``(5) Meetings.--
    ``(A) In general.--The Board shall meet 4 times per
    calendar year, at the call of the Chairperson.
    ``(B) Quorum; requirements; limitations.--
    ``(i) Quorum.--A quorum shall consist of a
    total of 13 members of the Board, excluding ex-
    officio members, with diverse representation as
    described in clause (iii).
    ``(ii) Chairperson or vice chairperson.--Each
    meeting of the Board shall be attended by either
    the Chairperson or the Vice Chairperson.
    ``(iii) Diverse representation.--At each
    meeting of the Board, there shall be not less than
    one scientist, one representative of a disease
    advocacy organization, and one representative of a
    professional venture capital or private equity
    organization.

    [[Page 982]]

    ``(6) Compensation and travel expenses.--
    ``(A) Compensation.--Members shall receive
    compensation at a rate to be fixed by the Chairperson
    but not to exceed a rate equal to the daily equivalent
    of the annual rate of basic pay prescribed for level IV
    of the Executive Schedule under section 5315 of title 5,
    United States Code, for each day (including travel time)
    during which the member is engaged in the performance of
    the duties of the Board. All members of the Board who
    are officers or employees of the United States shall
    serve without compensation in addition to that received
    for their services as officers or employees of the
    United States.
    ``(B) Travel expenses.--Members of the Board shall
    be allowed travel expenses, including per diem in lieu
    of subsistence, at rates authorized for persons employed
    intermittently by the Federal Government under section
    5703(b) of title 5, United States Code, while away from
    their homes or regular places of business in the
    performance of services for the Board.

    ``(e) Grant Program.--
    ``(1) Supporting innovation.-- <> To carry
    out the purposes described in this section, the Director of NIH
    shall award contracts, grants, or cooperative agreements to the
    entities described in paragraph (2), to--
    ``(A) promote innovation in technologies supporting
    the advanced research and development and production of
    high need cures, including through the development of
    medical products and behavioral therapies.
    ``(B) accelerate the development of high need cures,
    including through the development of medical products,
    behavioral therapies, and biomarkers that demonstrate
    the safety or effectiveness of medical products; or
    ``(C) help the award recipient establish protocols
    that comply with Food and Drug Administration standards
    and otherwise permit the recipient to meet regulatory
    requirements at all stages of development,
    manufacturing, review, approval, and safety surveillance
    of a medical product.
    ``(2) Eligible entities.--To receive assistance under
    paragraph (1), an entity shall--
    ``(A) be a public or private entity, which may
    include a private or public research institution, an
    institution of higher education, a medical center, a
    biotechnology company, a pharmaceutical company, a
    disease advocacy organization, a patient advocacy
    organization, or an academic research institution;
    ``(B) submit an application containing--
    ``(i) a detailed description of the project
    for which the entity seeks such grant or contract;
    ``(ii) a timetable for such project;
    ``(iii) an assurance that the entity will
    submit--
    ``(I) interim reports describing the
    entity's--
    ``(aa) progress in carrying
    out the project; and
    ``(bb) compliance with all
    provisions of this section and
    conditions of receipt of such
    grant or contract; and

    [[Page 983]]

    ``(II) a final report at the
    conclusion of the grant period,
    describing the outcomes of the project;
    and
    ``(iv) a description of the protocols the
    entity will follow to comply with Food and Drug
    Administration standards and regulatory
    requirements at all stages of development,
    manufacturing, review, approval, and safety
    surveillance of a medical product; and
    ``(C) provide such additional information as the
    Director of NIH may require.
    ``(3) Awards.--
    ``(A) The cures acceleration partnership awards.--
    ``(i) Initial award amount.--Each award under
    this subparagraph shall be not more than
    $15,000,000 per project for the first fiscal year
    for which the project is funded, which shall be
    payable in one payment.
    ``(ii) Funding in subsequent fiscal years.--An
    eligible entity receiving an award under clause
    (i) may apply for additional funding for such
    project by submitting to the Director of NIH the
    information required under subparagraphs (B) and
    (C) of paragraph (2). The Director may fund a
    project of such eligible entity in an amount not
    to exceed $15,000,000 for a fiscal year subsequent
    to the initial award under clause (i).
    ``(iii) Matching funds.-- <> As a condition for receiving an award
    under this subsection, an eligible entity shall
    contribute to the project non-Federal funds in the
    amount of $1 for every $3 awarded under clauses
    (i) and (ii), except that the Director of NIH may
    waive or modify such matching requirement in any
    case where the Director determines that the goals
    and objectives of this section cannot adequately
    be carried out unless such requirement is waived.
    ``(B) The cures acceleration grant awards.--
    ``(i) Initial award amount.--Each award under
    this subparagraph shall be not more than
    $15,000,000 per project for the first fiscal year
    for which the project is funded, which shall be
    payable in one payment.
    ``(ii) Funding in subsequent fiscal years.--An
    eligible entity receiving an award under clause
    (i) may apply for additional funding for such
    project by submitting to the Board the information
    required under subparagraphs (B) and (C) of
    paragraph (2). The Director of NIH may fund a
    project of such eligible entity in an amount not
    to exceed $15,000,000 for a fiscal year subsequent
    to the initial award under clause (i).
    ``(C) The cures acceleration flexible research
    awards.-- <> If the Director of
    NIH determines that the goals and objectives of this
    section cannot adequately be carried out through a
    contract, grant, or cooperative agreement, the Director
    of NIH shall have flexible research authority to use
    other transactions to fund projects in accordance with
    the terms and conditions of this section. Awards made
    under such flexible research authority for a fiscal year
    shall not exceed 20 percent of the total funds
    appropriated under subsection (g)(1) for such fiscal
    year.

    [[Page 984]]

    ``(4) Suspension of awards for defaults, noncompliance with
    provisions and plans, and diversion of funds; repayment of
    funds.--The Director of NIH may suspend the award to any entity
    upon noncompliance by such entity with provisions and plans
    under this section or diversion of funds.
    ``(5) Audits.--The Director of NIH may enter into agreements
    with other entities to conduct periodic audits of the projects
    funded by grants or contracts awarded under this subsection.
    ``(6) Closeout procedures.--At the end of a grant or
    contract period, a recipient shall follow the closeout
    procedures under section 74.71 of title 45, Code of Federal
    Regulations (or any successor regulation).
    ``(7) Review.--A determination by the Director of NIH as to
    whether a drug, device, or biological product is a high need
    cure (for purposes of subsection (a)(3)) shall not be subject to
    judicial review.

    ``(f) Competitive Basis of Awards.--Any grant, cooperative
    agreement, or contract awarded under this section shall be awarded on a
    competitive basis.
    ``(g) Authorization of Appropriations.--
    ``(1) In general.--For purposes of carrying out this
    section, there are authorized to be appropriated $500,000,000
    for fiscal year 2010, and such sums as may be necessary for
    subsequent fiscal years. Funds appropriated under this section
    shall be available until expended.
    ``(2) Limitation on use of funds otherwise appropriated.--No
    funds appropriated under this Act, other than funds appropriated
    under paragraph (1), may be allocated to the Cures Acceleration
    Network.''.

    SEC. 10410. <> CENTERS OF EXCELLENCE FOR DEPRESSION.

    (a) Short Title.--This section may be cited as the ``Establishing a
    Network of Health-Advancing National Centers of Excellence for
    Depression Act of 2009'' or the ``ENHANCED Act of 2009''.
    (b) Centers of Excellence for Depression.--Subpart 3 of part B of
    title V of the Public Health Service Act (42 U.S.C. 290bb et seq.) is
    amended by inserting after section 520A the following:

    ``SEC. 520B. <> NATIONAL CENTERS OF EXCELLENCE
    FOR DEPRESSION.

    ``(a) Depressive Disorder Defined.--In this section, the term
    `depressive disorder' means a mental or brain disorder relating to
    depression, including major depression, bipolar disorder, and related
    mood disorders.
    ``(b) Grant Program.--
    ``(1) In general.--The Secretary, acting through the
    Administrator, shall award grants on a competitive basis to
    eligible entities to establish national centers of excellence
    for depression (referred to in this section as `Centers'), which
    shall engage in activities related to the treatment of
    depressive disorders.
    ``(2) Allocation of awards.-- <> If the
    funds authorized under subsection (f) are appropriated in the
    amounts provided for under such subsection, the Secretary shall
    allocate such amounts so that--

    [[Page 985]]

    ``(A) not later than 1 year after the date of
    enactment of the ENHANCED Act of 2009, not more than 20
    Centers may be established; and
    ``(B) not later than September 30, 2016, not more
    than 30 Centers may be established.
    ``(3) Grant period.--
    ``(A) In general.--A grant awarded under this
    section shall be for a period of 5 years.
    ``(B) Renewal.--A grant awarded under subparagraph
    (A) may be renewed, on a competitive basis, for 1
    additional 5-year period, at the discretion of the
    Secretary. In determining whether to renew a grant, the
    Secretary shall consider the report cards issued under
    subsection (e)(2).
    ``(4) Use of funds.--Grant funds awarded under this
    subsection shall be used for the establishment and ongoing
    activities of the recipient of such funds.
    ``(5) Eligible entities.--
    ``(A) Requirements.--To be eligible to receive a
    grant under this section, an entity shall--
    ``(i) be an institution of higher education or
    a public or private nonprofit research
    institution; and
    ``(ii) submit an application to the Secretary
    at such time and in such manner as the Secretary
    may require, as described in subparagraph (B).
    ``(B) Application.--An application described in
    subparagraph (A)(ii) shall include--
    ``(i) evidence that such entity--
    ``(I) provides, or is capable of
    coordinating with other entities to
    provide, comprehensive health services
    with a focus on mental health services
    and subspecialty expertise for
    depressive disorders;
    ``(II) collaborates with other
    mental health providers, as necessary,
    to address co-occurring mental
    illnesses;
    ``(III) is capable of training
    health professionals about mental
    health; and
    ``(ii) such other information, as the
    Secretary may require.
    ``(C) Priorities.--In awarding grants under this
    section, the Secretary shall give priority to eligible
    entities that meet 1 or more of the following criteria:
    ``(i) Demonstrated capacity and expertise to
    serve the targeted population.
    ``(ii) Existing infrastructure or expertise to
    provide appropriate, evidence-based and culturally
    and linguistically competent services.
    ``(iii) A location in a geographic area with
    disproportionate numbers of underserved and at-
    risk populations in medically underserved areas
    and health professional shortage areas.
    ``(iv) Proposed innovative approaches for
    outreach to initiate or expand services.
    ``(v) Use of the most up-to-date science,
    practices, and interventions available.
    ``(vi) Demonstrated capacity to establish
    cooperative and collaborative agreements with
    community mental health centers and other
    community entities

    [[Page 986]]

    to provide mental health, social, and human
    services to individuals with depressive disorders.
    ``(6) National coordinating center.--
    ``(A) In general.-- <> The
    Secretary, acting through the Administrator, shall
    designate 1 recipient of a grant under this section to
    be the coordinating center of excellence for depression
    (referred to in this section as the `coordinating
    center'). The Secretary shall select such coordinating
    center on a competitive basis, based upon the
    demonstrated capacity of such center to perform the
    duties described in subparagraph (C).
    ``(B) Application.--A Center that has been awarded a
    grant under paragraph (1) may apply for designation as
    the coordinating center by submitting an application to
    the Secretary at such time, in such manner, and
    containing such information as the Secretary may
    require.
    ``(C) Duties.--The coordinating center shall--
    ``(i) develop, administer, and coordinate the
    network of Centers under this section;
    ``(ii) oversee and coordinate the national
    database described in subsection (d);
    ``(iii) lead a strategy to disseminate the
    findings and activities of the Centers through
    such database; and
    ``(iv) serve as a liaison with the
    Administration, the National Registry of Evidence-
    based Programs and Practices of the
    Administration, and any Federal interagency or
    interagency forum on mental health.
    ``(7) Matching funds.--The Secretary may not award a grant
    or contract under this section to an entity unless the entity
    agrees that it will make available (directly or through
    contributions from other public or private entities) non-Federal
    contributions toward the activities to be carried out under the
    grant or contract in an amount equal to $1 for each $5 of
    Federal funds provided under the grant or contract. Such non-
    Federal matching funds may be provided directly or through
    donations from public or private entities and may be in cash or
    in-kind, fairly evaluated, including plant, equipment, or
    services.

    ``(c) Activities of the Centers.--Each Center shall carry out the
    following activities:
    ``(1) General activities.--Each Center shall--
    ``(A) integrate basic, clinical, or health services
    interdisciplinary research and practice in the
    development, implementation, and dissemination of
    evidence-based interventions;
    ``(B) involve a broad cross-section of stakeholders,
    such as researchers, clinicians, consumers, families of
    consumers, and voluntary health organizations, to
    develop a research agenda and disseminate findings, and
    to provide support in the implementation of evidence-
    based practices;
    ``(C) provide training and technical assistance to
    mental health professionals, and engage in and
    disseminate translational research with a focus on
    meeting the needs of individuals with depressive
    disorders; and

    [[Page 987]]

    ``(D) educate policy makers, employers, community
    leaders, and the public about depressive disorders to
    reduce stigma and raise awareness of treatments.
    ``(2) Improved treatment standards, clinical guidelines,
    diagnostic protocols, and care coordination practice.--Each
    Center shall collaborate with other Centers in the network to--
    ``(A) develop and implement treatment standards,
    clinical guidelines, and protocols that emphasize
    primary prevention, early intervention, treatment for,
    and recovery from, depressive disorders;
    ``(B) foster communication with other providers
    attending to co-occurring physical health conditions
    such as cardiovascular, diabetes, cancer, and substance
    abuse disorders;
    ``(C) leverage available community resources,
    develop and implement improved self-management programs,
    and, when appropriate, involve family and other
    providers of social support in the development and
    implementation of care plans; and
    ``(D) use electronic health records and telehealth
    technology to better coordinate and manage, and improve
    access to, care, as determined by the coordinating
    center.
    ``(3) Translational research through collaboration of
    centers and community-based organizations.--Each Center shall--
    ``(A) demonstrate effective use of a public-private
    partnership to foster collaborations among members of
    the network and community-based organizations such as
    community mental health centers and other social and
    human services providers;
    ``(B) expand interdisciplinary, translational, and
    patient-oriented research and treatment; and
    ``(C) coordinate with accredited academic programs
    to provide ongoing opportunities for the professional
    and continuing education of mental health providers.

