I 

118TH CONGRESS 

2D SESSION H. R. 10409 

To address the high costs of health care services, prescription drugs, and 

health insurance coverage in the United States, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 12, 2024 

Mr. WESTERMAN introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on 

Ways and Means, Education and the Workforce, the Judiciary, Oversight 

and Accountability, Rules, the Budget, Armed Services, and House Administration, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To address the high costs of health care services, prescription 

drugs, and health insurance coverage in the United 

States, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Fair Care Act of 2024’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—MODERNIZATION OF HEALTH SAVINGS ACCOUNTS 

Subtitle A—Modernization of Health Savings Accounts and Contributions 

Sec. 101. Modernization of health savings accounts. 

Sec. 102. Unused premium tax credits may be deposited in health savings accounts. 

Sec. 103. Health Reimbursement Arrangements and Other Account-Based 

Group Health Plans. 

Sec. 104. Cost-sharing reduction payments as eligible contributions. 

Sec. 105. Direct Primary Care. 

Subtitle B—Assistance to Health Savings Accounts 

Sec. 111. One-time application of saver’s credit to contributions to health savings accounts. 

Sec. 112. Grants for health savings account assistance and outreach. 

Sec. 113. New corporations required to use health savings accounts. 

Sec. 114. Federal employee health benefits and health savings accounts. 

TITLE II—IMPROVING PRIVATE HEALTH INSURANCE 

Subtitle A—Maintaining Protections for Patients With Preexisting Conditions 

Sec. 201. Guaranteed availability of coverage; prohibiting discrimination. 

Subtitle B—Expanding Coverage Options 

Sec. 211. Definition of ‘‘employer’’ under ERISA with respect to group health 

plans. 

Sec. 212. Short-term limited duration insurance. 

Subtitle C—Improving Commercial Health Insurance 

Sec. 221. Invisible Guaranteed Coverage Pool Reinsurance Program; tax on exchange plans. 

Sec. 222. Employer health insurance mandate repeal. 

Sec. 223. Refundable credits for coverage under a qualified health plan for individuals offered employer-sponsored insurance. 

Sec. 224. Inclusion in income of certain costs of employer-provided coverage 

under health plans. 

Sec. 225. Change in permissible age variation in health insurance premium 

rates. 

Sec. 226. Premium assistance adjustment to reflect age. 

Sec. 227. Premium assistance. 

Sec. 228. Adding copper plans to Exchanges. 

Sec. 229. Copper and bronze plans. 

Sec. 230. Waivers for State innovation. 

Sec. 231. Enrollment periods. 

Sec. 232. State-operated Exchanges flexibility for open enrollment periods. 

Sec. 233. Promoting health plans that cover individuals in more than one State. 

TITLE III—COMPETITION, TRANSPARENCY AND ACCOUNTABILITY 

Subtitle A—Provider and Insurer Competition 


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Sec. 301. Hospital consolidation. 

Sec. 302. Authority of Federal Trade Commission over certain tax-exempt organizations. 

Sec. 303. Leveling the playing field between payers and providers. 

Sec. 304. Banning anticompetitive terms in facility and insurance contracts 

that limit access to higher quality, lower cost care. 

Sec. 305. Repealing eligibility of certain ACOs. 

Sec. 306. Repeal of health care reform provisions limiting Medicare exception 

to the prohibition on certain physician referrals for hospitals. 

Sec. 307. Alternative payment model for certain shoppable procedures. 

Subtitle B—Price Transparency 

Sec. 321. Price transparency requirements. 

Sec. 322. Ensuring enrollee access to cost-sharing information. 

Sec. 323. Access of individuals to protected health information. 

Sec. 324. Timely bills for patients. 

Sec. 325. Advisory group on reducing burden of hospital administrative requirements. 

Sec. 326. Data reporting to improve the transparency regarding how 340B hospital covered entities provide care for patients. 

Sec. 327. Requiring 340B drug discount program reports by DSH hospital covered entities on low-income utilization rate of outpatient hospital services. 

Sec. 328. Employer benefits reports. 

Sec. 329. Government Accountability Office study on profit- and revenue-sharing in health care. 

Subtitle C—Prescription Drug Competition and Innovation 

Sec. 341. Expedited development and priority review for generic complex drug 

products. 

Sec. 342. Preventing blocking of generic drugs. 

Sec. 343. Ensuring timely access to generics. 

Sec. 344. Preemption of State barriers to the substitution of biosimilar products. 

Sec. 345. Increasing pharmaceutical options to treat an unmet medical need. 

Sec. 346. Conditional approval of new human drugs for individuals with rare, 

progressive, and serious diseases. 

Sec. 347. Consolidating exclusivity periods for drugs treating rare diseases and 

conditions. 

Sec. 348. Exclusivity period for brand name biological products. 

Sec. 349. Regulation of manufacturer-sponsored co-pay contributions. 

Sec. 350. Antitrust exemption for private health insurance issuers to negotiate 

wholesale acquisition prices of prescription drugs purchased 

from drug manufacturers. 

Sec. 351. Biological product innovation. 

Sec. 352. Biosimilar biological products. 

Sec. 353. Prompt approval of drugs related to safety information. 

Sec. 354. Congressional review of the Food and Drug Administration rulemaking. 

Sec. 355. Government Accountability Office study of rules. 

Subtitle D—Prescription Drug and Pharmacy Benefit Manager Transparency 

Sec. 361. Patent disclosure requirements. 


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Sec. 362. Requirements with respect to prescription drug benefits. 

Sec. 363. PBM transparency and elimination of DIR fees. 

Sec. 364. Health plan oversight of pharmacy benefit manager services. 

Sec. 365. Study by Comptroller General of United States. 

Subtitle E—Medicare and Medicaid Prescription Drug Reforms 

Sec. 371. Medicare part D modernization redesign. 

Sec. 372. Maximum monthly cap on cost-sharing payments under prescription 

drug plans and MA–PD plans. 

Sec. 373. Market based part B pricing index. 

Sec. 374. Innovation model testing of Medicare drug payments. 

Sec. 375. Modification of maximum rebate amount under Medicaid drug rebate 

program. 

Subtitle F—Medical Malpractice Reform 

Sec. 381. Definitions. 

Sec. 382. Encouraging speedy resolution of claims. 

Sec. 383. Compensating patient injury. 

Sec. 384. Maximizing patient recovery. 

Sec. 385. Authorization of payment of future damages to claimants in health 

care lawsuits. 

Sec. 386. Product liability for health care providers. 

Sec. 387. Effect on other laws. 

Sec. 388. Limitation on expert witness testimony. 

Sec. 389. Expert witness qualifications. 

Sec. 390. Communications following unanticipated outcome. 

Sec. 391. Affidavit of merit. 

Sec. 392. Notice of intent to commence lawsuit. 

Sec. 393. Limitation on liability for volunteer health care professionals. 

Sec. 394. Rules of construction. 

Sec. 395. Effective date. 

TITLE IV—MEDICARE AND MEDICAID REFORMS 

Subtitle A—Medicaid Reforms 

Sec. 401. Medicaid payment reform. 

Sec. 402. Income limitations for refundable credits for coverage under a qualified health plan. 

Sec. 403. Medicaid eligibility determinations. 

Sec. 404. Lowering safe harbor threshold with respect to State taxes on health 

care providers. 

Sec. 405. Providing for State approval and implementation of specified waivers 

under the Medicaid program. 

