[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.

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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:
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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.