    ``(d) National Database.--
    ``(1) In general.--The coordinating center shall establish
    and maintain a national, publicly available database to improve
    prevention programs, evidence-based interventions, and disease
    management programs for depressive disorders, using data
    collected from the Centers, as described in paragraph (2).
    ``(2) Data collection.--Each Center shall submit data
    gathered at such center, as appropriate, to the coordinating
    center regarding--
    ``(A) the prevalence and incidence of depressive
    disorders;
    ``(B) the health and social outcomes of individuals
    with depressive disorders;
    ``(C) the effectiveness of interventions designed,
    tested, and evaluated;
    ``(D) other information, as the Secretary may
    require.
    ``(3) Submission of data to the administrator.--The
    coordinating center shall submit to the Administrator the data
    and financial information gathered under paragraph (2).
    ``(4) Publication using data from the database.--A Center,
    or an individual affiliated with a Center, may publish

    [[Page 988]]

    findings using the data described in paragraph (2) only if such
    center submits such data to the coordinating center, as required
    under such paragraph.

    ``(e) Establishment of Standards; Report Cards and Recommendations;
    Third Party Review.--
    ``(1) Establishment of standards.--The Secretary, acting
    through the Administrator, shall establish performance standards
    for--
    ``(A) each Center; and
    ``(B) the network of Centers as a whole.
    ``(2) Report cards.--The Secretary, acting through the
    Administrator, shall--
    ``(A) for each Center, not later than 3 years after
    the date on which such center of excellence is
    established and annually thereafter, issue a report card
    to the coordinating center to rate the performance of
    such Center; and
    ``(B) not later than 3 years after the date on which
    the first grant is awarded under subsection (b)(1) and
    annually thereafter, issue a report card to Congress to
    rate the performance of the network of centers of
    excellence as a whole.
    ``(3) Recommendations.--Based upon the report cards
    described in paragraph (2), the Secretary shall, not later than
    September 30, 2015--
    ``(A) make recommendations to the Centers regarding
    improvements such centers shall make; and
    ``(B) make recommendations to Congress for expanding
    the Centers to serve individuals with other types of
    mental disorders.
    ``(4) Third party review.--Not later than 3 years after the
    date on which the first grant is awarded under subsection (b)(1)
    and annually thereafter, the Secretary shall arrange for an
    independent third party to conduct an evaluation of the network
    of Centers to ensure that such centers are meeting the goals of
    this section.

    ``(f) Authorization of Appropriations.--
    ``(1) In general.--To carry out this section, there are
    authorized to be appropriated--
    ``(A) $100,000,000 for each of the fiscal years 2011
    through 2015; and
    ``(B) $150,000,000 for each of the fiscal years 2016
    through 2020.
    ``(2) Allocation of funds authorized.--
    <> Of the amount appropriated under
    paragraph (1) for a fiscal year, the Secretary shall determine
    the allocation of each Center receiving a grant under this
    section, but in no case may the allocation be more than
    $5,000,000, except that the Secretary may allocate not more than
    $10,000,000 to the coordinating center.''.

    SEC. 10411. <> PROGRAMS RELATING TO CONGENITAL HEART DISEASE.

    (a) Short Title.--This subtitle may be cited as the ``Congenital
    Heart Futures Act''.
    (b) Programs Relating to Congenital Heart Disease.--
    (1) National congenital heart disease surveillance system.--
    Part P of title III of the Public Health Service Act (42 U.S.C.
    280g et seq.), as amended by section 5405, is further amended by
    adding at the end the following:

    [[Page 989]]

    ``SEC. 399V-2. <> NATIONAL CONGENITAL HEART
    DISEASE SURVEILLANCE SYSTEM.

    ``(a) In General.--The Secretary, acting through the Director of the
    Centers for Disease Control and Prevention, may--
    ``(1) enhance and expand infrastructure to track the
    epidemiology of congenital heart disease and to organize such
    information into a nationally-representative, population-based
    surveillance system that compiles data concerning actual
    occurrences of congenital heart disease, to be known as the
    `National Congenital Heart Disease Surveillance System'; or
    ``(2) award a grant to one eligible entity to undertake the
    activities described in paragraph (1).

    ``(b) Purpose.--The purpose of the Congenital Heart Disease
    Surveillance System shall be to facilitate further research into the
    types of health services patients use and to identify possible areas for
    educational outreach and prevention in accordance with standard
    practices of the Centers for Disease Control and Prevention.
    ``(c) Content.--The Congenital Heart Disease Surveillance System--
    ``(1) may include information concerning the incidence and
    prevalence of congenital heart disease in the United States;
    ``(2) may be used to collect and store data on congenital
    heart disease, including data concerning--
    ``(A) demographic factors associated with congenital
    heart disease, such as age, race, ethnicity, sex, and
    family history of individuals who are diagnosed with the
    disease;
    ``(B) risk factors associated with the disease;
    ``(C) causation of the disease;
    ``(D) treatment approaches; and
    ``(E) outcome measures, such that analysis of the
    outcome measures will allow derivation of evidence-based
    best practices and guidelines for congenital heart
    disease patients; and
    ``(3) may ensure the collection and analysis of longitudinal
    data related to individuals of all ages with congenital heart
    disease, including infants, young children, adolescents, and
    adults of all ages.

    ``(d) Public Access.--The Congenital Heart Disease Surveillance
    System shall be made available to the public, as appropriate, including
    congenital heart disease researchers.
    ``(e) Patient Privacy.--The Secretary shall ensure that the
    Congenital Heart Disease Surveillance System is maintained in a manner
    that complies with the regulations promulgated under section 264 of the
    Health Insurance Portability and Accountability Act of 1996.
    ``(f) Eligibility for Grant.--To be eligible to receive a grant
    under subsection (a)(2), an entity shall--
    ``(1) be a public or private nonprofit entity with
    specialized experience in congenital heart disease; and
    ``(2) submit to the Secretary an application at such time,
    in such manner, and containing such information as the Secretary
    may require.''.
    (2) Congenital heart disease research.--Subpart 2 of part C
    of title IV of the Public Health Service Act (42 U.S.C. 285b et
    seq.) is amended by adding at the end the following:

    [[Page 990]]

    ``SEC. 425. <> CONGENITAL HEART DISEASE.

    ``(a) In General.--The Director of the Institute may expand,
    intensify, and coordinate research and related activities of the
    Institute with respect to congenital heart disease, which may include
    congenital heart disease research with respect to--
    ``(1) causation of congenital heart disease, including
    genetic causes;
    ``(2) long-term outcomes in individuals with congenital
    heart disease, including infants, children, teenagers, adults,
    and elderly individuals;
    ``(3) diagnosis, treatment, and prevention;
    ``(4) studies using longitudinal data and retrospective
    analysis to identify effective treatments and outcomes for
    individuals with congenital heart disease; and
    ``(5) identifying barriers to life-long care for individuals
    with congenital heart disease.

    ``(b) Coordination of Research Activities.--The Director of the
    Institute may coordinate research efforts related to congenital heart
    disease among multiple research institutions and may develop research
    networks.
    ``(c) Minority and Medically Underserved Communities.--In carrying
    out the activities described in this section, the Director of the
    Institute shall consider the application of such research and other
    activities to minority and medically underserved communities.''.
    (c) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out the amendments made by this section such sums
    as may be necessary for each of fiscal years 2011 through 2015.

    SEC. 10412. AUTOMATED DEFIBRILLATION IN ADAM'S MEMORY ACT.

    Section 312 of the Public Health Service Act (42 U.S.C. 244) is
    amended--
    (1) in subsection (c)(6), after ``clearinghouse'' insert ``,
    that shall be administered by an organization that has
    substantial expertise in pediatric education, pediatric
    medicine, and electrophysiology and sudden death,''; and
    (2) in the first sentence of subsection (e), by striking
    ``fiscal year 2003'' and all that follows through ``2006'' and
    inserting ``for each of fiscal years 2003 through 2014''.

    SEC. 10413. <> YOUNG WOMEN'S BREAST HEALTH AWARENESS AND SUPPORT OF
    YOUNG WOMEN DIAGNOSED WITH BREAST CANCER.

    (a) Short Title.--This section may be cited as the ``Young Women's
    Breast Health Education and Awareness Requires Learning Young Act of
    2009'' or the ``EARLY Act''.
    (b) Amendment.--Title III of the Public Health Service Act (42
    U.S.C. 241 et seq.), as amended by this Act, is further amended by
    adding at the end the following:

    [[Page 991]]

    ``PART V--PROGRAMS RELATING TO BREAST HEALTH AND CANCER

    ``SEC. 399NN. <> YOUNG WOMEN'S BREAST HEALTH
    AWARENESS AND SUPPORT OF YOUNG WOMEN DIAGNOSED WITH BREAST
    CANCER.

    ``(a) Public Education Campaign.--
    ``(1) In general.--The Secretary, acting through the
    Director of the Centers for Disease Control and Prevention,
    shall conduct a national evidence-based education campaign to
    increase awareness of young women's knowledge regarding--
    ``(A) breast health in young women of all racial,
    ethnic, and cultural backgrounds;
    ``(B) breast awareness and good breast health
    habits;
    ``(C) the occurrence of breast cancer and the
    general and specific risk factors in women who may be at
    high risk for breast cancer based on familial, racial,
    ethnic, and cultural backgrounds such as Ashkenazi
    Jewish populations;
    ``(D) evidence-based information that would
    encourage young women and their health care professional
    to increase early detection of breast cancers; and
    ``(E) the availability of health information and
    other resources for young women diagnosed with breast
    cancer.
    ``(2) Evidence-based, age appropriate messages.--The
    campaign shall provide evidence-based, age-appropriate messages
    and materials as developed by the Centers for Disease Control
    and Prevention and the Advisory Committee established under
    paragraph (4).
    ``(3) Media campaign.-- <> In conducting the
    education campaign under paragraph (1), the Secretary shall
    award grants to entities to establish national multimedia
    campaigns oriented to young women that may include advertising
    through television, radio, print media, billboards, posters, all
    forms of existing and especially emerging social networking
    media, other Internet media, and any other medium determined
    appropriate by the Secretary.
    ``(4) Advisory committee.--
    ``(A) Establishment.-- <> Not later
    than 60 days after the date of the enactment of this
    section, the Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall
    establish an advisory committee to assist in creating
    and conducting the education campaigns under paragraph
    (1) and subsection (b)(1).
    ``(B) Membership.-- <> The
    Secretary, acting through the Director of the Centers
    for Disease Control and Prevention, shall appoint to the
    advisory committee under subparagraph (A) such members
    as deemed necessary to properly advise the Secretary,
    and shall include organizations and individuals with
    expertise in breast cancer, disease prevention, early
    detection, diagnosis, public health, social marketing,
    genetic screening and counseling, treatment,
    rehabilitation, palliative care, and survivorship in
    young women.

    ``(b) Health Care Professional Education Campaign.--The Secretary,
    acting through the Director of the Centers for Disease

    [[Page 992]]

    Control and Prevention, and in consultation with the Administrator of
    the Health Resources and Services Administration, shall conduct an
    education campaign among physicians and other health care professionals
    to increase awareness--
    ``(1) of breast health, symptoms, and early diagnosis and
    treatment of breast cancer in young women, including specific
    risk factors such as family history of cancer and women that may
    be at high risk for breast cancer, such as Ashkenazi Jewish
    population;
    ``(2) on how to provide counseling to young women about
    their breast health, including knowledge of their family cancer
    history and importance of providing regular clinical breast
    examinations;
    ``(3) concerning the importance of discussing healthy
    behaviors, and increasing awareness of services and programs
    available to address overall health and wellness, and making
    patient referrals to address tobacco cessation, good nutrition,
    and physical activity;
    ``(4) on when to refer patients to a health care provider
    with genetics expertise;
    ``(5) on how to provide counseling that addresses long-term
    survivorship and health concerns of young women diagnosed with
    breast cancer; and
    ``(6) on when to provide referrals to organizations and
    institutions that provide credible health information and
    substantive assistance and support to young women diagnosed with
    breast cancer.

    ``(c) Prevention Research Activities.--The Secretary, acting
    through--
    ``(1) the Director of the Centers for Disease Control and
    Prevention, shall conduct prevention research on breast cancer
    in younger women, including--
    ``(A) behavioral, survivorship studies, and other
    research on the impact of breast cancer diagnosis on
    young women;
    ``(B) formative research to assist with the
    development of educational messages and information for
    the public, targeted populations, and their families
    about breast health, breast cancer, and healthy
    lifestyles;
    ``(C) testing and evaluating existing and new social
    marketing strategies targeted at young women; and
    ``(D) surveys of health care providers and the
    public regarding knowledge, attitudes, and practices
    related to breast health and breast cancer prevention
    and control in high-risk populations; and
    ``(2) the Director of the National Institutes of Health,
    shall conduct research to develop and validate new screening
    tests and methods for prevention and early detection of breast
    cancer in young women.

    ``(d) Support for Young Women Diagnosed With Breast Cancer.--
    ``(1) In general.-- <> The Secretary shall
    award grants to organizations and institutions to provide health
    information from credible sources and substantive assistance
    directed to young women diagnosed with breast cancer and pre-
    neoplastic breast diseases.