Sec. 406. Deduction for qualified charity care. 

Subtitle B—Medicare Reforms 

Sec. 411. Off-campus provider-based department Medicare site neutral payment. 

Sec. 412. Eliminating FEHBP eligibility for annuitants. 

Sec. 413. Elimination of Medicare eligibility for certain individuals. 

Sec. 414. Medicare part D tax deduction. 

Sec. 415. Repeal of net investment income tax. 

Sec. 416. Medicare coverage of bad debt. 


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Subtitle C—Medicare Choice and Competition 

Sec. 421. Competitive bidding and premiums under unified Medicare. 

Sec. 422. New unified eligibility and enrollment rules. 

Sec. 423. New benefit structure under unified Medicare. 

Sec. 424. Late enrollment penalty not to apply for months of any health coverage. 

Sec. 425. Medigap reform. 

Sec. 426. ACO revision. 

Sec. 427. Primary care options. 

Sec. 428. General provisions; effective date. 

Subtitle D—Telehealth Improvements and Expansion 

Sec. 431. Expansion of coverage of telehealth services. 

Sec. 432. Expanding the use of telehealth through the waiver of certain requirements. 

Sec. 433. Expanding the use of telehealth for mental health services. 

Sec. 434. Use of telehealth in emergency medical care. 

Sec. 435. Improvements to the process for adding telehealth services. 

Sec. 436. Rural health clinics and Federally qualified health centers. 

Sec. 437. Native American health facilities. 

Sec. 438. Waiver of telehealth restrictions during national emergencies. 

Sec. 439. Use of telehealth in recertification for hospice care. 

Sec. 440. Clarification for fraud and abuse laws regarding technologies provided to beneficiaries. 

Sec. 441. Study and report on increasing access to telehealth services in the 

home. 

Sec. 442. Analysis of telehealth waivers in alternative payment models. 

Sec. 443. Model to allow additional health professionals to furnish telehealth 

services. 

Sec. 444. Testing of models to examine the use of telehealth under the Medicare program. 

1 TITLE I—MODERNIZATION OF 

2 HEALTH SAVINGS ACCOUNTS 

3 Subtitle A—Modernization of 

4 Health Savings Accounts and 

5 Contributions 

6 SEC. 101. MODERNIZATION OF HEALTH SAVINGS AC7 COUNTS. 

8 (a) IN GENERAL.—Section 223 of the Internal Rev9 enue Code of 1986 is amended to read as follows: 


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1 ‘‘SEC. 223. HEALTH SAVINGS ACCOUNTS. 

2 ‘‘(a) DEDUCTION ALLOWED.—In the case of an indi3 vidual who is an eligible individual for any month during 

4 the taxable year, there shall be allowed as a deduction for 

5 the taxable year an amount equal to the aggregate amount 

6 paid in cash during such taxable year by or on behalf of 

7 such individual to a health savings account of such indi8 vidual. 

9 ‘‘(b) LIMITATIONS.— 

10 ‘‘(1) IN GENERAL.—The amount allowable as a 

11 deduction under subsection (a) with respect to any 

month is 1 12 ⁄12 of the dollar amount in effect under 

13 subsection (d)(2)(A) for the taxable year which in14 cluded such month. 

15 ‘‘(2) DENIAL OF DEDUCTION TO DEPEND16 ENTS.—No deduction shall be allowed under this 

17 section to any individual with respect to whom a de18 duction under section 151 is allowable to another 

19 taxpayer for a taxable year beginning in the cal20 endar year in which such individual’s taxable year 

21 begins. 

22 ‘‘(3) INCREASE IN LIMIT FOR INDIVIDUALS BE23 COMING ELIGIBLE INDIVIDUALS AFTER THE BEGIN24 NING OF THE YEAR.— 

25 ‘‘(A) IN GENERAL.—For purposes of com26 puting the limitation under paragraph (1) for 


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1 any taxable year, an individual who is an eligi2 ble individual during the last month of such 

3 taxable year shall be treated— 

4 ‘‘(i) as having been an eligible indi5 vidual during each of the months in such 

6 taxable year, and 

7 ‘‘(ii) as having been enrolled, during 

8 each of the months such individual is 

9 treated as an eligible individual solely by 

10 reason of clause (i), in the same qualified 

11 plan in which the individual was enrolled 

12 for the last month of such taxable year. 

13 ‘‘(B) FAILURE TO MAINTAIN QUALIFIED

14 PLAN COVERAGE.— 

15 ‘‘(i) IN GENERAL.—If, at any time 

16 during the testing period, the individual is 

17 not an eligible individual, then— 

18 ‘‘(I) gross income of the indi19 vidual for the taxable year in which 

20 occurs the first month in the testing 

21 period for which such individual is not 

22 an eligible individual is increased by 

23 the aggregate amount of all contribu24 tions to the health savings account of 

25 the individual which could not have 


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1 been made but for subparagraph (A), 

2 and 

3 ‘‘(II) the tax imposed by this 

4 chapter for any taxable year on the 

5 individual shall be increased by 10 

6 percent of the amount of such in7 crease. 

8 ‘‘(ii) EXCEPTION FOR DISABILITY OR

9 DEATH.—Subclauses (I) and (II) of clause 

10 (i) shall not apply if the individual ceased 

11 to be an eligible individual by reason of the 

12 death of the individual or the individual 

13 becoming disabled (within the meaning of 

14 section 72(m)(7)). 

15 ‘‘(iii) TESTING PERIOD.—The term 

16 ‘testing period’ means the period beginning 

17 with the last month of the taxable year re18 ferred to in subparagraph (A) and ending 

19 on the last day of the 12th month fol20 lowing such month. 

21 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur22 poses of this section— 

23 ‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible 

24 individual’ means, with respect to any month, any 


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1 individual if such individual is covered under a quali2 fied plan as of the 1st day of such month. 

3 ‘‘(2) QUALIFIED PLAN.— 

4 ‘‘(A) IN GENERAL.—The term ‘qualified 

5 health plan’ means any health plan, including 

6 employer plans, individual plans, short term 

7 plans, Medicare, Medicaid, VA health care, 

8 TRICARE, Indian health service, health care 

9 sharing ministries, and association health plans. 

10 ‘‘(B) EXCLUSION OF CERTAIN PLANS.— 

11 Such term does not include a health plan if 

12 substantially all of its coverage is— 

13 ‘‘(i) coverage for any benefit provided 

14 by permitted insurance, or 

15 ‘‘(ii) coverage (whether through insur16 ance or otherwise) for accidents, disability, 

17 dental care, vision care, or long-term care. 

18 ‘‘(3) PERMITTED INSURANCE.—The term ‘per19 mitted insurance’ means— 

20 ‘‘(A) insurance if substantially all of the 

21 coverage provided under such insurance relates 

22 to— 

23 ‘‘(i) liabilities incurred under workers’ 

24 compensation laws, 

25 ‘‘(ii) tort liabilities, 


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1 ‘‘(iii) liabilities relating to ownership 

2 or use of property, or 

3 ‘‘(iv) such other similar liabilities as 

4 the Secretary may specify by regulations, 

5 ‘‘(B) insurance for a specified disease or 

6 illness, and 

7 ‘‘(C) insurance paying a fixed amount per 

8 day (or other period) of hospitalization. 