    [[Page 993]]

    ``(2) Priority.--In making grants under paragraph (1), the
    Secretary shall give priority to applicants that deal
    specifically with young women diagnosed with breast cancer and
    pre-neoplastic breast disease.

    ``(e) No Duplication of Effort.--In conducting an education campaign
    or other program under subsections (a), (b), (c), or (d), the Secretary
    shall avoid duplicating other existing Federal breast cancer education
    efforts.
    ``(f) Measurement; Reporting.--The Secretary, acting through the
    Director of the Centers for Disease Control and Prevention, shall--
    ``(1) measure--
    ``(A) young women's awareness regarding breast
    health, including knowledge of family cancer history,
    specific risk factors and early warning signs, and young
    women's proactive efforts at early detection;
    ``(B) the number or percentage of young women
    utilizing information regarding lifestyle interventions
    that foster healthy behaviors;
    ``(C) the number or percentage of young women
    receiving regular clinical breast exams; and
    ``(D) the number or percentage of young women who
    perform breast self exams, and the frequency of such
    exams, before the implementation of this section;
    ``(2) not less than every 3 years, measure the impact of
    such activities; and
    ``(3) submit reports to the Congress on the results of such
    measurements.

    ``(g) Definition.--In this section, the term `young women' means
    women 15 to 44 years of age.
    ``(h) Authorization of Appropriations.--To carry out subsections
    (a), (b), (c)(1), and (d), there are authorized to be appropriated
    $9,000,000 for each of the fiscal years 2010 through 2014.''.

    Subtitle E--Provisions Relating to Title V

    SEC. 10501. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT, THE SOCIAL
    SECURITY ACT, AND TITLE V OF THIS ACT.

    (a) Section 5101 of this Act <> is amended--
    (1) in subsection (c)(2)(B)(i)(II), by inserting ``,
    including representatives of small business and self-employed
    individuals'' after ``employers'';
    (2) in subsection (d)(4)(A)--
    (A) by redesignating clause (iv) as clause (v); and
    (B) by inserting after clause (iii) the following:
    ``(iv) An analysis of, and recommendations
    for, eliminating the barriers to entering and
    staying in primary care, including provider
    compensation.''; and
    (3) in subsection (i)(2)(B), by inserting ``optometrists,
    ophthalmologists,'' after ``occupational therapists,''.

    (b) Subtitle B of title V of this Act is amended by adding at the
    end the following:

    [[Page 994]]

    ``SEC. 5104. INTERAGENCY TASK FORCE TO ASSESS AND IMPROVE ACCESS TO
    HEALTH CARE IN THE STATE OF ALASKA.

    ``(a) Establishment.--There is established a task force to be known
    as the `Interagency Access to Health Care in Alaska Task Force'
    (referred to in this section as the `Task Force').
    ``(b) Duties.--The Task Force shall--
    ``(1) assess access to health care for beneficiaries of
    Federal health care systems in Alaska; and
    ``(2) develop a strategy for the Federal Government to
    improve delivery of health care to Federal beneficiaries in the
    State of Alaska.

    ``(c) Membership.-- <> The Task Force shall be
    comprised of Federal members who shall be appointed, not later than 45
    days after the date of enactment of this Act, as follows:
    ``(1) The Secretary of Health and Human Services shall
    appoint one representative of each of the following:
    ``(A) The Department of Health and Human Services.
    ``(B) The Centers for Medicare and Medicaid
    Services.
    ``(C) The Indian Health Service.
    ``(2) The Secretary of Defense shall appoint one
    representative of the TRICARE Management Activity.
    ``(3) The Secretary of the Army shall appoint one
    representative of the Army Medical Department.
    ``(4) The Secretary of the Air Force shall appoint one
    representative of the Air Force, from among officers at the Air
    Force performing medical service functions.
    ``(5) The Secretary of Veterans Affairs shall appoint one
    representative of each of the following:
    ``(A) The Department of Veterans Affairs.
    ``(B) The Veterans Health Administration.
    ``(6) The Secretary of Homeland Security shall appoint one
    representative of the United States Coast Guard.

    ``(d) Chairperson.--One chairperson of the Task Force shall be
    appointed by the Secretary at the time of appointment of members under
    subsection (c), selected from among the members appointed under
    paragraph (1).
    ``(e) Meetings.--The Task Force shall meet at the call of the
    chairperson.
    ``(f) Report.--Not later than 180 days after the date of enactment
    of this Act, the Task Force shall submit to Congress a report detailing
    the activities of the Task Force and containing the findings,
    strategies, recommendations, policies, and initiatives developed
    pursuant to the duty described in subsection (b)(2). In preparing such
    report, the Task Force shall consider completed and ongoing efforts by
    Federal agencies to improve access to health care in the State of
    Alaska.
    ``(g) Termination.--The Task Force shall be terminated on the date
    of submission of the report described in subsection (f).''.
    (c) Section 399V of the Public Health Service Act, as added by
    section 5313, <> is amended--
    (1) in subsection (b)(4), by striking ``identify, educate,
    refer, and enroll'' and inserting ``identify and refer''; and
    (2) in subsection (k)(1), by striking ``, as defined by the
    Department of Labor as Standard Occupational Classification [21-
    1094]''.

    [[Page 995]]

    (d) Section 738(a)(3) of the Public Health Service Act (42 U.S.C.
    293b(a)(3)) is amended by inserting ``schools offering physician
    assistant education programs,'' after ``public health,''.
    (e) Subtitle D of title V of this Act is amended by adding at the
    end the following:

    ``SEC. 5316. <> DEMONSTRATION GRANTS FOR FAMILY
    NURSE PRACTITIONER TRAINING PROGRAMS.

    ``(a) Establishment of Program.--The Secretary of Health and Human
    Services (referred to in this section as the `Secretary') shall
    establish a training demonstration program for family nurse
    practitioners (referred to in this section as the `program') to employ
    and provide 1-year training for nurse practitioners who have graduated
    from a nurse practitioner program for careers as primary care providers
    in Federally qualified health centers (referred to in this section as
    `FQHCs') and nurse-managed health clinics (referred to in this section
    as `NMHCs').
    ``(b) Purpose.--The purpose of the program is to enable each grant
    recipient to--
    ``(1) provide new nurse practitioners with clinical training
    to enable them to serve as primary care providers in FQHCs and
    NMHCs;
    ``(2) train new nurse practitioners to work under a model of
    primary care that is consistent with the principles set forth by
    the Institute of Medicine and the needs of vulnerable
    populations; and
    ``(3) create a model of FQHC and NMHC training for nurse
    practitioners that may be replicated nationwide.

    ``(c) Grants.--The Secretary shall award 3-year grants to eligible
    entities that meet the requirements established by the Secretary, for
    the purpose of operating the nurse practitioner primary care programs
    described in subsection (a) in such entities.
    ``(d) Eligible Entities.--To be eligible to receive a grant under
    this section, an entity shall--
    ``(1)(A) be a FQHC as defined in section 1861(aa) of the
    Social Security Act (42 U.S.C. 1395x(aa)); or
    ``(B) be a nurse-managed health clinic, as defined in
    section 330A-1 of the Public Health Service Act (as added by
    section 5208 of this Act); and
    ``(2) submit to the Secretary an application at such time,
    in such manner, and containing such information as the Secretary
    may require.

    ``(e) Priority in Awarding Grants.--In awarding grants under this
    section, the Secretary shall give priority to eligible entities that--
    ``(1) demonstrate sufficient infrastructure in size, scope,
    and capacity to undertake the requisite training of a minimum of
    3 nurse practitioners per year, and to provide to each awardee
    12 full months of full-time, paid employment and benefits
    consistent with the benefits offered to other full-time
    employees of such entity;
    ``(2) will assign not less than 1 staff nurse practitioner
    or physician to each of 4 precepted clinics;
    ``(3) will provide to each awardee specialty rotations,
    including specialty training in prenatal care and women's
    health, adult and child psychiatry, orthopedics, geriatrics, and
    at least 3 other high-volume, high-burden specialty areas;

    [[Page 996]]

    ``(4) provide sessions on high-volume, high-risk health
    problems and have a record of training health care professionals
    in the care of children, older adults, and underserved
    populations; and
    ``(5) collaborate with other safety net providers, schools,
    colleges, and universities that provide health professions
    training.

    ``(f) Eligibility of Nurse Practitioners.--
    ``(1) In general.--To be eligible for acceptance to a
    program funded through a grant awarded under this section, an
    individual shall--
    ``(A) be licensed or eligible for licensure in the
    State in which the program is located as an advanced
    practice registered nurse or advanced practice nurse and
    be eligible or board-certified as a family nurse
    practitioner; and
    ``(B) demonstrate commitment to a career as a
    primary care provider in a FQHC or in a NMHC.
    ``(2) Preference.--In selecting awardees under the program,
    each grant recipient shall give preference to bilingual
    candidates that meet the requirements described in paragraph
    (1).
    ``(3) Deferral of certain service.--The starting date of
    required service of individuals in the National Health Service
    Corps Service program under title II of the Public Health
    Service Act (42 U.S.C. 202 et seq.) who receive training under
    this section shall be deferred until the date that is 22 days
    after the date of completion of the program.

    ``(g) Grant Amount.--Each grant awarded under this section shall be
    in an amount not to exceed $600,000 per year. A grant recipient may
    carry over funds from 1 fiscal year to another without obtaining
    approval from the Secretary.
    ``(h) Technical Assistance Grants.--The Secretary may award
    technical assistance grants to 1 or more FQHCs or NMHCs that have
    demonstrated expertise in establishing a nurse practitioner residency
    training program. Such technical assistance grants shall be for the
    purpose of providing technical assistance to other recipients of grants
    under subsection (c).
    ``(i) Authorization of Appropriations.--To carry out this section,
    there is authorized to be appropriated such sums as may be necessary for
    each of fiscal years 2011 through 2014.''.
    (f)(1) Section 399W of the Public Health Service Act, as added by
    section 5405, <> is redesignated as section 399V-
    1.

    (2) Section 399V-1 of the Public Health Service Act, as so
    redesignated, is amended in subsection (b)(2)(A) by striking ``and the
    departments of 1 or more health professions schools in the State that
    train providers in primary care'' and inserting ``and the departments
    that train providers in primary care in 1 or more health professions
    schools in the State''.
    (3) Section 934 of the Public Health Service Act, as added by
    section 3501, <> is amended by striking ``399W''
    each place such term appears and inserting ``399V-1''.

    (4) Section 935(b) of the Public Health Service Act, as added by
    section 3503, <> is amended by striking ``399W''
    and inserting ``399V-1''.

    (g) Part P of title III of the Public Health Service Act 42 U.S.C.
    280g et seq.), as amended by section 10411, is amended by adding at the
    end the following:

    [[Page 997]]

    ``SEC. 399V-3. <> NATIONAL DIABETES PREVENTION
    PROGRAM.

    ``(a) In General.--The Secretary, acting through the Director of the
    Centers for Disease Control and Prevention, shall establish a national
    diabetes prevention program (referred to in this section as the
    `program') targeted at adults at high risk for diabetes in order to
    eliminate the preventable burden of diabetes.
    ``(b) Program Activities.--The program described in subsection (a)
    shall include--
    ``(1) a grant program for community-based diabetes
    prevention program model sites;
    ``(2) a program within the Centers for Disease Control and
    Prevention to determine eligibility of entities to deliver
    community-based diabetes prevention services;
    ``(3) a training and outreach program for lifestyle
    intervention instructors; and
    ``(4) evaluation, monitoring and technical assistance, and
    applied research carried out by the Centers for Disease Control
    and Prevention.

    ``(c) Eligible Entities.--To be eligible for a grant under
    subsection (b)(1), an entity shall be a State or local health
    department, a tribal organization, a national network of community-based
    non-profits focused on health and wellbeing, an academic institution, or
    other entity, as the Secretary determines.
    ``(d) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated such sums as
    may be necessary for each of fiscal years 2010 through 2014.''.
    (h) The provisions of, and amendment made by, section 5501(c) of
    this Act <> are repealed.

    (i)(1) The provisions of, and amendments made by, section 5502 of
    this Act <> are
    repealed.

    (2)(A) Section 1861(aa)(3)(A) of the Social Security Act (42 U.S.C.
    1395w(aa)(3)(A)) is amended to read as follows:
    ``(A) services of the type described in subparagraphs (A)
    through (C) of paragraph (1) and preventive services (as defined
    in section 1861(ddd)(3)); and''.

    (B) <> The amendment made
    by subparagraph (A) shall apply to services furnished on or after
    January 1, 2011.

    (3)(A) Section 1834 of the Social Security Act (42 U.S.C. 1395m), as
    amended by section 4105, is amended by adding at the end the following
    new subsection:
    ``(o) Development and Implementation of Prospective Payment
    System.--
    ``(1) Development.--
    ``(A) In general.--The Secretary shall develop a
    prospective payment system for payment for Federally
    qualified health center services furnished by Federally
    qualified health centers under this title. Such system
    shall include a process for appropriately describing the
    services furnished by Federally qualified health centers
    and shall establish payment rates for specific payment
    codes based on such appropriate descriptions of
    services. Such system shall be established to take into
    account the type, intensity, and duration of services
    furnished by Federally qualified health centers. Such
    system may include adjustments, including geographic
    adjustments, determined appropriate by the Secretary.