9 ‘‘(4) FAMILY COVERAGE.—The term ‘family 

10 coverage’ means any coverage other than self-only 

11 coverage. 

12 ‘‘(d) HEALTH SAVINGS ACCOUNT.—For purposes of 

13 this section— 

14 ‘‘(1) IN GENERAL.—The term ‘health savings 

15 account’ means a trust created or organized in the 

16 United States as a health savings account exclusively 

17 for the purpose of paying the qualified medical ex18 penses of the account beneficiary, but only if the 

19 written governing instrument creating the trust 

20 meets the following requirements: 

21 ‘‘(A) Except in the case of a rollover con22 tribution described in subsection (f)(5) or sec23 tion 220(f)(5), no contribution will be accept24 ed— 

25 ‘‘(i) unless it is in cash, or 


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1 ‘‘(ii) to the extent such contribution, 

2 when added to previous contributions to 

3 the trust for the calendar year, exceeds the 

4 limitation amount specified in paragraph 

5 (2)(A), or 

6 ‘‘(iii) to the extent such contribution, 

7 when added to the balance of the account, 

8 exceeds the limitation amount specified in 

9 paragraph (2)(B). 

10 ‘‘(B) The trustee is a bank (as defined in 

11 section 408(n)), an insurance company (as de12 fined in section 816), or another person who 

13 demonstrates to the satisfaction of the Sec14 retary that the manner in which such person 

15 will administer the trust will be consistent with 

16 the requirements of this section. 

17 ‘‘(C) No part of the trust assets will be in18 vested in life insurance contracts. 

19 ‘‘(D) The assets of the trust will not be 

20 commingled with other property except in a 

21 common trust fund or common investment 

22 fund. 

23 ‘‘(E) The interest of an individual in the 

24 balance in his account is nonforfeitable. 

25 ‘‘(2) LIMITATIONS.— 


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1 ‘‘(A) ANNUAL LIMITATION.— 

2 ‘‘(i) IN GENERAL.—The limitation 

3 amount specified in this subparagraph is— 

4 ‘‘(I) $5,000 in the case of a 

5 qualified health plan with an actuarial 

6 value of less than 40 percent, 

7 ‘‘(II) $4,300 in the case of a 

8 qualified health plan with an actuarial 

9 value that is 40 percent or more and 

10 less than 75 percent, and 

11 ‘‘(III) $3,600 in the case of a 

12 qualified health plan with an actuarial 

13 value that is 75 percent or more. 

14 ‘‘(ii) ACTUARIAL VALUE OF QUALI15 FIED HEALTH PLAN.—For purposes of 

16 clause (i), the actuarial value of a qualified 

17 health plan is the percentage of the total 

18 average costs of covered benefits under the 

19 health plan. 

20 ‘‘(B) ACCOUNT ACCUMULATION LIMITA21 TION.—The limitation amount specified in this 

22 paragraph is $50,000. 

23 ‘‘(C) INDEXING.— 

24 ‘‘(i) IN GENERAL.—In the case of any 

25 taxable year beginning in a calendar year 


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1 after 2025, each dollar amount contained 

2 in subparagraphs (A)(i) and (B) shall be 

3 increased by the medical care cost adjust4 ment of such amount for such calendar 

5 year. 

6 ‘‘(ii) MEDICAL CARE COST ADJUST7 MENT.—For purposes of clause (i), the 

8 medical care cost adjustment for any cal9 endar year is the percentage (if any) by 

10 which— 

11 ‘‘(I) the medical care component 

12 of the C–CPI–U (as defined in section 

13 1(f)(6)) for August of the preceding 

14 calendar year, exceeds 

15 ‘‘(II) such component of the C– 

16 CPI–U (as so defined) for August of 

17 2024. 

18 ‘‘(iii) ROUNDING.— 

19 ‘‘(I) ANNUAL LIMITATION.—If 

20 any increase in a dollar amount con21 tained in subparagraph (A)(i) deter22 mined under clause (i) is not a mul23 tiple of $100, such increase shall be 

24 rounded to the nearest multiple of 

25 $100. 


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1 ‘‘(II) ACCOUNT LIMITATION.—If 

2 any increase in the dollar amount con3 tained in subparagraph (B) deter4 mined under clause (i) is not a mul5 tiple of $1,000, such increase shall be 

6 rounded to the nearest multiple of 

7 $1,000. 

8 ‘‘(D) COORDINATION WITH OTHER CON9 TRIBUTIONS.—The limitation which would (but 

10 for this paragraph) apply under subparagraphs 

11 (A) and (B) to an individual for any taxable 

12 year shall be reduced (but not below zero) by 

13 the sum of— 

14 ‘‘(i) the aggregate amount contributed 

15 to health savings accounts of such indi16 vidual which is excludable from the tax17 payer’s gross income for such taxable year 

18 under section 106(d) (and such amount 

19 shall not be allowed as a deduction under 

20 subsection (a)), and 

21 ‘‘(ii) the aggregate amount contrib22 uted to health savings accounts of such in23 dividual for such taxable year under sec24 tion 408(d)(9) (and such amount shall not 


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1 be allowed as a deduction under subsection 

2 (a)). 

3 ‘‘(3) QUALIFIED MEDICAL EXPENSES.— 

4 ‘‘(A) IN GENERAL.—The term ‘qualified 

5 medical expenses’ means, with respect to an ac6 count beneficiary, amounts paid by such bene7 ficiary for medical care (as defined in section 

8 213(d)) for such individual, the spouse of such 

9 individual, and any dependent (as defined in 

10 section 152, determined without regard to sub11 sections (b)(1), (b)(2), and (d)(1)(B) thereof) 

12 of such individual, but only to the extent such 

13 amounts are not compensated for by insurance 

14 or otherwise. For purposes of this subpara15 graph, amounts paid for menstrual care prod16 ucts shall be treated as paid for medical care. 

17 ‘‘(B) HEALTH INSURANCE MAY NOT BE

18 PURCHASED FROM ACCOUNT.— 

19 ‘‘(i) IN GENERAL.—Subparagraph (A) 

20 shall not apply to any payment for insur21 ance. 

22 ‘‘(ii) EXCEPTIONS.—Clause (i) shall 

23 not apply to any expense for coverage 

24 under— 


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1 ‘‘(I) a health plan during any pe2 riod of continuation coverage required 

3 under any Federal law, 

4 ‘‘(II) a qualified long-term care 

5 insurance contract (as defined in sec6 tion 7702B(b)), 

7 ‘‘(III) a health plan during a pe8 riod in which the individual is receiv9 ing unemployment compensation 

10 under any Federal or State law, or 

11 ‘‘(IV) in the case of an account 

12 beneficiary who has attained the age 

13 specified in section 1811 of the Social 

14 Security Act, any health insurance 

15 other than a medicare supplemental 

16 policy (as defined in section 1882 of 

17 the Social Security Act). 

18 ‘‘(iii) EXCEPTION FOR INTEGRATED

19 HEALTH PLANS.—Clause (i) shall not 

20 apply to any expense for coverage under an 

21 integration eligible health plan which is in22 tegrated with the health savings account 

23 within the meaning of section 106(d). 

24 ‘‘(iv) EXCEPTION FOR DIRECT PRI25 MARY CARE SERVICE ARRANGEMENTS.— 


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1 ‘‘(I) IN GENERAL.—A direct pri2 mary care service arrangement shall 

3 not be treated as insurance for pur4 poses of clause (i). 

5 ‘‘(II) DIRECT PRIMARY CARE

6 SERVICE ARRANGEMENT DEFINED.— 

7 For purposes of this clause, the term 

8 ‘direct primary care service arrange9 ment’ means an arrangement under 

10 which an individual is provided med11 ical care (as defined in section 

12 213(d)(1), determined without regard 

13 to subparagraph (E) thereof) con14 sisting solely of primary care services 

15 provided by primary care practitioners 

16 (as defined in section 1833(x)(2)(A) 

17 of the Social Security Act, determined 

18 without regard to clause (ii) thereof), 

19 if the sole compensation for such care 

20 is a fixed periodic fee. 

21 ‘‘(C) MENSTRUAL CARE PRODUCT.—For 

22 purposes of this paragraph, the term ‘menstrual 

23 care product’ means a tampon, pad, liner, cup, 

24 sponge, or similar product used by individuals 


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1 with respect to menstruation or other genital2 tract secretions. 

3 ‘‘(4) ACCOUNT BENEFICIARY.—The term ‘ac4 count beneficiary’ means the individual on whose be5 half the health savings account was established. 

6 ‘‘(5) CERTAIN RULES TO APPLY.—Rules similar 

7 to the following rules shall apply for purposes of this 

8 section: 

9 ‘‘(A) Section 219(d)(2) (relating to no de10 duction for rollovers). 

11 ‘‘(B) Section 219(f)(3) (relating to time 

12 when contributions deemed made). 

13 ‘‘(C) Except as provided in section 106(d), 

14 section 219(f)(5) (relating to employer pay15 ments). 

16 ‘‘(D) Section 408(g) (relating to commu17 nity property laws). 

18 ‘‘(E) Section 408(h) (relating to custodial 

19 accounts). 

20 ‘‘(e) TAX TREATMENT OF ACCOUNTS.— 

21 ‘‘(1) IN GENERAL.—A health savings account is 

22 exempt from taxation under this subtitle unless such 

23 account has ceased to be a health savings account. 

24 Notwithstanding the preceding sentence, any such 

25 account is subject to the taxes imposed by section 


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1 511 (relating to imposition of tax on unrelated busi2 ness income of charitable, etc. organizations). 

3 ‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 

4 to the rules of paragraphs (2) and (4) of section 

5 408(e) shall apply to health savings accounts, and 

6 any amount treated as distributed under such rules 

7 shall be treated as not used to pay qualified medical 

8 expenses. 

9 ‘‘(f) TAX TREATMENT OF DISTRIBUTIONS.— 

10 ‘‘(1) AMOUNTS USED FOR QUALIFIED MEDICAL

11 EXPENSES.—Any amount paid or distributed out of 

12 a health savings account which is used exclusively to 

13 pay qualified medical expenses of any account bene14 ficiary shall not be includible in gross income. 

15 ‘‘(2) INCLUSION OF AMOUNTS NOT USED FOR

16 QUALIFIED MEDICAL EXPENSES.—Any amount paid 

17 or distributed out of a health savings account which 

18 is not used exclusively to pay the qualified medical 

19 expenses of the account beneficiary shall be included 

20 in the gross income of such beneficiary. 

21 ‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE22 FORE DUE DATE OF RETURN.— 

23 ‘‘(A) IN GENERAL.—If any excess con24 tribution is contributed for a taxable year to 

25 any health savings account of an individual, 


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1 paragraph (2) shall not apply to distributions 

2 from the health savings accounts of such indi3 vidual (to the extent such distributions do not 

4 exceed the aggregate excess contributions to all 

5 such accounts of such individual for such year) 

6 if— 

7 ‘‘(i) such distribution is received by 

8 the individual on or before the last day 

9 prescribed by law (including extensions of 

10 time) for filing such individual’s return for 

11 such taxable year, and 

12 ‘‘(ii) such distribution is accompanied 

13 by the amount of net income attributable 

14 to such excess contribution. 

15 Any net income described in clause (ii) shall be 

16 included in the gross income of the individual 

17 for the taxable year in which it is received. 

18 ‘‘(B) EXCESS CONTRIBUTION.—For pur19 poses of subparagraph (A), the term ‘excess 

20 contribution’ means any contribution (other 

21 than a rollover contribution described in para22 graph (5) or section 220(f)(5)) which is neither 

23 excludable from gross income under section 

24 106(d) nor deductible under this section. 


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1 ‘‘(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT

2 USED FOR QUALIFIED MEDICAL EXPENSES.— 

3 ‘‘(A) IN GENERAL.—The tax imposed by 

4 this chapter on the account beneficiary for any 

5 taxable year in which there is a payment or dis6 tribution from a health savings account of such 

7 beneficiary which is includible in gross income 

8 under paragraph (2) shall be increased by 20 

9 percent of the amount which is so includible. 

10 ‘‘(B) EXCEPTION FOR DISABILITY OR

11 DEATH.—Subparagraph (A) shall not apply if 

12 the payment or distribution is made after the 

13 account beneficiary becomes disabled within the 

14 meaning of section 72(m)(7) or dies. 

15 ‘‘(C) EXCEPTION FOR DISTRIBUTIONS

16 AFTER MEDICARE ELIGIBILITY.—Subparagraph 

17 (A) shall not apply to any payment or distribu18 tion after the date on which the account bene19 ficiary attains the age specified in section 1811 

20 of the Social Security Act. 

21 ‘‘(5) ROLLOVER CONTRIBUTION.—An amount is 

22 described in this paragraph as a rollover contribu23 tion if it meets the requirements of subparagraphs 

24 (A) and (B). 


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1 ‘‘(A) IN GENERAL.—Paragraph (2) shall 

2 not apply to any amount paid or distributed 

3 from a health savings account to the account 

4 beneficiary to the extent the amount received is 

5 paid into a health savings account for the ben6 efit of such beneficiary not later than the 60th 

7 day after the day on which the beneficiary re8 ceives the payment or distribution. 

9 ‘‘(B) LIMITATION.—This paragraph shall 

10 not apply to any amount described in subpara11 graph (A) received by an individual from a 

12 health savings account if, at any time during 

13 the 1-year period ending on the day of such re14 ceipt, such individual received any other amount 

15 described in subparagraph (A) from a health 

16 savings account which was not includible in the 

17 individual’s gross income because of the appli18 cation of this paragraph. 

19 ‘‘(C) ROLLOVER FROM FSA, ARCHER MSA, 

20 AND HRA.—An amount is described in this sub21 paragraph for a calendar year as a rollover con22 tribution if the amount is the remaining balance 

23 in a health flexible spending account, Archer 

24 MSA, or health reimbursement arrangement 

25 that is contributed to the health savings acVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 count for a taxable year ending on or before 

2 one year after the date of the enactment of this 

3 subparagraph. 

4 ‘‘(6) COORDINATION WITH MEDICAL EXPENSE

5 DEDUCTION.—For purposes of determining the 

6 amount of the deduction under section 213, any pay7 ment or distribution out of a health savings account 

8 for qualified medical expenses shall not be treated as 

9 an expense paid for medical care. 

10 ‘‘(7) TRANSFER OF ACCOUNT INCIDENT TO DI11 VORCE.—The transfer of an individual’s interest in 

12 a health savings account to an individual’s spouse or 

13 former spouse under a divorce or separation instru14 ment described in clause (i) of section 121(d)(3)(C) 

15 shall not be considered a taxable transfer made by 

16 such individual notwithstanding any other provision 

17 of this subtitle, and such interest shall, after such 

18 transfer, be treated as a health savings account with 

19 respect to which such spouse is the account bene20 ficiary. 