    [[Page 998]]

    ``(B) Collection of data and evaluation.--
    <> By not later than January 1, 2011,
    the Secretary shall require Federally qualified health
    centers to submit to the Secretary such information as
    the Secretary may require in order to develop and
    implement the prospective payment system under this
    subsection, including the reporting of services using
    HCPCS codes.
    ``(2) Implementation.--
    ``(A) In general.--Notwithstanding section
    1833(a)(3)(A), the Secretary shall provide, for cost
    reporting periods beginning on or after October 1, 2014,
    for payments of prospective payment rates for Federally
    qualified health center services furnished by Federally
    qualified health centers under this title in accordance
    with the prospective payment system developed by the
    Secretary under paragraph (1).
    ``(B) Payments.--
    ``(i) Initial payments.--The Secretary shall
    implement such prospective payment system so that
    the estimated aggregate amount of prospective
    payment rates (determined prior to the application
    of section 1833(a)(1)(Z)) under this title for
    Federally qualified health center services in the
    first year that such system is implemented is
    equal to 100 percent of the estimated amount of
    reasonable costs (determined without the
    application of a per visit payment limit or
    productivity screen and prior to the application
    of section 1866(a)(2)(A)(ii)) that would have
    occurred for such services under this title in
    such year if the system had not been implemented.
    ``(ii) Payments in subsequent years.--Payment
    rates in years after the year of implementation of
    such system shall be the payment rates in the
    previous year increased--
    ``(I) in the first year after
    implementation of such system, by the
    percentage increase in the MEI (as
    defined in section 1842(i)(3)) for the
    year involved; and
    ``(II) in subsequent years, by the
    percentage increase in a market basket
    of Federally qualified health center
    goods and services as promulgated
    through regulations, or if such an index
    is not available, by the percentage
    increase in the MEI (as defined in
    section 1842(i)(3)) for the year
    involved.
    ``(C) Preparation for pps implementation.--
    Notwithstanding any other provision of law, the
    Secretary may establish and implement by program
    instruction or otherwise the payment codes to be used
    under the prospective payment system under this
    section.''.

    (B) Section 1833(a)(1) of the Social Security Act (42 U.S.C.
    1395l(a)(1)), as amended by section 4104, is amended--
    (i) by striking ``and'' before ``(Y)''; and
    (ii) by inserting before the semicolon at the end the
    following: ``, and (Z) with respect to Federally qualified
    health center services for which payment is made under section
    1834(o), the amounts paid shall be 80 percent of the lesser

    [[Page 999]]

    of the actual charge or the amount determined under such
    section''.

    (C) Section 1833(a) of the Social Security Act (42 U.S.C. 1395l(a))
    is amended--
    (i) in paragraph (3)(B)(i)--
    (I) by inserting ``(I)'' after ``otherwise been
    provided''; and
    (II) by inserting ``, or (II) in the case of such
    services furnished on or after the implementation date
    of the prospective payment system under section 1834(o),
    under such section (calculated as if `100 percent' were
    substituted for `80 percent' in such section) for such
    services if the individual had not been so enrolled''
    after ``been so enrolled''; and
    (ii) by adding at the end the following flush sentence:
    ``Paragraph (3)(A) shall not apply to Federally qualified health
    center services furnished on or after the implementation date of
    the prospective payment system under section 1834(0).''.

    (j) Section 5505 <> is amended by adding
    at the end the following new subsection:

    ``(d) Application.--The amendments made by this section shall not be
    applied in a manner that requires reopening of any settled cost reports
    as to which there is not a jurisdictionally proper appeal pending as of
    the date of the enactment of this Act on the issue of payment for
    indirect costs of medical education under section 1886(d)(5)(B) of the
    Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct graduate
    medical education costs under section 1886(h) of such Act (42 U.S.C.
    1395ww(h)).''.
    (k) Subtitle G of title V of this Act is amended by adding at the
    end the following:

    ``SEC. 5606. <> STATE GRANTS TO HEALTH CARE
    PROVIDERS WHO PROVIDE SERVICES TO A HIGH PERCENTAGE OF
    MEDICALLY UNDERSERVED POPULATIONS OR OTHER SPECIAL
    POPULATIONS.

    ``(a) In General.--A State may award grants to health care providers
    who treat a high percentage, as determined by such State, of medically
    underserved populations or other special populations in such State.
    ``(b) Source of Funds.--A grant program established by a State under
    subsection (a) may not be established within a department, agency, or
    other entity of such State that administers the Medicaid program under
    title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), and no
    Federal or State funds allocated to such Medicaid program, the Medicare
    program under title XVIII of the Social Security Act (42 U.S.C. 1395 et
    seq.), or the TRICARE program under chapter 55 of title 10, United
    States Code, may be used to award grants or to pay administrative costs
    associated with a grant program established under subsection (a).''.
    (l) Part C of title VII of the Public Health Service Act (42 U.S.C.
    293k et seq.) is amended--
    (1) after the part heading, by inserting the following:

    ``Subpart I--Medical Training Generally'';

    and
    (2) by inserting at the end the following:

    [[Page 1000]]

    ``Subpart II--Training in Underserved Communities

    ``SEC. 749B. <> RURAL PHYSICIAN TRAINING GRANTS.

    ``(a) In General.--The Secretary, acting through the Administrator
    of the Health Resources and Services Administration, shall establish a
    grant program for the purposes of assisting eligible entities in
    recruiting students most likely to practice medicine in underserved
    rural communities, providing rural-focused training and experience, and
    increasing the number of recent allopathic and osteopathic medical
    school graduates who practice in underserved rural communities.
    ``(b) Eligible Entities.--In order to be eligible to receive a grant
    under this section, an entity shall--
    ``(1) be a school of allopathic or osteopathic medicine
    accredited by a nationally recognized accrediting agency or
    association approved by the Secretary for this purpose, or any
    combination or consortium of such schools; and
    ``(2) submit an application to the Secretary that includes a
    certification that such entity will use amounts provided to the
    institution as described in subsection (d)(1).

    ``(c) Priority.--In awarding grant funds under this section, the
    Secretary shall give priority to eligible entities that--
    ``(1) demonstrate a record of successfully training
    students, as determined by the Secretary, who practice medicine
    in underserved rural communities;
    ``(2) demonstrate that an existing academic program of the
    eligible entity produces a high percentage, as determined by the
    Secretary, of graduates from such program who practice medicine
    in underserved rural communities;
    ``(3) demonstrate rural community institutional
    partnerships, through such mechanisms as matching or
    contributory funding, documented in-kind services for
    implementation, or existence of training partners with
    interprofessional expertise in community health center training
    locations or other similar facilities; or
    ``(4) submit, as part of the application of the entity under
    subsection (b), a plan for the long-term tracking of where the
    graduates of such entity practice medicine.

    ``(d) Use of Funds.--
    ``(1) Establishment.--An eligible entity receiving a grant
    under this section shall use the funds made available under such
    grant to establish, improve, or expand a rural-focused training
    program (referred to in this section as the `Program') meeting
    the requirements described in this subsection and to carry out
    such program.
    ``(2) Structure of program.--An eligible entity shall--
    ``(A) enroll no fewer than 10 students per class
    year into the Program; and
    ``(B) develop criteria for admission to the Program
    that gives priority to students--
    ``(i) who have originated from or lived for a
    period of 2 or more years in an underserved rural
    community; and
    ``(ii) who express a commitment to practice
    medicine in an underserved rural community.

    [[Page 1001]]

    ``(3) Curricula.--The Program shall require students to
    enroll in didactic coursework and clinical experience
    particularly applicable to medical practice in underserved rural
    communities, including--
    ``(A) clinical rotations in underserved rural
    communities, and in applicable specialties, or other
    coursework or clinical experience deemed appropriate by
    the Secretary; and
    ``(B) in addition to core school curricula,
    additional coursework or training experiences focused on
    medical issues prevalent in underserved rural
    communities.
    ``(4) Residency placement assistance.--Where available, the
    Program shall assist all students of the Program in obtaining
    clinical training experiences in locations with postgraduate
    programs offering residency training opportunities in
    underserved rural communities, or in local residency training
    programs that support and train physicians to practice in
    underserved rural communities.
    ``(5) Program student cohort support.--The Program shall
    provide and require all students of the Program to participate
    in group activities designed to further develop, maintain, and
    reinforce the original commitment of such students to practice
    in an underserved rural community.

    ``(e) Annual Reporting.--An eligible entity receiving a grant under
    this section shall submit an annual report to the Secretary on the
    success of the Program, based on criteria the Secretary determines
    appropriate, including the residency program selection of graduating
    students who participated in the Program.
    ``(f) Regulations.-- <> Not later than 60 days
    after the date of enactment of this section, the Secretary shall by
    regulation define `underserved rural community' for purposes of this
    section.

    ``(g) Supplement Not Supplant.--Any eligible entity receiving funds
    under this section shall use such funds to supplement, not supplant, any
    other Federal, State, and local funds that would otherwise be expended
    by such entity to carry out the activities described in this section.
    ``(h) Maintenance of Effort.--With respect to activities for which
    funds awarded under this section are to be expended, the entity shall
    agree to maintain expenditures of non-Federal amounts for such
    activities at a level that is not less than the level of such
    expenditures maintained by the entity for the fiscal year preceding the
    fiscal year for which the entity receives a grant under this section.
    ``(i) Authorization of Appropriations.--There are authorized to be
    appropriated $4,000,000 for each of the fiscal years 2010 through
    2013.''.
    (m)(1) Section 768 of the Public Health Service Act (42 U.S.C. 295c)
    is amended to read as follows:

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

    ``(a) Grants. <> --The Secretary, acting through
    the Administrator of the Health Resources and Services Administration
    and in consultation with the Director of the Centers for Disease Control
    and Prevention, shall award grants to, or enter into contracts with,
    eligible entities to provide training to graduate medical residents in
    preventive medicine specialties.

    [[Page 1002]]

    ``(b) Eligibility.--To be eligible for a grant or contract under
    subsection (a), an entity shall be--
    ``(1) an accredited school of public health or school of
    medicine or osteopathic medicine;
    ``(2) an accredited public or private nonprofit hospital;
    ``(3) a State, local, or tribal health department; or
    ``(4) a consortium of 2 or more entities described in
    paragraphs (1) through (3).

    ``(c) Use of Funds.--Amounts received under a grant or contract
    under this section shall be used to--
    ``(1) plan, develop (including the development of
    curricula), operate, or participate in an accredited residency
    or internship program in preventive medicine or public health;
    ``(2) defray the costs of practicum experiences, as required
    in such a program; and
    ``(3) establish, maintain, or improve--
    ``(A) academic administrative units (including
    departments, divisions, or other appropriate units) in
    preventive medicine and public health; or
    ``(B) programs that improve clinical teaching in
    preventive medicine and public health.

    ``(d) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.
    (2) Section 770(a) of the Public Health Service Act (42
    U.S.C. 295e(a)) is amended to read as follows:

    ``(a) In General.--For the purpose of carrying out this subpart,
    there is authorized to be appropriated $43,000,000 for fiscal year 2011,
    and such sums as may be necessary for each of the fiscal years 2012
    through 2015.''.
    (n)(1) Subsection (i) of section 331 of the Public Health Service
    Act (42 U.S.C. 254d) of the Public Health Service Act is amended--
    (A) in paragraph (1), by striking ``In carrying out subpart
    III'' and all that follows through the period and inserting ``In
    carrying out subpart III, the Secretary may, in accordance with
    this subsection, issue waivers to individuals who have entered
    into a contract for obligated service under the Scholarship
    Program or the Loan Repayment Program under which the
    individuals are authorized to satisfy the requirement of
    obligated service through providing clinical practice that is
    half time.'';
    (B) in paragraph (2)--
    (i) in subparagraphs (A)(ii) and (B), by striking
    ``less than full time'' each place it appears and
    inserting ``half time'';
    (ii) in subparagraphs (C) and (F), by striking
    ``less than full-time service'' each place it appears
    and inserting ``half-time service''; and
    (iii) by amending subparagraphs (D) and (E) to read
    as follows:
    ``(D) the entity and the Corps member agree in writing that
    the Corps member will perform half-time clinical practice;
    ``(E) the Corps member agrees in writing to fulfill all of
    the service obligations under section 338C through half-time
    clinical practice and either--
    ``(i) double the period of obligated service that
    would otherwise be required; or

    [[Page 1003]]

    ``(ii) in the case of contracts entered into under
    section 338B, accept a minimum service obligation of 2
    years with an award amount equal to 50 percent of the
    amount that would otherwise be payable for full-time
    service; and''; and
    (C) in paragraph (3), by striking ``In evaluating a
    demonstration project described in paragraph (1)'' and inserting
    ``In evaluating waivers issued under paragraph (1)''.

    (2) Subsection (j) of section 331 of the Public Health Service Act
    (42 U.S.C. 254d) is amended by adding at the end the following:
    ``(5) <> The terms `full time' and
    `full-time' mean a minimum of 40 hours per week in a clinical
    practice, for a minimum of 45 weeks per year.
    ``(6) The terms `half time' and `half-time' mean a minimum
    of 20 hours per week (not to exceed 39 hours per week) in a
    clinical practice, for a minimum of 45 weeks per year.''.

    (3) Section 337(b)(1) of the Public Health Service Act (42 U.S.C.
    254j(b)(1)) is amended by striking ``Members may not be reappointed to
    the Council.''.
    (4) Section 338B(g)(2)(A) of the Public Health Service Act (42
    U.S.C. 254l-1(g)(2)(A)) is amended by striking ``$35,000'' and inserting
    ``$50,000, plus, beginning with fiscal year 2012, an amount determined
    by the Secretary on an annual basis to reflect inflation,''.
    (5) Subsection (a) of section 338C of the Public Health Service Act
    (42 U.S.C. 254m), as amended by section 5508, is amended--
    (A) by striking the second sentence and inserting the
    following: ``The Secretary may treat teaching as clinical
    practice for up to 20 percent of such period of obligated
    service.''; and
    (B) by adding at the end the following: ``Notwithstanding
    the preceding sentence, with respect to a member of the Corps
    participating in the teaching health centers graduate medical
    education program under section 340H, for the purpose of
    calculating time spent in full-time clinical practice under this
    section, up to 50 percent of time spent teaching by such member
    may be counted toward his or her service obligation.''.