21 ‘‘(8) TREATMENT AFTER DEATH OF ACCOUNT

22 BENEFICIARY.— 

23 ‘‘(A) TREATMENT IF DESIGNATED BENE24 FICIARY IS SPOUSE.—If the account bene25 ficiary’s surviving spouse acquires such beneVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 ficiary’s interest in a health savings account by 

2 reason of being the designated beneficiary of 

3 such account at the death of the account bene4 ficiary, such health savings account shall be 

5 treated as if the spouse were the account bene6 ficiary. 

7 ‘‘(B) OTHER CASES.— 

8 ‘‘(i) IN GENERAL.—If, by reason of 

9 the death of the account beneficiary, any 

10 person acquires the account beneficiary’s 

11 interest in a health savings account in a 

12 case to which subparagraph (A) does not 

13 apply— 

14 ‘‘(I) such account shall cease to 

15 be a health savings account as of the 

16 date of death, and 

17 ‘‘(II) an amount equal to the fair 

18 market value of the assets in such ac19 count on such date shall be includible 

20 if such person is not the estate of 

21 such beneficiary, in such person’s 

22 gross income for the taxable year 

23 which includes such date, or if such 

24 person is the estate of such bene25 ficiary, in such beneficiary’s gross inVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 come for the last taxable year of such 

2 beneficiary. 

3 ‘‘(ii) SPECIAL RULES.— 

4 ‘‘(I) REDUCTION OF INCLUSION

5 FOR PREDEATH EXPENSES.—The 

6 amount includible in gross income 

7 under clause (i) by any person (other 

8 than the estate) shall be reduced by 

9 the amount of qualified medical ex10 penses which were incurred by the de11 cedent before the date of the dece12 dent’s death and paid by such person 

13 within 1 year after such date. 

14 ‘‘(II) DEDUCTION FOR ESTATE

15 TAXES.—An appropriate deduction 

16 shall be allowed under section 691(c) 

17 to any person (other than the dece18 dent or the decedent’s spouse) with 

19 respect to amounts included in gross 

20 income under clause (i) by such per21 son. 

22 ‘‘(g) COST-OF-LIVING ADJUSTMENT.— 

23 ‘‘(1) IN GENERAL.—In the case of any taxable 

24 year beginning after December 31, 2025, each dollar 


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1 amount in paragraphs (2) and (3) of subsection (c) 

2 shall be increased by an amount equal to— 

3 ‘‘(A) such dollar amount, multiplied by 

4 ‘‘(B) the cost-of-living adjustment deter5 mined under section 1(f)(3) for the calendar 

6 year in which such taxable year begins deter7 mined by substituting ‘2024’ for ‘2016’ in sub8 paragraph (A)(ii) thereof. 

9 ‘‘(2) ROUNDING.—If any increase under para10 graph (1) is not a multiple of $50, such increase 

11 shall be rounded to the nearest multiple of $50. 

12 ‘‘(h) REPORTS.—The Secretary may require— 

13 ‘‘(1) the trustee of a health savings account to 

14 make such reports regarding such account to the 

15 Secretary and to the account beneficiary with re16 spect to contributions, distributions, the return of 

17 excess contributions, and such other matters as the 

18 Secretary determines appropriate, and 

19 ‘‘(2) any person who provides an individual with 

20 a qualified health plan to make such reports to the 

21 Secretary and to the account beneficiary with re22 spect to such plan as the Secretary determines ap23 propriate.’’. 

24 (b) EMPLOYER CONTRIBUTIONS TO HEALTH SAV25 INGS ACCOUNTS.— 


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1 (1) IN GENERAL.—Section 106(d) is amended 

2 to read as follows: 

3 ‘‘(d) CONTRIBUTIONS TO HEALTH SAVINGS AC4 COUNTS.— 

5 ‘‘(1) IN GENERAL.—In the case of an employee 

6 who is an eligible individual, amounts contributed by 

7 such employee’s employer to any health savings ac8 count of such employee shall be treated as employer9 provided coverage for medical expenses under an ac10 cident or health plan to the extent— 

11 ‘‘(A) such amounts do not exceed twice the 

12 limitation in effect under section 223(b)(2) (de13 termined without regard to this subsection) 

14 which is applicable to such employee for such 

15 taxable year, 

16 ‘‘(B) such amounts are contributed to an 

17 account which is integrated with an integration 

18 eligible health plan, 

19 ‘‘(C) such employer does not offer such 

20 employee coverage under any other accident or 

21 health plan, 

22 ‘‘(D) such employer offers such amounts 

23 only to members of a qualified class of employ24 ees and offers such amounts to all members of 

25 any such qualified class, 


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1 ‘‘(E) such employer offers employees an 

2 opportunity to elect not to receive such amounts 

3 at least once per year and upon termination 

4 from employment, and 

5 ‘‘(F) such employee is not covered under 

6 any health insurance offered by an employer of 

7 such employee’s spouse. 

8 ‘‘(2) INTEGRATION ELIGIBLE HEALTH PLAN.— 

9 For purposes of this subsection, the term ‘integra10 tion eligible health plan’ means— 

11 ‘‘(A) any bronze, silver, or gold plan of12 fered through an Exchange established under 

13 the Patient Protection and Affordable Care Act, 

14 ‘‘(B) entitlement to benefits under part A 

15 of title XVIII of the Social Security Act and en16 rollment under part B of such title, including 

17 enrollment under a Medicare Advantage plan 

18 under part C of such title, 

19 ‘‘(C) in the case of any individual who has 

20 not attained age 30 or is determined by the 

21 Secretary (after consultation with the Secretary 

22 of Health and Human Services) to have a hard23 ship, coverage under a catastrophic plan, and 


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1 ‘‘(D) in the case of any student, coverage 

2 under a health plan which is conditioned on 

3 maintaining status as being such a student. 

4 ‘‘(3) INTEGRATION OF PLANS AND AC5 COUNTS.—For purposes of this subsection, an ac6 count shall be treated as integrated with an integra7 tion eligible health plan (and such plan shall be 

8 treated as integrated with such account) for any 

9 month if— 

10 ‘‘(A) the employee is the account bene11 ficiary of such account and such employee is 

12 covered under an integration eligible health 

13 plan for such month, 

14 ‘‘(B) the employer verifies that the em15 ployee is so covered by requiring the submission 

16 of documentation to such employer, and 

17 ‘‘(C) the employer makes contributions to 

18 such account for such month which are not less 

19 than the excess (if any) of— 

20 ‘‘(i) the adjusted monthly premiums 

21 for the applicable second lowest cost silver 

22 plan with respect to the taxpayer, over 

‘‘(ii) 1 23 ⁄12 of 9.5 percent of the tax24 payer’s household income (within the 

25 meaning of section 36B). 


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1 ‘‘(4) QUALIFIED CLASS.—For purposes of this 

2 subsection— 

3 ‘‘(A) IN GENERAL.—The term ‘qualified 

4 class’ means only the following: All employees; 

5 Full-time employees; Part-time employees; Sea6 sonal employees; Employees covered under a 

7 collective bargaining agreement; Employees in a 

8 waiting period; Foreign employees who work 

9 abroad; Employees working in the same geo10 graphic location (same insurance rating area, 

11 State, or multi-State region); Salaried workers; 

12 Non-Salaried workers (such as hourly workers); 

13 Temporary employees of staffing firms. 

14 ‘‘(B) RULES RELATED TO CLASS SIZE.— 

15 ‘‘(i) MINIMUM CLASS SIZE.—A class 

16 shall not be treated as a qualified class un17 less in consisting of at least the following 

18 number of employees: 

19 ‘‘(I) In the case of an employer 

20 with fewer than 100 employees, the 

21 lesser of 10 employees or all employ22 ees of the employer. 

23 ‘‘(II) In the case of an employer 

24 with at least 100 and not more than 

25 200 employees, 10 percent of the 


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1 number of such employees (if not a 

2 whole number, rounded down to the 

3 next lowest whole number). 

4 ‘‘(III) In the case of an employer 

5 with more than 200 employees, 20 

6 employees. 

7 ‘‘(ii) COMBINATION OF CLASSES.— 

8 Two or more qualified classes described in 

9 subparagraph (A) may be combined if each 

10 such class separately would not satisfy the 

11 requirement of clause (i). 

12 ‘‘(C) PERMITTED VARIATION WITHIN

13 QUALIFIED CLASSES.—An employer shall not 

14 fail to meet the requirements of paragraph 

15 (1)(D) solely because the amounts offered to 

16 members of a qualified class vary on the basis 

17 of— 

18 ‘‘(i) number of dependents, 

19 ‘‘(ii) age, if such variation based on 

20 age does not exceed a ratio of 3:1, and 

21 ‘‘(iii) chronic health condition, if such 

22 variation based on chronic health condition 

23 does not exceed a ratio of 1.2:1. 


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1 ‘‘(5) COORDINATION WITH ACA PROVISIONS.— 

2 In the case of an integration eligible health plan 

3 which is integrated with a health savings account— 

4 ‘‘(A) such plan shall be treated as an eligi5 ble employer-sponsored plan described in sec6 tion 5000A(f)(1)(B), 

7 ‘‘(B) if an individual receives contributions 

8 to such account which are excludible from the 

9 gross income of such individual under this sec10 tion during any taxable year, no credit shall be 

11 allowed under section 36B with respect to such 

12 individual for such taxable year, and 

13 ‘‘(C) for purposes of section 

14 36B(c)(2)(C)(i)(II), the employee’s required 

15 contribution with respect to such plan shall be 

16 treated as being equal to the excess (if any) 

17 of— 

18 ‘‘(i) the adjusted monthly premiums 

19 for the applicable second lowest cost silver 

20 plan with respect to the taxpayer, over 

21 ‘‘(ii) the contributions made the em22 ployer to such health savings account 

23 which are excludible from the gross income 

24 of the employee under this section. 


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1 ‘‘(6) NO CONSTRUCTIVE RECEIPT.—No amount 

2 shall be included in the gross income of any em3 ployee solely because the employee may choose be4 tween the contributions referred to in paragraph (1) 

5 and employer contributions to another health plan of 

6 the employer. 

7 ‘‘(7) SPECIAL RULE FOR DEDUCTION OF EM8 PLOYER CONTRIBUTIONS.—Any employer contribu9 tion to a health savings account, if otherwise allow10 able as a deduction under this chapter, shall be al11 lowed only for the taxable year in which paid. 

12 ‘‘(8) EMPLOYER HEALTH SAVINGS ACCOUNT

13 CONTRIBUTIONS REQUIRED TO BE SHOWN ON RE14 TURN.—Every individual required to file a return 

15 under section 6012 for the taxable year shall include 

16 on such return the aggregate amount contributed by 

17 employers to the health savings accounts of such in18 dividual or such individual’s spouse for such taxable 

19 year. 

20 ‘‘(9) HEALTH SAVINGS ACCOUNT CONTRIBU21 TIONS NOT PART OF COBRA COVERAGE.—Paragraph 

22 (1) shall not apply for purposes of section 4980B. 

23 ‘‘(10) DEFINITIONS.—Terms used in this sub24 section which are also used in section 223 shall have 


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1 the same respective meanings as when used in such 

2 section. 

3 ‘‘(11) REGULATIONS.—The Secretaries of 

4 Treasury, Labor, and Health and Human Services 

5 shall each issue such regulations or other guidance 

6 as may be necessary or appropriate to carry out the 

7 purposes of this subsection, including regulations or 

8 other guidance to— 

9 ‘‘(A) prevent employers from offering plans 

10 integrated with health savings accounts selec11 tively to sicker workers, and 

12 ‘‘(B) establish a safe harbor that helps em13 ployers determine whether contributions to 

14 health savings accounts with respect to which 

15 there is an integrated health plan comply with 

16 affordability requirements under the Patient 

17 Protection and Affordable Care Act and the 

18 amendments made by such Act. 

19 ‘‘(12) CROSS REFERENCE.—For penalty on fail20 ure by employer to make comparable contributions 

21 to the health savings accounts of comparable em22 ployees, see section 4980G.’’. 

23 (2) NONAPPLICATION OF ERISA.—Contributions 

24 by an employer to a health savings account (as de25 fined in section 223 of the Internal Revenue Code of 


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1 1986), and an integration eligible health plan which 

2 is integrated with such account (within the meaning 

3 of such section), shall not be treated as a plan for 

4 purposes of the Employee Retirement Income Secu5 rity Act of 1974 if— 

6 (A) receipt of such contributions by the 

7 employee is voluntary, 

8 (B) the employer does not select or en9 dorse the integration eligible health plan which 

10 is integrated with such account, 

11 (C) no premiums, other than premiums for 

12 the integration eligible health plan which is in13 tegrated with such account, are paid from the 

14 account, 

15 (D) the employer receives no consideration 

16 (money or other benefit) in connection with the 

17 employee selecting or renewing a plan, and 

18 (E) each participant is notified annually 

19 that such contributions and such plan are not 

20 subject to the requirements of such Act. 

21 (c) TERMINATION OF CERTAIN OTHER HEALTH

22 CARE RELATED TAX BENEFITS.— 

23 (1) EXCLUSION LIMITED TO SELF-FUNDED

24 MAJOR MEDICAL PLAN OF EMPLOYERS.—Section 

25 105(b) of such Code is amended by striking ‘‘paid,’’ 


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1 and inserting ‘‘paid under a self-funded major med2 ical plan of the employer’’. 

3 (2) EXCLUSION NOT APPLICABLE TO HEALTH

4 REIMBURSEMENT ARRANGEMENTS.—Section 105(h) 

5 of such Code is amended to read as follows: 

6 ‘‘(h) EXCLUSION NOT APPLICABLE TO HEALTH RE7 IMBURSEMENT ARRANGEMENTS.—Subsection (b) shall 

8 not apply to health reimbursement arrangements.’’. 

9 (3) REPEAL OF EXCLUSIONS FROM INCOME FOR

10 ARCHER MSAS AND FSAS.—Section 106 of such Code 

11 is amended by striking subsection (b), (e) and (g). 

12 (4) TERMINATION OF DEDUCTION FOR CON13 TRIBUTIONS TO ARCHER MSAS.—Section 220(a) of 

14 such Code is amended by adding at the end the fol15 lowing: ‘‘No amount shall be allowed as a deduction 

16 under the preceding sentence for any taxable year 

17 beginning after one year after the date of the enact18 ment of this sentence.’’. 