    SEC. 10502. INFRASTRUCTURE TO EXPAND ACCESS TO CARE.

    (a) Appropriation.--There are authorized to be appropriated, and
    there are appropriated to the Department of Health and Human Services,
    $100,000,000 for fiscal year 2010, to remain available for obligation
    until September 30, 2011, to be used for debt service on, or direct
    construction or renovation of, a health care facility that provides
    research, inpatient tertiary care, or outpatient clinical services. Such
    facility shall be affiliated with an academic health center at a public
    research university in the United States that contains a State's sole
    public academic medical and dental school.
    (b) Requirement.-- <> Amount appropriated
    under subsection (a) may only be made available by the Secretary of
    Health and Human Services upon the receipt of an application from the
    Governor of a State that certifies that--
    (1) the new health care facility is critical for the
    provision of greater access to health care within the State;
    (2) such facility is essential for the continued financial
    viability of the State's sole public medical and dental school
    and its academic health center;
    (3) the request for Federal support represents not more than
    40 percent of the total cost of the proposed new facility; and

    [[Page 1004]]

    (4) the State has established a dedicated funding mechanism
    to provide all remaining funds necessary to complete the
    construction or renovation of the proposed facility.

    SEC. 10503. <> COMMUNITY HEALTH CENTERS AND THE
    NATIONAL HEALTH SERVICE CORPS FUND.

    (a) Purpose.--It is the purpose of this section to establish a
    Community Health Center Fund (referred to in this section as the ``CHC
    Fund''), to be administered through the Office of the Secretary of the
    Department of Health and Human Services to provide for expanded and
    sustained national investment in community health centers under section
    330 of the Public Health Service Act and the National Health Service
    Corps.
    (b) Funding.--There is authorized to be appropriated, and there is
    appropriated, out of any monies in the Treasury not otherwise
    appropriated, to the CHC Fund--
    (1) to be transferred to the Secretary of Health and Human
    Services to provide enhanced funding for the community health
    center program under section 330 of the Public Health Service
    Act--
    (A) $700,000,000 for fiscal year 2011;
    (B) $800,000,000 for fiscal year 2012;
    (C) $1,000,000,000 for fiscal year 2013;
    (D) $1,600,000,000 for fiscal year 2014; and
    (E) $2,900,000,000 for fiscal year 2015; and
    (2) to be transferred to the Secretary of Health and Human
    Services to provide enhanced funding for the National Health
    Service Corps--
    (A) $290,000,000 for fiscal year 2011;
    (B) $295,000,000 for fiscal year 2012;
    (C) $300,000,000 for fiscal year 2013;
    (D) $305,000,000 for fiscal year 2014; and
    (E) $310,000,000 for fiscal year 2015.

    (c) Construction.-- <> There is
    authorized to be appropriated, and there is appropriated, out of any
    monies in the Treasury not otherwise appropriated, $1,500,000,000 to be
    available for fiscal years 2011 through 2015 to be used by the Secretary
    of Health and Human Services for the construction and renovation of
    community health centers.

    (d) Use of Fund.--The Secretary of Health and Human Services shall
    transfer amounts in the CHC Fund to accounts within the Department of
    Health and Human Services to increase funding, over the fiscal year 2008
    level, for community health centers and the National Health Service
    Corps.
    (e) Availability.--Amounts appropriated under subsections (b) and
    (c) shall remain available until expended.

    SEC. 10504. <> DEMONSTRATION PROJECT TO PROVIDE
    ACCESS TO AFFORDABLE CARE.

    (a) In General.-- <> Not later than 6 months after
    the date of enactment of this Act, the Secretary of Health and Human
    Services (referred to in this section as the ``Secretary''), acting
    through the Health Resources and Services Administration, shall
    establish a 3 year demonstration project in up to 10 States to provide
    access to comprehensive health care services to the uninsured at reduced
    fees. <> The Secretary shall evaluate the feasibility
    of expanding the project to additional States.

    [[Page 1005]]

    (b) Eligibility.--To be eligible to participate in the demonstration
    project, an entity shall be a State-based, nonprofit, public-private
    partnership that provides access to comprehensive health care services
    to the uninsured at reduced fees. Each State in which a participant
    selected by the Secretary is located shall receive not more than
    $2,000,000 to establish and carry out the project for the 3-year
    demonstration period.
    (c) Authorization.--There is authorized to be appropriated such sums
    as may be necessary to carry out this section.

    Subtitle F--Provisions Relating to Title VI

    SEC. 10601. REVISIONS TO LIMITATION ON MEDICARE EXCEPTION TO THE
    PROHIBITION ON CERTAIN PHYSICIAN REFERRALS FOR HOSPITALS.

    (a) In General.--Section 1877(i) of the Social Security Act, as
    added by section 6001(a), <> is amended--
    (1) in paragraph (1)(A)(i), by striking ``February 1, 2010''
    and inserting ``August 1, 2010''; and
    (2) in paragraph (3)(A)--
    (A) in clause (iii), by striking ``August 1, 2011''
    and inserting ``February 1, 2012''; and
    (B) in clause (iv), by striking ``July 1, 2011'' and
    inserting ``January 1, 2012''.

    (b) Conforming Amendment.--Section 6001(b)(2) <> of this Act is amended by striking ``November 1, 2011'' and
    inserting ``May 1, 2012''.

    SEC. 10602. CLARIFICATIONS TO PATIENT-CENTERED OUTCOMES RESEARCH.

    Section 1181 of the Social Security Act (as added by section
    6301) <> is amended--
    (1) in subsection (d)(2)(B)--
    (A) in clause (ii)(IV)--
    (i) by inserting ``, as described in
    subparagraph (A)(ii),'' after ``original
    research''; and
    (ii) by inserting ``, as long as the
    researcher enters into a data use agreement with
    the Institute for use of the data from the
    original research, as appropriate'' after
    ``publication''; and
    (B) by amending clause (iv) to read as follows:
    ``(iv) Subsequent use of the data.--The
    Institute shall not allow the subsequent use of
    data from original research in work-for-hire
    contracts with individuals, entities, or
    instrumentalities that have a financial interest
    in the results, unless approved under a data use
    agreement with the Institute.'';
    (2) in subsection (d)(8)(A)(iv), by striking ``not be
    construed as mandates for'' and inserting ``do not include'';
    and
    (3) in subsection (f)(1)(C), by amending clause (ii) to read
    as follows:
    ``(ii) 7 members representing physicians and
    providers, including 4 members representing
    physicians (at least 1 of whom is a surgeon), 1
    nurse, 1 State-licensed integrative health care
    practitioner, and 1 representative of a
    hospital.''.

    [[Page 1006]]

    SEC. 10603. STRIKING PROVISIONS RELATING TO INDIVIDUAL PROVIDER
    APPLICATION FEES.

    (a) In General.--Section 1866(j)(2)(C) of the Social Security Act,
    as added by section 6401(a), <> is amended--
    (1) by striking clause (i);
    (2) by redesignating clauses (ii) through (iv),
    respectively, as clauses (i) through (iii); and
    (3) in clause (i), as redesignated by paragraph (2), by
    striking ``clause (iii)'' and inserting ``clause (ii)''.

    (b) Technical Correction.--Section 6401(a)(2) of this Act is amended
    to read as follows:
    ``(2) by redesignating paragraph (2) as paragraph (8);
    and''.

    SEC. 10604. TECHNICAL CORRECTION TO SECTION 6405.

    Paragraphs (1) and (2) of section 6405(b) are amended to read as
    follows:
    ``(1) Part a.--Section 1814(a)(2) of the Social Security Act
    ( <> 42 U.S.C. 1395(a)(2)) is amended in
    the matter preceding subparagraph (A) by inserting `, or, in the
    case of services described in subparagraph (C), a physician
    enrolled under section 1866(j),' after `in collaboration with a
    physician,'.
    ``(2) Part b.--Section 1835(a)(2) of the Social Security Act
    (42 U.S.C. 1395n(a)(2)) is amended in the matter preceding
    subparagraph (A) by inserting `, or, in the case of services
    described in subparagraph (A), a physician enrolled under
    section 1866(j),' after `a physician'.''.

    SEC. 10605. CERTAIN OTHER PROVIDERS PERMITTED TO CONDUCT FACE TO FACE
    ENCOUNTER FOR HOME HEALTH SERVICES.

    (a) Part A.--Section 1814(a)(2)(C) of the Social Security Act (42
    U.S.C. 1395f(a)(2)(C)), as amended by section 6407(a)(1), is amended by
    inserting ``, or a nurse practitioner or clinical nurse specialist (as
    those terms are defined in section 1861(aa)(5)) who is working in
    collaboration with the physician in accordance with State law, or a
    certified nurse-midwife (as defined in section 1861(gg)) as authorized
    by State law, or a physician assistant (as defined in section
    1861(aa)(5)) under the supervision of the physician,'' after ``himself
    or herself''.
    (b) Part B.--Section 1835(a)(2)(A)(iv) of the Social Security Act,
    as added by section 6407(a)(2), is amended by inserting ``, or a nurse
    practitioner or clinical nurse specialist (as those terms are defined in
    section 1861(aa)(5)) who is working in collaboration with the physician
    in accordance with State law, or a certified nurse-midwife (as defined
    in section 1861(gg)) as authorized by State law, or a physician
    assistant (as defined in section 1861(aa)(5)) under the supervision of
    the physician,'' after ``must document that the physician''.

    SEC. 10606. HEALTH CARE FRAUD ENFORCEMENT.

    (a) <> Fraud Sentencing Guidelines.--
    (1) Definition.--In this subsection, the term ``Federal
    health care offense'' has the meaning given that term in section
    24 of title 18, United States Code, as amended by this Act.
    (2) Review and amendments.--Pursuant to the authority under
    section 994 of title 28, United States Code, and in accordance
    with this subsection, the United States Sentencing Commission
    shall--

    [[Page 1007]]

    (A) review the Federal Sentencing Guidelines and
    policy statements applicable to persons convicted of
    Federal health care offenses;
    (B) amend the Federal Sentencing Guidelines and
    policy statements applicable to persons convicted of
    Federal health care offenses involving Government health
    care programs to provide that the aggregate dollar
    amount of fraudulent bills submitted to the Government
    health care program shall constitute prima facie
    evidence of the amount of the intended loss by the
    defendant; and
    (C) amend the Federal Sentencing Guidelines to
    provide--
    (i) a 2-level increase in the offense level
    for any defendant convicted of a Federal health
    care offense relating to a Government health care
    program which involves a loss of not less than
    $1,000,000 and less than $7,000,000;
    (ii) a 3-level increase in the offense level
    for any defendant convicted of a Federal health
    care offense relating to a Government health care
    program which involves a loss of not less than
    $7,000,000 and less than $20,000,000;
    (iii) a 4-level increase in the offense level
    for any defendant convicted of a Federal health
    care offense relating to a Government health care
    program which involves a loss of not less than
    $20,000,000; and
    (iv) if appropriate, otherwise amend the
    Federal Sentencing Guidelines and policy
    statements applicable to persons convicted of
    Federal health care offenses involving Government
    health care programs.
    (3) Requirements.--In carrying this subsection, the United
    States Sentencing Commission shall--
    (A) ensure that the Federal Sentencing Guidelines
    and policy statements--
    (i) reflect the serious harms associated with
    health care fraud and the need for aggressive and
    appropriate law enforcement action to prevent such
    fraud; and
    (ii) provide increased penalties for persons
    convicted of health care fraud offenses in
    appropriate circumstances;
    (B) consult with individuals or groups representing
    health care fraud victims, law enforcement officials,
    the health care industry, and the Federal judiciary as
    part of the review described in paragraph (2);
    (C) ensure reasonable consistency with other
    relevant directives and with other guidelines under the
    Federal Sentencing Guidelines;
    (D) account for any aggravating or mitigating
    circumstances that might justify exceptions, including
    circumstances for which the Federal Sentencing
    Guidelines, as in effect on the date of enactment of
    this Act, provide sentencing enhancements;
    (E) make any necessary conforming changes to the
    Federal Sentencing Guidelines; and
    (F) ensure that the Federal Sentencing Guidelines
    adequately meet the purposes of sentencing.

    [[Page 1008]]

    (b) Intent Requirement for Health Care Fraud.--Section 1347 of title
    18, United States Code, is amended--
    (1) by inserting ``(a)'' before ``Whoever knowingly''; and
    (2) by adding at the end the following:

    ``(b) With respect to violations of this section, a person need not
    have actual knowledge of this section or specific intent to commit a
    violation of this section.''.
    (c) Health Care Fraud Offense.--Section 24(a) of title 18, United
    States Code, is amended--
    (1) in paragraph (1), by striking the semicolon and
    inserting ``or section 1128B of the Social Security Act (42
    U.S.C. 1320a-7b); or''; and
    (2) in paragraph (2)--
    (A) by inserting ``1349,'' after ``1343,''; and
    (B) by inserting ``section 301 of the Federal Food,
    Drug, and Cosmetic Act (21 U.S.C. 331), or section 501
    of the Employee Retirement Income Security Act of 1974
    (29 U.S.C. 1131),'' after ``title,''.

    (d) Subpoena Authority Relating to Health Care.--
    (1) Subpoenas under the health insurance portability and
    accountability act of 1996.--Section 1510(b) of title 18, United
    States Code, is amended--
    (A) in paragraph (1), by striking ``to the grand
    jury''; and
    (B) in paragraph (2)--
    (i) in subparagraph (A), by striking ``grand
    jury subpoena'' and inserting ``subpoena for
    records''; and
    (ii) in the matter following subparagraph (B),
    by striking ``to the grand jury''.
    (2) Subpoenas under the civil rights of institutionalized
    persons act.--The Civil Rights of Institutionalized Persons Act
    (42 U.S.C. 1997 et seq.) is amended by inserting after section 3
    the following:

    ``SEC. 3A. <> SUBPOENA AUTHORITY.

    ``(a) Authority.--The Attorney General, or at the direction of the
    Attorney General, any officer or employee of the Department of Justice
    may require by subpoena access to any institution that is the subject of
    an investigation under this Act and to any document, record, material,
    file, report, memorandum, policy, procedure, investigation, video or
    audio recording, or quality assurance report relating to any institution
    that is the subject of an investigation under this Act to determine
    whether there are conditions which deprive persons residing in or
    confined to the institution of any rights, privileges, or immunities
    secured or protected by the Constitution or laws of the United States.
    ``(b) Issuance and Enforcement of Subpoenas.--
    ``(1) Issuance.--Subpoenas issued under this section--
    ``(A) shall bear the signature of the Attorney
    General or any officer or employee of the Department of
    Justice as designated by the Attorney General; and
    ``(B) shall be served by any person or class of
    persons designated by the Attorney General or a
    designated officer or employee for that purpose.
    ``(2) Enforcement.--In the case of contumacy or failure to
    obey a subpoena issued under this section, the United States
    district court for the judicial district in which the
    institution

    [[Page 1009]]

    is located may issue an order requiring compliance. Any failure
    to obey the order of the court may be punished by the court as a
    contempt that court.

    ``(c) Protection of Subpoenaed Records and Information.--Any
    document, record, material, file, report, memorandum, policy, procedure,
    investigation, video or audio recording, or quality assurance report or
    other information obtained under a subpoena issued under this section--
    ``(1) may not be used for any purpose other than to protect
    the rights, privileges, or immunities secured or protected by
    the Constitution or laws of the United States of persons who
    reside, have resided, or will reside in an institution;
    ``(2) may not be transmitted by or within the Department of
    Justice for any purpose other than to protect the rights,
    privileges, or immunities secured or protected by the
    Constitution or laws of the United States of persons who reside,
    have resided, or will reside in an institution; and
    ``(3) shall be redacted, obscured, or otherwise altered if
    used in any publicly available manner so as to prevent the
    disclosure of any personally identifiable information.''.

    SEC. 10607. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO
    CURRENT MEDICAL TORT LITIGATION.

    Part P of title III of the Public Health Service Act (42 U.S.C. 280g
    et seq.), as amended by this Act, is further amended by adding at the
    end the following:

    ``SEC. 399V-4. <> STATE DEMONSTRATION
    PROGRAMS TO EVALUATE ALTERNATIVES TO CURRENT MEDICAL TORT
    LITIGATION.

    ``(a) In General.--The Secretary is authorized to award
    demonstration grants to States for the development, implementation, and
    evaluation of alternatives to current tort litigation for resolving
    disputes over injuries allegedly caused by health care providers or
    health care organizations. In awarding such grants, the Secretary shall
    ensure the diversity of the alternatives so funded.
    ``(b) Duration.--The Secretary may award grants under subsection (a)
    for a period not to exceed 5 years.
    ``(c) Conditions for Demonstration Grants.--
    ``(1) Requirements.--Each State desiring a grant under
    subsection (a) shall develop an alternative to current tort
    litigation that--
    ``(A) allows for the resolution of disputes over
    injuries allegedly caused by health care providers or
    health care organizations; and
    ``(B) promotes a reduction of health care errors by
    encouraging the collection and analysis of patient
    safety data related to disputes resolved under
    subparagraph (A) by organizations that engage in efforts
    to improve patient safety and the quality of health
    care.
    ``(2) Alternative to current tort litigation.--Each State
    desiring a grant under subsection (a) shall demonstrate how the
    proposed alternative described in paragraph (1)(A)--
    ``(A) makes the medical liability system more
    reliable by increasing the availability of prompt and
    fair resolution of disputes;
    ``(B) encourages the efficient resolution of
    disputes;
    ``(C) encourages the disclosure of health care
    errors;

    [[Page 1010]]

    ``(D) enhances patient safety by detecting,
    analyzing, and helping to reduce medical errors and
    adverse events;
    ``(E) improves access to liability insurance;
    ``(F) fully informs patients about the differences
    in the alternative and current tort litigation;
    ``(G) provides patients the ability to opt out of or
    voluntarily withdraw from participating in the
    alternative at any time and to pursue other options,
    including litigation, outside the alternative;
    ``(H) would not conflict with State law at the time
    of the application in a way that would prohibit the
    adoption of an alternative to current tort litigation;
    and
    ``(I) would not limit or curtail a patient's
    existing legal rights, ability to file a claim in or
    access a State's legal system, or otherwise abrogate a
    patient's ability to file a medical malpractice claim.
    ``(3) Sources of compensation.--Each State desiring a grant
    under subsection (a) shall identify the sources from and methods
    by which compensation would be paid for claims resolved under
    the proposed alternative to current tort litigation, which may
    include public or private funding sources, or a combination of
    such sources. Funding methods shall to the extent practicable
    provide financial incentives for activities that improve patient
    safety.
    ``(4) Scope.--
    ``(A) In general.--Each State desiring a grant under
    subsection (a) shall establish a scope of jurisdiction
    (such as Statewide, designated geographic region, a
    designated area of health care practice, or a designated
    group of health care providers or health care
    organizations) for the proposed alternative to current
    tort litigation that is sufficient to evaluate the
    effects of the alternative. No scope of jurisdiction
    shall be established under this paragraph that is based
    on a health care payer or patient population.
    ``(B) Notification of patients.--A State shall
    demonstrate how patients would be notified that they are
    receiving health care services that fall within such
    scope, and the process by which they may opt out of or
    voluntarily withdraw from participating in the
    alternative. The decision of the patient whether to
    participate or continue participating in the alternative
    process shall be made at any time and shall not be
    limited in any way.
    ``(5) Preference in awarding demonstration grants.--In
    awarding grants under subsection (a), the Secretary shall give
    preference to States--
    ``(A) that have developed the proposed alternative
    through substantive consultation with relevant
    stakeholders, including patient advocates, health care
    providers and health care organizations, attorneys with
    expertise in representing patients and health care
    providers, medical malpractice insurers, and patient
    safety experts;
    ``(B) that make proposals that are likely to enhance
    patient safety by detecting, analyzing, and helping to
    reduce medical errors and adverse events; and
    ``(C) that make proposals that are likely to improve
    access to liability insurance.

    ``(d) Application.--

    [[Page 1011]]

    ``(1) In general.--Each State desiring a grant under
    subsection (a) shall submit to the Secretary an application, at
    such time, in such manner, and containing such information as
    the Secretary may require.
    ``(2) Review panel.--
    ``(A) In general.-- <> In
    reviewing applications under paragraph (1), the
    Secretary shall consult with a review panel composed of
    relevant experts appointed by the Comptroller General.
    ``(B) Composition.--
    ``(i) Nominations.--The Comptroller General
    shall solicit nominations from the public for
    individuals to serve on the review panel.
    ``(ii) Appointment.--The Comptroller General
    shall appoint, at least 9 but not more than 13,
    highly qualified and knowledgeable individuals to
    serve on the review panel and shall ensure that
    the following entities receive fair representation
    on such panel:
    ``(I) Patient advocates.
    ``(II) Health care providers and
    health care organizations.
    ``(III) Attorneys with expertise in
    representing patients and health care
    providers.
    ``(IV) Medical malpractice insurers.
    ``(V) State officials.
    ``(VI) Patient safety experts.
    ``(C) Chairperson.--The Comptroller General, or an
    individual within the Government Accountability Office
    designated by the Comptroller General, shall be the
    chairperson of the review panel.
    ``(D) Availability of information.--The Comptroller
    General shall make available to the review panel such
    information, personnel, and administrative services and
    assistance as the review panel may reasonably require to
    carry out its duties.
    ``(E) Information from agencies.--The review panel
    may request directly from any department or agency of
    the United States any information that such panel
    considers necessary to carry out its duties. To the
    extent consistent with applicable laws and regulations,
    the head of such department or agency shall furnish the
    requested information to the review panel.

    ``(e) Reports.--
    ``(1) By state.--Each State receiving a grant under
    subsection (a) shall submit to the Secretary an annual report
    evaluating the effectiveness of activities funded with grants
    awarded under such subsection. Such report shall, at a minimum,
    include the impact of the activities funded on patient safety
    and on the availability and price of medical liability
    insurance.
    ``(2) By secretary.--The Secretary shall submit to Congress
    an annual compendium of the reports submitted under paragraph
    (1) and an analysis of the activities funded under subsection
    (a) that examines any differences that result from such
    activities in terms of the quality of care, number and nature of
    medical errors, medical resources used, length of

    [[Page 1012]]

    time for dispute resolution, and the availability and price of
    liability insurance.

    ``(f) Technical Assistance.--
    ``(1) In general.--The Secretary shall provide technical
    assistance to the States applying for or awarded grants under
    subsection (a).
    ``(2) Requirements.--Technical assistance under paragraph
    (1) shall include--
    ``(A) guidance on non-economic damages, including
    the consideration of individual facts and circumstances
    in determining appropriate payment, guidance on
    identifying avoidable injuries, and guidance on
    disclosure to patients of health care errors and adverse
    events; and
    ``(B) the development, in consultation with States,
    of common definitions, formats, and data collection
    infrastructure for States receiving grants under this
    section to use in reporting to facilitate aggregation
    and analysis of data both within and between States.
    ``(3) Use of common definitions, formats, and data
    collection infrastructure.--States not receiving grants under
    this section may also use the common definitions, formats, and
    data collection infrastructure developed under paragraph (2)(B).

    ``(g) Evaluation.--
    ``(1) In general.--
    <> The Secretary, in
    consultation with the review panel established under subsection
    (d)(2), shall enter into a contract with an appropriate research
    organization to conduct an overall evaluation of the
    effectiveness of grants awarded under subsection (a) and to
    annually prepare and submit a report to Congress. Such an
    evaluation shall begin not later than 18 months following the
    date of implementation of the first program funded by a grant
    under subsection (a).
    ``(2) Contents.--The evaluation under paragraph (1) shall
    include--
    ``(A) an analysis of the effects of the grants
    awarded under subsection (a) with regard to the measures
    described in paragraph (3);
    ``(B) for each State, an analysis of the extent to
    which the alternative developed under subsection (c)(1)
    is effective in meeting the elements described in
    subsection (c)(2);
    ``(C) a comparison among the States receiving grants
    under subsection (a) of the effectiveness of the various
    alternatives developed by such States under subsection
    (c)(1);
    ``(D) a comparison, considering the measures
    described in paragraph (3), of States receiving grants
    approved under subsection (a) and similar States not
    receiving such grants; and
    ``(E) a comparison, with regard to the measures
    described in paragraph (3), of--
    ``(i) States receiving grants under subsection
    (a);
    ``(ii) States that enacted, prior to the date
    of enactment of the Patient Protection and
    Affordable Care Act, any cap on non-economic
    damages; and
    ``(iii) States that have enacted, prior to the
    date of enactment of the Patient Protection and
    Affordable Care Act, a requirement that the
    complainant obtain

    [[Page 1013]]

    an opinion regarding the merit of the claim,
    although the substance of such opinion may have no
    bearing on whether the complainant may proceed
    with a case.
    ``(3) Measures.--The evaluations under paragraph (2) shall
    analyze and make comparisons on the basis of--
    ``(A) the nature and number of disputes over
    injuries allegedly caused by health care providers or
    health care organizations;
    ``(B) the nature and number of claims in which tort
    litigation was pursued despite the existence of an
    alternative under subsection (a);
    ``(C) the disposition of disputes and claims,
    including the length of time and estimated costs to all
    parties;
    ``(D) the medical liability environment;
    ``(E) health care quality;
    ``(F) patient safety in terms of detecting,
    analyzing, and helping to reduce medical errors and
    adverse events;
    ``(G) patient and health care provider and
    organization satisfaction with the alternative under
    subsection (a) and with the medical liability
    environment; and
    ``(H) impact on utilization of medical services,
    appropriately adjusted for risk.
    ``(4) Funding.--The Secretary shall reserve 5 percent of the
    amount appropriated in each fiscal year under subsection (k) to
    carry out this subsection.

    ``(h) MedPAC and MACPAC Reports.--
    ``(1) MedPAC.--The Medicare Payment Advisory Commission
    shall conduct an independent review of the alternatives to
    current tort litigation that are implemented under grants under
    subsection (a) to determine the impact of such alternatives on
    the Medicare program under title XVIII of the Social Security
    Act, and its beneficiaries.
    ``(2) MACPAC.--The Medicaid and CHIP Payment and Access
    Commission shall conduct an independent review of the
    alternatives to current tort litigation that are implemented
    under grants under subsection (a) to determine the impact of
    such alternatives on the Medicaid or CHIP programs under titles
    XIX and XXI of the Social Security Act, and their beneficiaries.
    ``(3) Reports.--Not later than December 31, 2016, the
    Medicare Payment Advisory Commission and the Medicaid and CHIP
    Payment and Access Commission shall each submit to Congress a
    report that includes the findings and recommendations of each
    respective Commission based on independent reviews conducted
    under paragraphs (1) and (2), including an analysis of the
    impact of the alternatives reviewed on the efficiency and
    effectiveness of the respective programs.