19 (d) BANKRUPTCY PROTECTIONS.—Section 522 of 

20 title 11, United States Code, is amended by adding at the 

21 end the following new subsection: 

22 ‘‘(r) For purposes of this section, any health savings 

23 account (as described in section 223 of the Internal Rev24 enue Code of 1986) shall be treated in the same manner 


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1 as an individual retirement account described in section 

2 408 of such Code.’’. 

3 (e) ROLLOVER OF FSA, ARCHER MSA, HRA TO

4 HEALTH SAVINGS ACCOUNT.—Notwithstanding any other 

5 provision of law, if the remaining balance in a health flexi6 ble spending arrangement, Archer MSA, or health reim7 bursement arrangement is transferred to a health savings 

8 account before the end of any taxable year ending on or 

9 before one year after the date of the enactment of this 

10 Act, such transfer shall be treated as a rollover to the 

11 health savings account under section 223(f)(5) of the In12 ternal Revenue Code of 1986 and the distribution from 

13 the health flexible spending arrangement, Archer MSA, or 

14 health reimbursement arrangement shall not be includible 

15 in gross income. 

16 (f) EFFECTIVE DATES.— 

17 (1) IN GENERAL.—The amendments made by 

18 subsections (a) and (b) shall apply to taxable years 

19 beginning after the date of the enactment of this 

20 Act. 

21 (2) TERMINATION OF CERTAIN OTHER HEALTH

22 CARE RELATED TAX BENEFITS.—The amendments 

23 made by subsection (c) shall apply to taxable years 

24 beginning after the date which is 1 year after the 

25 date of the enactment of this Act. 


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1 (3) BANKRUPTCY PROTECTIONS.—The amend2 ment made by subsection (d) shall apply to cases 

3 commencing under title 11, United States Code, 

4 after the date of the enactment of this Act. 

5 SEC. 102. UNUSED PREMIUM TAX CREDITS MAY BE DEPOS6 ITED IN HEALTH SAVINGS ACCOUNTS. 

7 (a) IN GENERAL.—Section 36B is amended by redes8 ignating subsection (h) as subsection (i) and by inserting 

9 after subsection (g) the following new subsection: 

10 ‘‘(h) EXCESS CREDIT MAY BE DEPOSITED INTO A

11 HEALTH SAVINGS ACCOUNT.— 

12 ‘‘(1) IN GENERAL.—If the amount described in 

13 subparagraph (B) of subsection (b)(2) exceeds the 

14 amount described in subparagraph (A) of such sub15 section with respect to any coverage month and an 

16 election under paragraph (2) is in effect with respect 

17 to the applicable taxpayer, the Secretary shall de18 posit such excess into a health savings account of 

19 such taxpayer. 

20 ‘‘(2) ELECTION TO DEPOSIT EXCESS CREDIT

21 INTO A HEALTH SAVINGS ACCOUNT.—A taxpayer 

22 may elect (at such time and in such manner as the 

23 Secretary may provide) to have the Secretary deposit 

24 the excess described in paragraph (1) into a health 

25 savings account of the taxpayer. Any such election 


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1 shall only be treated as being in effect if the tax2 payer provides the Secretary with such information 

3 as the Secretary may require to allow the Secretary 

4 to make such deposit. 

5 ‘‘(3) COORDINATION WITH HEALTH SAVINGS

6 ACCOUNT RULES.—Any amount deposited in a 

7 health savings account by the Secretary under this 

8 subsection shall— 

9 ‘‘(A) be includible in the gross income of 

10 the applicable taxpayer, and 

11 ‘‘(B) be taken into account as an amount 

12 paid to such account for purposes of this sec13 tion. 

14 ‘‘(4) TREATMENT OF DEPOSITS.—For purposes 

15 of section 1324 of title 31, United States Code, any 

16 deposit made under this subsection shall be treated 

17 as a credit allowed under this section.’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to taxable years beginning after 

20 the date of the enactment of this Act. 

21 SEC. 103. HEALTH REIMBURSEMENT ARRANGEMENTS AND 

22 OTHER ACCOUNT-BASED GROUP HEALTH 

23 PLANS. 

24 The rule published by the Internal Revenue Service, 

25 the Employee Benefits Security Administration, and the 


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1 Health and Human Services Department relating to 

2 ‘‘Health Reimbursement Arrangements and Other Ac3 count-Based Group Health Plans’’ (June 20, 2019) shall 

4 have the force and effect of law. Health Reimbursement 

5 Arrangements as described in this rule are subject to all 

6 sections in this title. 

7 SEC. 104. COST-SHARING REDUCTION PAYMENTS AS ELIGI8 BLE CONTRIBUTIONS. 

9 (a) ALTERNATIVE WAIVER FOR STATE INNOVA10 TION.—Section 1332 of the Patient Protection and Af11 fordable Care Act (42 U.S.C. 18052) is amended by add12 ing at the end the following new subsection: 

13 ‘‘(f) ALTERNATIVE WAIVER FOR STATE INNOVA14 TION.— 

15 ‘‘(1) IN GENERAL.—Notwithstanding any pre16 ceding provision of this section, a State may apply 

17 to the Secretary for the waiver of any requirement 

18 of subsection (a)(2) with respect to health insurance 

19 coverage within that State for plan years beginning 

20 on or after January 1, 2025, if instead of complying 

21 with section 1402 the State provides for the dis22 tribution of funding received under paragraph (2) to 

23 health savings accounts of qualifying individuals 

24 with respect to such State. Such application shall be 

25 filed at such time and in such manner as the SecVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 retary may require, and shall include such informa2 tion as the Secretary may require (including a 10- 

3 year budget plan for such plan that is budget neu4 tral for the Federal Government). 

5 ‘‘(2) PASS-THROUGH FUNDING.—With respect 

6 to a State waiver under paragraph (1), under which, 

7 due to the structure of such waiver, individuals in 

8 the State would not qualify for cost-sharing reduc9 tions under section 1402 for which they would other10 wise be eligible, the Secretary shall provide for an al11 ternative means by which an amount is transferred 

12 to the State equal to the aggregate amount of such 

13 reductions that would have been paid on behalf of 

14 the participants in the Exchanges established under 

15 this title— 

16 ‘‘(A) had the State not received such waiv17 er; 

18 ‘‘(B) had references to ‘eligible insureds’ 

19 under section 1402 referred to ‘qualifying in20 sureds (as defined in section 1332(f))’; 

21 ‘‘(C) had, after application of clause (ii), in 

22 the case of a qualifying insured enrolled in the 

23 bronze level of coverage— 

24 ‘‘(i) the percentages specified in sub25 clauses (I), (II), and (III) of section 


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1 1402(c)(1)(B) were references to 84 per2 cent, 77 percent, and 63 percent, respec3 tively; and 

4 ‘‘(ii) the references in subparagraphs 

5 (A), (B), and (C) of section 1402(c)(2) to 

6 94 percent, 87 percent, and 73 percent, re7 spectively, were references to 84 percent, 

8 77 percent, and 63 percent, respectively; 

9 and 

10 ‘‘(D) had, after application of clause (ii), 

11 in the case of a qualifying insured enrolled in 

12 the copper level of coverage— 

13 ‘‘(i) the percentages specified in sub14 clauses (I), (II), and (III) of section 

15 1402(c)(1)(B) were references to 74 per16 cent, 67 percent, and 53 percent, respec17 tively; and 

18 ‘‘(ii) the references in subparagraphs 

19 (A), (B), and (C) of section 1402(c)(2) to 

20 94 percent, 87 percent, and 73 percent, re21 spectively, were references to 74 percent, 

22 67 percent, and 53 percent, respectively. 