    ``(i) Option To Provide for Initial Planning Grants.--Of the funds
    appropriated pursuant to subsection (k), the Secretary may use a portion
    not to exceed $500,000 per State to provide planning grants to such
    States for the development of demonstration project applications meeting
    the criteria described in subsection (c). In selecting States to receive
    such planning grants, the Secretary shall give preference to those
    States in which State law at the time of the application would not
    prohibit the adoption of an alternative to current tort litigation.
    ``(j) Definitions.--In this section:

    [[Page 1014]]

    ``(1) Health care services.--The term `health care services'
    means any services provided by a health care provider, or by any
    individual working under the supervision of a health care
    provider, that relate to--
    ``(A) the diagnosis, prevention, or treatment of any
    human disease or impairment; or
    ``(B) the assessment of the health of human beings.
    ``(2) Health care organization.--The term `health care
    organization' means any individual or entity which is obligated
    to provide, pay for, or administer health benefits under any
    health plan.
    ``(3) Health care provider.--The term `health care provider'
    means any individual or entity--
    ``(A) licensed, registered, or certified under
    Federal or State laws or regulations to provide health
    care services; or
    ``(B) required to be so licensed, registered, or
    certified but that is exempted by other statute or
    regulation.

    ``(k) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section, $50,000,000 for the 5-fiscal
    year period beginning with fiscal year 2011.
    ``(l) Current State Efforts To Establish Alternative To Tort
    Litigation.--Nothing in this section shall be construed to limit any
    prior, current, or future efforts of any State to establish any
    alternative to tort litigation.
    ``(m) Rule of Construction.--Nothing in this section shall be
    construed as limiting states' authority over or responsibility for their
    state justice systems.''.

    SEC. 10608. EXTENSION OF MEDICAL MALPRACTICE COVERAGE TO FREE CLINICS.

    (a) In General.--Section 224(o)(1) of the Public Health Service Act
    (42 U.S.C. 233(o)(1)) is amended by inserting after ``to an individual''
    the following: ``, or an officer, governing board member, employee, or
    contractor of a free clinic shall in providing services for the free
    clinic,''.
    (b) <> Effective Date.--The amendment made
    by this section shall take effect on the date of enactment of this Act
    and apply to any act or omission which occurs on or after that date.

    SEC. 10609. <> LABELING CHANGES.

    Section 505(j) of the Federal Food, Drug, and Cosmetic Act (21
    U.S.C. 355(j)) is amended by adding at the end the following:
    ``(10)(A) <> If the proposed labeling of a drug
    that is the subject of an application under this subsection differs from
    the listed drug due to a labeling revision described under clause (i),
    the drug that is the subject of such application shall, notwithstanding
    any other provision of this Act, be eligible for approval and shall not
    be considered misbranded under section 502 if--
    ``(i) the application is otherwise eligible for approval
    under this subsection but for expiration of patent, an
    exclusivity period, or of a delay in approval described in
    paragraph (5)(B)(iii), and a revision to the labeling of the
    listed drug has been approved by the Secretary within 60 days of
    such expiration;
    ``(ii) the labeling revision described under clause (i) does
    not include a change to the `Warnings' section of the labeling;

    [[Page 1015]]

    ``(iii) the sponsor of the application under this subsection
    agrees to submit revised labeling of the drug that is the
    subject of such application not later than 60 days after the
    notification of any changes to such labeling required by the
    Secretary; and
    ``(iv) such application otherwise meets the applicable
    requirements for approval under this subsection.

    ``(B) <> If, after a labeling revision
    described in subparagraph (A)(i), the Secretary determines that the
    continued presence in interstate commerce of the labeling of the listed
    drug (as in effect before the revision described in subparagraph (A)(i))
    adversely impacts the safe use of the drug, no application under this
    subsection shall be eligible for approval with such labeling.''.

    Subtitle G--Provisions Relating to Title VIII

    SEC. 10801. PROVISIONS RELATING TO TITLE VIII.

    (a) Title XXXII of the Public Health Service Act, as added by
    section 8002(a)(1), is amended--
    (1) in section 3203 <> --
    (A) in subsection (a)(1), by striking subparagraph
    (E);
    (B) in subsection (b)(1)(C)(i), by striking ``for
    enrollment'' and inserting ``for reenrollment''; and
    (C) in subsection (c)(1), by striking ``, as part of
    their automatic enrollment in the CLASS program,''; and
    (2) in section 3204 <> --
    (A) in subsection (c)(2), by striking subparagraph
    (A) and inserting the following:
    ``(A) receives wages or income on which there is
    imposed a tax under section 3101(a) or 3201(a) of the
    Internal Revenue Code of 1986; or'';
    (B) in subsection (d), by striking ``subparagraph
    (B) or (C) of subsection (c)(1)'' and inserting
    ``subparagraph (A) or (B) of subsection (c)(2)'';
    (C) in subsection (e)(2)(A), by striking
    ``subparagraph (A)'' and inserting ``paragraph (1)'';
    and
    (D) in subsection (g)(1), by striking ``has elected
    to waive enrollment'' and inserting ``has not
    enrolled''.

    (b) Section 8002 of this Act is amended in the heading for
    subsection (d), by striking ``Information on Supplemental Coverage'' and
    inserting ``CLASS Program Information''.
    (c) Section 6021(d)(2)(A)(iv) of the Deficit Reduction Act of 2005,
    as added by section 8002(d) of this Act, <> is
    amended by striking ``and coverage available'' and all that follows
    through ``that program,''.

    Subtitle H--Provisions Relating to Title IX

    SEC. 10901. MODIFICATIONS TO EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED
    HEALTH COVERAGE.

    (a) Longshore Workers Treated as Employees Engaged in High-risk
    Professions.--Paragraph (3) of section 4980I(f) of the Internal Revenue
    Code of 1986, as added by section 9001 of this Act, <> is amended by inserting ``individuals whose primary

    [[Page 1016]]

    work is longshore work (as defined in section 258(b) of the Immigration
    and Nationality Act (8 U.S.C. 1288(b)), determined without regard to
    paragraph (2) thereof),'' before ``and individuals engaged in the
    construction, mining''.

    (b) Exemption From High-cost Insurance Tax Includes Certain
    Additional Excepted Benefits.--Clause (i) of section 4980I(d)(1)(B) of
    the Internal Revenue Code of 1986, as added by section 9001 of this Act,
    is amended by striking ``section 9832(c)(1)(A)'' and inserting ``section
    9832(c)(1) (other than subparagraph (G) thereof)''.
    (c) <> Effective Date.--The amendments
    made by this section shall apply to taxable years beginning after
    December 31, 2012.

    SEC. 10902. INFLATION ADJUSTMENT OF LIMITATION ON HEALTH FLEXIBLE
    SPENDING ARRANGEMENTS UNDER CAFETERIA PLANS.

    (a) In General.--Subsection (i) of section 125 of the Internal
    Revenue Code of 1986, as added by section 9005 of this Act, <> is amended to read as follows:

    ``(i) Limitation on Health Flexible Spending Arrangements.--
    ``(1) In general.--For purposes of this section, if a
    benefit is provided under a cafeteria plan through employer
    contributions to a health flexible spending arrangement, such
    benefit shall not be treated as a qualified benefit unless the
    cafeteria plan provides that an employee may not elect for any
    taxable year to have salary reduction contributions in excess of
    $2,500 made to such arrangement.
    ``(2) Adjustment for inflation.-- <> In the case of any taxable year beginning after December
    31, 2011, the dollar amount in paragraph (1) shall be increased
    by an amount equal to--
    ``(A) such amount, multiplied by
    ``(B) the cost-of-living adjustment determined under
    section 1(f)(3) for the calendar year in which such
    taxable year begins by substituting `calendar year 2010'
    for `calendar year 1992' in subparagraph (B) thereof.
    If any increase determined under this paragraph is not a
    multiple of $50, such increase shall be rounded to the next
    lowest multiple of $50.''.

    (b) <> Effective Date.--The amendment made
    by this section shall apply to taxable years beginning after December
    31, 2010.

    SEC. 10903. MODIFICATION OF LIMITATION ON CHARGES BY CHARITABLE
    HOSPITALS.

    (a) In General.--Subparagraph (A) of section 501(r)(5) of the
    Internal Revenue Code of 1986, as added by section 9007 of this
    Act, <> is amended by striking ``the lowest amounts
    charged'' and inserting ``the amounts generally billed''.

    (b) <> Effective Date.--The amendment made
    by this section shall apply to taxable years beginning after the date of
    the enactment of this Act.

    SEC. 10904. MODIFICATION OF ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS
    AND IMPORTERS.

    (a) In General.--Section 9009 of this Act <> is amended--
    (1) by striking ``2009'' in subsection (a)(1) and inserting
    ``2010'',

    [[Page 1017]]

    (2) by inserting ``($3,000,000,000 after 2017)'' after
    ``$2,000,000,000'', and
    (3) by striking ``2008'' in subsection (i) and inserting
    ``2009''.

    (b) <> Effective Date.--The amendments
    made by this section shall take effect as if included in the enactment
    of section 9009.

    SEC. 10905. <> MODIFICATION OF ANNUAL FEE
    ON HEALTH INSURANCE PROVIDERS.

    (a) Determination of Fee Amount.--Subsection (b) of section 9010 of
    this Act is amended to read as follows:
    ``(b) Determination of Fee Amount.--
    ``(1) In general.--With respect to each covered entity, the
    fee under this section for any calendar year shall be equal to
    an amount that bears the same ratio to the applicable amount
    as--
    ``(A) the covered entity's net premiums written with
    respect to health insurance for any United States health
    risk that are taken into account during the preceding
    calendar year, bears to
    ``(B) the aggregate net premiums written with
    respect to such health insurance of all covered entities
    that are taken into account during such preceding
    calendar year.
    ``(2) Amounts taken into account.--For purposes of paragraph
    (1), the net premiums written with respect to health insurance
    for any United States health risk that are taken into account
    during any calendar year with respect to any covered entity
    shall be determined in accordance with the following table:

    ``With respect to a covered entity's    The percentage of net premiums
    net premiums written during the        written that are taken into
    calendar year that are:                    account is:

    Not more than $25,000,000............  0 percent
    More than $25,000,000 but not more     50 percent
    than $50,000,000.
    More than $50,000,000................  100 percent.

    ``(3) Secretarial determination.--The Secretary shall
    calculate the amount of each covered entity's fee for any
    calendar year under paragraph (1). In calculating such amount,
    the Secretary shall determine such covered entity's net premiums
    written with respect to any United States health risk on the
    basis of reports submitted by the covered entity under
    subsection (g) and through the use of any other source of
    information available to the Secretary.''.

    (b) Applicable Amount.--Subsection (e) of section 9010 of this Act
    is amended to read as follows:
    ``(e) Applicable Amount.--For purposes of subsection (b)(1), the
    applicable amount shall be determined in accordance with the following
    table:

    ``Calendar year                          Applicable amount
    2011.................................  $2,000,000,000
    2012.................................  $4,000,000,000

    [[Page 1018]]

    2013.................................  $7,000,000,000
    2014, 2015 and 2016..................  $9,000,000,000
    2017 and thereafter..................  $10,000,000,000.''.

    (c) Exemption From Annual Fee on Health Insurance for Certain
    Nonprofit Entities.--Section 9010(c)(2) of this Act is amended by
    striking ``or'' at the end of subparagraph (A), by striking the period
    at the end of subparagraph (B) and inserting a comma, and by adding at
    the end the following new subparagraphs:
    ``(C) any entity--
    ``(i)(I) which is incorporated as, is a wholly
    owned subsidiary of, or is a wholly owned
    affiliate of, a nonprofit corporation under a
    State law, or
    ``(II) which is described in section 501(c)(4)
    of the Internal Revenue Code of 1986 and the
    activities of which consist of providing
    commercial-type insurance (within the meaning of
    section 501(m) of such Code),
    ``(ii) the premium rate increases of which are
    regulated by a State authority,
    ``(iii) which, as of the date of the enactment
    of this section, acts as the insurer of last
    resort in the State and is subject to State
    guarantee issue requirements, and
    ``(iv) for which the medical loss ratio
    (determined in a manner consistent with the
    determination of such ratio under section
    2718(b)(1)(A) of the Public Health Service Act)
    with respect to the individual insurance market
    for such entity for the calendar year is not less
    than 100 percent,
    ``(D) any entity--
    ``(i)(I) which is incorporated as a nonprofit
    corporation under a State law, or
    ``(II) which is described in section 501(c)(4)
    of the Internal Revenue Code of 1986 and the
    activities of which consist of providing
    commercial-type insurance (within the meaning of
    section 501(m) of such Code), and
    ``(ii) for which the medical loss ratio (as so
    determined)--
    ``(I) with respect to each of the
    individual, small group, and large group
    insurance markets for such entity for
    the calendar year is not less than 90
    percent, and
    ``(II) with respect to all such
    markets for such entity for the calendar
    year is not less than 92 percent, or
    ``(E) any entity--
    ``(i) which is a mutual insurance company,
    ``(ii) which for the period reported on the
    2008 Accident and Health Policy Experience Exhibit
    of the National Association of Insurance
    Commissioners had--
    ``(I) a market share of the insured
    population of a State of at least 40 but
    not more than 60 percent, and

    [[Page 1019]]

    ``(II) with respect to all markets
    described in subparagraph (D)(ii)(I), a
    medical loss ratio of not less than 90
    percent, and
    ``(iii) with respect to annual payment dates
    in calendar years after 2011, for which the
    medical loss ratio (determined in a manner
    consistent with the determination of such ratio
    under section 2718(b)(1)(A) of the Public Health
    Service Act) with respect to all such markets for
    such entity for the preceding calendar year is not
    less than 89 percent (except that with respect to
    such annual payment date for 2012, the calculation
    under 2718(b)(1)(B)(ii) of such Act is determined
    by reference to the previous year, and with
    respect to such annual payment date for 2013, such
    calculation is determined by reference to the
    average for the previous 2 years).''.

    (d) Certain Insurance Exempted From Fee.--Paragraph (3) of section
    9010(h) of this Act is amended to read as follows:
    ``(3) Health insurance.--The term `health insurance' shall
    not include--
    ``(A) any insurance coverage described in paragraph
    (1)(A) or (3) of section 9832(c) of the Internal Revenue
    Code of 1986,
    ``(B) any insurance for long-term care, or
    ``(C) any medicare supplemental health insurance (as
    defined in section 1882(g)(1) of the Social Security
    Act).''.

    (e) Anti-avoidance Guidance.--Subsection (i) of section 9010 of this
    Act is amended by inserting ``and shall prescribe such regulations as
    are necessary or appropriate to prevent avoidance of the purposes of
    this section, including inappropriate actions taken to qualify as an
    exempt entity under subsection (c)(2)'' after ``section''.
    (f) Conforming Amendments.--
    (1) Section 9010(a)(1) of this Act is amended by striking
    ``2009'' and inserting ``2010''.
    (2) Section 9010(c)(2)(B) of this Act is amended by striking
    ``(except'' and all that follows through ``1323)''.
    (3) Section 9010(c)(3) of this Act is amended by adding at
    the end the following new sentence: ``If any entity described in
    subparagraph (C)(i)(I), (D)(i)(I), or (E)(i) of paragraph (2) is
    treated as a covered entity by reason of the application of the
    preceding sentence, the net premiums written with respect to
    health insurance for any United States health risk of such
    entity shall not be taken into account for purposes of this
    section.''.
    (4) Section 9010(g)(1) of this Act is amended by striking
    ``and third party administration agreement fees''.
    (5) Section 9010(j) of this Act is amended--
    (A) by striking ``2008'' and inserting ``2009'', and
    (B) by striking ``, and any third party
    administration agreement fees received after such
    date''.

    (g) Effective Date.--The amendments made by this section shall take
    effect as if included in the enactment of section 9010.

    [[Page 1020]]

    SEC. 10906. MODIFICATIONS TO ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-
    INCOME TAXPAYERS.

    (a) FICA.--Section 3101(b)(2) of the Internal Revenue Code of 1986,
    as added by section 9015(a)(1) of this Act, <> is
    amended by striking ``0.5 percent'' and inserting ``0.9 percent''.

    (b) SECA.--Section 1401(b)(2)(A) of the Internal Revenue Code of
    1986, as added by section 9015(b)(1) of this Act, <> is amended by striking ``0.5 percent'' and inserting ``0.9
    percent''.

    (c) <> Effective Date.--The amendments made
    by this section shall apply with respect to remuneration received, and
    taxable years beginning, after December 31, 2012.

    SEC. 10907. EXCISE TAX ON INDOOR TANNING SERVICES IN LIEU OF ELECTIVE
    COSMETIC MEDICAL PROCEDURES.

    (a) <> In General.--The provisions of,
    and amendments made by, section 9017 of this Act are hereby deemed null,
    void, and of no effect.

    (b) Excise Tax on Indoor Tanning Services.--Subtitle D of the
    Internal Revenue Code of 1986, as amended by this Act, is amended by
    adding at the end the following new chapter:

    ``CHAPTER 49--COSMETIC SERVICES

    ``Sec. 5000B. Imposition of tax on indoor tanning services.

    ``SEC. 5000B. <> IMPOSITION OF TAX ON INDOOR
    TANNING SERVICES.

    ``(a) In General.--There is hereby imposed on any indoor tanning
    service a tax equal to 10 percent of the amount paid for such service
    (determined without regard to this section), whether paid by insurance
    or otherwise.
    ``(b) Indoor Tanning Service.-- <> For purposes
    of this section--
    ``(1) In general.--The term `indoor tanning service' means a
    service employing any electronic product designed to incorporate
    1 or more ultraviolet lamps and intended for the irradiation of
    an individual by ultraviolet radiation, with wavelengths in air
    between 200 and 400 nanometers, to induce skin tanning.
    ``(2) Exclusion of phototherapy services.--Such term does
    not include any phototherapy service performed by a licensed
    medical professional.

    ``(c) Payment of Tax.--
    ``(1) In general.--The tax imposed by this section shall be
    paid by the individual on whom the service is performed.
    ``(2) Collection.-- <> Every person
    receiving a payment for services on which a tax is imposed under
    subsection (a) shall collect the amount of the tax from the
    individual on whom the service is performed and remit such tax
    quarterly to the Secretary at such time and in such manner as
    provided by the Secretary.
    ``(3) Secondary liability.--Where any tax imposed by
    subsection (a) is not paid at the time payments for indoor
    tanning services are made, then to the extent that such tax is
    not collected, such tax shall be paid by the person who performs
    the service.''.

    (c) Clerical Amendment.--The table of chapter for subtitle D of the
    Internal Revenue Code of 1986, as amended by this Act, is amended by
    inserting after the item relating to chapter 48 the following new item:

    [[Page 1021]]

    ``Chapter 49--Cosmetic Services''.

    (d) <> Effective Date.--The amendments
    made by this section shall apply to services performed on or after July
    1, 2010.

    SEC. 10908. EXCLUSION FOR ASSISTANCE PROVIDED TO PARTICIPANTS IN STATE
    STUDENT LOAN REPAYMENT PROGRAMS FOR CERTAIN HEALTH
    PROFESSIONALS.

    (a) In General.--Paragraph (4) of section 108(f) of the Internal
    Revenue Code of 1986 <> is amended to read as
    follows:
    ``(4) Payments under national health service corps loan
    repayment program and certain state loan repayment programs.--In
    the case of an individual, gross income shall not include any
    amount received under section 338B(g) of the Public Health
    Service Act, under a State program described in section 338I of
    such Act, or under any other State loan repayment or loan
    forgiveness program that is intended to provide for the
    increased availability of health care services in underserved or
    health professional shortage areas (as determined by such
    State).''.

    (b) <> Effective Date.--The amendment made
    by this section shall apply to amounts received by an individual in
    taxable years beginning after December 31, 2008.

    SEC. 10909. EXPANSION OF ADOPTION CREDIT AND ADOPTION ASSISTANCE
    PROGRAMS.

    (a) Increase in Dollar Limitation.--
    (1) Adoption credit.--
    (A) In general.--Paragraph (1) of section 23(b) of
    the Internal Revenue Code of 1986 <> (relating to dollar limitation) is amended by
    striking ``$10,000'' and inserting ``$13,170''.
    (B) Child with special needs.--Paragraph (3) of
    section 23(a) of such Code (relating to $10,000 credit
    for adoption of child with special needs regardless of
    expenses) is amended--
    (i) in the text by striking ``$10,000'' and
    inserting ``$13,170'', and
    (ii) in the heading by striking ``$10,000''
    and inserting ``$13,170''.
    (C) Conforming amendment to inflation adjustment.--
    Subsection (h) of section 23 of such Code (relating to
    adjustments for inflation) is amended to read as
    follows:

    ``(h) <> Adjustments for Inflation.--
    ``(1) Dollar limitations.--In the case of a taxable year
    beginning after December 31, 2010, each of the dollar amounts in
    subsections (a)(3) and (b)(1) shall be increased by an amount
    equal to--
    ``(A) such dollar amount, multiplied by
    ``(B) the cost-of-living adjustment determined under
    section 1(f)(3) for the calendar year in which the
    taxable year begins, determined by substituting
    `calendar year 2009' for `calendar year 1992' in
    subparagraph (B) thereof.
    If any amount as increased under the preceding sentence is not a
    multiple of $10, such amount shall be rounded to the nearest
    multiple of $10.
    ``(2) Income limitation.--In the case of a taxable year
    beginning after December 31, 2002, the dollar amount in
    subsection (b)(2)(A)(i) shall be increased by an amount equal
    to--

    [[Page 1022]]

    ``(A) such dollar amount, multiplied by
    ``(B) the cost-of-living adjustment determined under
    section 1(f)(3) for the calendar year in which the
    taxable year begins, determined by substituting
    `calendar year 2001' for `calendar year 1992' in
    subparagraph (B) thereof.
    If any amount as increased under the preceding sentence is not a
    multiple of $10, such amount shall be rounded to the nearest
    multiple of $10.''.
    (2) Adoption assistance programs.--
    (A) In general.--Paragraph (1) of section 137(b) of
    the Internal Revenue Code of 1986 <> (relating to dollar limitation) is amended by
    striking ``$10,000'' and inserting ``$13,170''.
    (B) Child with special needs.--Paragraph (2) of
    section 137(a) of such Code (relating to $10,000
    exclusion for adoption of child with special needs
    regardless of expenses) is amended--
    (i) in the text by striking ``$10,000'' and
    inserting ``$13,170'', and
    (ii) in the heading by striking ``$10,000''
    and inserting ``$13,170''.
    (C) Conforming amendment to inflation adjustment.--
    Subsection (f) of section 137 of such Code (relating to
    adjustments for inflation) is amended to read as
    follows:

    ``(f) <> Adjustments for Inflation.--
    ``(1) Dollar limitations.--In the case of a taxable year
    beginning after December 31, 2010, each of the dollar amounts in
    subsections (a)(2) and (b)(1) shall be increased by an amount
    equal to--
    ``(A) such dollar amount, multiplied by
    ``(B) the cost-of-living adjustment determined under
    section 1(f)(3) for the calendar year in which the
    taxable year begins, determined by substituting
    `calendar year 2009' for `calendar year 1992' in
    subparagraph (B) thereof.
    If any amount as increased under the preceding sentence is not a
    multiple of $10, such amount shall be rounded to the nearest
    multiple of $10.
    ``(2) Income limitation.--In the case of a taxable year
    beginning after December 31, 2002, the dollar amount in
    subsection (b)(2)(A) shall be increased by an amount equal to--
    ``(A) such dollar amount, multiplied by
    ``(B) the cost-of-living adjustment determined under
    section 1(f)(3) for the calendar year in which the
    taxable year begins, determined by substituting
    `calendar year 2001' for `calendar year 1992' in
    subparagraph thereof.
    If any amount as increased under the preceding sentence is not a
    multiple of $10, such amount shall be rounded to the nearest
    multiple of $10.''.

    (b) Credit Made Refundable.--
    (1) Credit moved to subpart relating to refundable
    credits.--The Internal Revenue Code of 1986 is amended--
    (A) by redesignating section 23, <> as amended by subsection (a), as section 36C, and
    (B) by moving section 36C (as so redesignated) from
    subpart A of part IV of subchapter A of chapter 1 to the
    location immediately before section 37 in subpart C of
    part IV of subchapter A of chapter 1.

    [[Page 1023]]

    (2) Conforming amendments.--
    (A) Section 24(b)(3)(B) of such Code <> is amended by striking ``23,''.
    (B) Section 25(e)(1)(C) of such Code <> is amended by striking ``23,'' both places it
    appears.
    (C) Section 25A(i)(5)(B) of such Code <> is amended by striking ``23, 25D,'' and inserting
    ``25D''.
    (D) Section 25B(g)(2) of such Code <> is amended by striking ``23,''.
    (E) Section 26(a)(1) of such Code <> is amended by striking ``23,''.
    (F) Section 30(c)(2)(B)(ii) of such Code <> is amended by striking ``23, 25D,'' and
    inserting ``25D''.
    (G) Section 30B(g)(2)(B)(ii) of such Code <> is amended by striking ``23,''.
    (H) Section 30D(c)(2)(B)(ii) of such Code <> is amended by striking ``sections 23 and''
    and inserting ``section''.
    (I) Section 36C of such Code, <> as so redesignated, is amended--
    (i) by striking paragraph (4) of subsection
    (b), and
    (ii) by striking subsection (c).
    (J) Section 137 of such Code <> is amended--
    (i) by striking ``section 23(d)'' in
    subsection (d) and inserting ``section 36C(d)'',
    and
    (ii) by striking ``section 23'' in subsection
    (e) and inserting ``section 36C''.
    (K) Section 904(i) of such Code <> is amended by striking ``23,''.
    (L) Section 1016(a)(26) <> is
    amended by striking ``23(g)'' and inserting ``36C(g)''.
    (M) Section 1400C(d) of such Code <> is amended by striking ``23,''.
    (N) Section 6211(b)(4)(A) of such Code <> is amended by inserting ``36C,'' before
    ``53(e)''.
    (O) The table of sections for subpart A of part IV
    of subchapter A of chapter 1 of such Code of 1986 is
    amended by striking the item relating to section 23.
    (P) Paragraph (2) of section 1324(b) of title 31,
    United States Code, as amended by this Act, is amended
    by inserting ``36C,'' after ``36B,''.
    (Q) The table of sections for subpart C of part IV
    of subchapter A of chapter 1 of the Internal Revenue
    Code of 1986, as amended by this Act, is amended by
    inserting after the item relating to section 36B the
    following new item:

    ``Sec. 36C. Adoption expenses.''.

    (c) <> Application and Extension of EGTRRA
    Sunset.--Notwithstanding section 901 of the Economic Growth and Tax
    Relief Reconciliation Act of 2001, such section shall apply to the
    amendments made by this section and the amendments made by section 202
    of such Act by substituting ``December 31, 2011'' for ``December 31,
    2010'' in subsection (a)(1) thereof.

    [[Page 1024]]

    (d) Effective Date.--The amendments <>  made
    by this section shall apply to taxable years beginning after December
    31, 2009.

    Approved March 23, 2010.

    LEGISLATIVE HISTORY--H.R. 3590:
    ---------------------------------------------------------------------------

    CONGRESSIONAL RECORD:
    Vol. 155 (2009):
    Oct. 7, 8, considered and passed
    House.
    Nov. 21, 30, Dec. 1-10, 13, 15, 16,
    19-24, considered and passed
    Senate, amended.
    Vol. 156 (2010):
    Mar. 21, House concurred in Senate
    amendments.
    DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2010):
    Mar. 23, Presidential remarks.