23 The amount transferred pursuant to the previous 

24 sentence shall be determined annually by the Sec25 retary, taking into consideration the experience of 


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1 other States with respect to participation in an Ex2 change and reductions provided under such provi3 sions to residents of the other States, and shall be 

4 paid to the State for purposes of implementing such 

5 waiver. 

6 ‘‘(3) WAIVER CONSIDERATION AND TRANS7 PARENCY.—The provisions of paragraph (4) of sub8 section (a) shall apply to an application for a waiver 

9 under paragraph (1) in the same manner as such 

10 provisions apply with respect to an application for a 

11 waiver under subsection (a)(1), except that, for pur12 poses of this paragraph, the provisions of subsection 

13 (a)(4)(B)(ii) shall not apply. 

14 ‘‘(4) DETERMINATIONS; TERM OF WAIVER.— 

15 The provisions of subsections (d) and (e) shall apply 

16 with respect to a determination with respect to an 

17 application under paragraph (1), and with respect to 

18 the term of a waiver under such paragraph, in the 

19 same manner as such provisions apply with respect 

20 to a determination with respect to an application 

21 under subsection (a)(1), and with respect to the 

22 term of a waiver under such subsection. 

23 ‘‘(5) DEFINITIONS.—For purposes of this sub24 section: 


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1 ‘‘(A) HEALTH SAVINGS ACCOUNT.—The 

2 term ‘health savings account’ has the meaning 

3 given such term in section 223 of the Internal 

4 Revenue Code of 1986. 

5 ‘‘(B) QUALIFYING INSURED.—The term 

6 ‘qualifying insured’ means, with respect to a 

7 State and a year, an individual— 

8 ‘‘(i) who is enrolled in a health sav9 ings account; 

10 ‘‘(ii) who is enrolled for such year in 

11 a silver, bronze, or copper level coverage 

12 offered through an Exchange; and 

13 ‘‘(iii) whose household income is not 

14 more than 250 percent of the Federal pov15 erty line for a family of the size involved.’’. 

16 (b) ADDITIONAL AMENDMENTS.—Section 1402 of 

17 the Patient Protection and Affordable Care Act (42 

18 U.S.C. 18071) is amended by striking ‘‘not less than 100 

19 percent but’’ and ‘‘exceeds 100 percent but’’ and ‘‘more 

20 than 100 percent but’’ each place such phrases appear. 

21 (c) CONFORMING AMENDMENTS.—Section 1332 of 

22 the Patient Protection and Affordable Care Act (42 

23 U.S.C. 18052), as amended by subsection (a), is further 

24 amended in subsection (a)(4)— 


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1 (1) in subparagraph (A) by striking the period 

2 and inserting ‘‘, except in the case of a waiver de3 scribed in subsection (f).’’; and 

4 (2) in subparagraph (B)(ii) by inserting after 

5 ‘‘an application’’ the following: ‘‘(except in the case 

6 of a waiver described in subsection (f))’’. 

7 (d) APPROPRIATION FOR COST-SHARING PAY8 MENTS.—Section 1402 of the Patient Protection and Af9 fordable Care Act (42 U.S.C. 18071) is amended by add10 ing at the end the following new subsection: 

11 ‘‘(g) FUNDING.— 

12 ‘‘(1) APPROPRIATIONS.—Out of any funds in 

13 the Treasury not otherwise appropriated, there is 

14 appropriated such sums as may be necessary to, 

15 subject to paragraph (2), provide health benefits 

16 coverage through payment to issuers (under this sec17 tion or through advance payment by the Secretary 

18 of the Treasury under section 1412(c)(3)) of the 

19 amounts computed under this section for each of 

20 plan years 2025 through 2029. 

21 ‘‘(2) ADJUSTMENTS.—Notwithstanding any 

22 other provision of law, payments and other actions 

23 for adjustments to obligations incurred prior to De24 cember 31, 2025, may be made through December 

25 31, 2023. 


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1 ‘‘(3) LIMITATION.—Amounts appropriated 

2 under paragraph (1) for each of plan years 2025 

3 through 2029 are subject to the requirements and 

4 limitations under sections 506 and 507 of division H 

5 of Public Law 115–31 in the same manner and to 

6 the same extent as if such amounts for each such 

7 year were appropriated under such division.’’. 

8 SEC. 105. DIRECT PRIMARY CARE. 

9 (a) IN GENERAL.—Section 223(c)(1) of the Internal 

10 Revenue Code of 1986 is amended by adding at the end 

11 the following new subparagraph: 

12 ‘‘(D) TREATMENT OF DIRECT PRIMARY

13 CARE SERVICE ARRANGEMENTS.— 

14 ‘‘(i) IN GENERAL.—A direct primary 

15 care service arrangement shall not be 

16 treated as a health plan for purposes of 

17 subparagraph (A)(ii). 

18 ‘‘(ii) DIRECT PRIMARY CARE SERVICE

19 ARRANGEMENT.—For purposes of this 

20 paragraph— 

21 ‘‘(I) IN GENERAL.—The term ‘di22 rect primary care service arrange23 ment’ means, with respect to any indi24 vidual, an arrangement under which 

25 such individual is provided medical 


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1 care (as defined in section 213(d)) 

2 consisting solely of primary care serv3 ices provided by primary care practi4 tioners (as defined in section 

5 1833(x)(2)(A) of the Social Security 

6 Act, determined without regard to 

7 clause (ii) thereof), if the sole com8 pensation for such care is a fixed peri9 odic fee. 

10 ‘‘(II) LIMITATION.—With respect 

11 to any individual for any month, such 

12 term shall not include any arrange13 ment if the aggregate fees for all di14 rect primary care service arrange15 ments (determined without regard to 

16 this subclause) with respect to such 

17 individual for such month exceed 

18 $150 (twice such dollar amount in the 

19 case of an individual with any direct 

20 primary care service arrangement (as 

21 so determined) that covers more than 

22 one individual). 

23 ‘‘(iii) CERTAIN SERVICES SPECIFI24 CALLY EXCLUDED FROM TREATMENT AS

25 PRIMARY CARE SERVICES.—For purposes 


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1 of this paragraph, the term ‘primary care 

2 services’ shall not include— 

3 ‘‘(I) procedures that require the 

4 use of general anesthesia, and 

5 ‘‘(II) laboratory services not typi6 cally administered in an ambulatory 

7 primary care setting. 

8 The Secretary, after consultation with the 

9 Secretary of Health and Human Services, 

10 shall issue regulations or other guidance 

11 regarding the application of this clause.’’. 

12 (b) DIRECT PRIMARY CARE SERVICE ARRANGEMENT

13 FEES TREATED AS MEDICAL EXPENSES.—Section 

14 223(d)(2)(C) is amended by striking ‘‘or’’ at the end of 

15 clause (iii), by striking the period at the end of clause (iv) 

16 and inserting ‘‘, or’’, and by adding at the end the fol17 lowing new clause: 

18 ‘‘(v) any direct primary care service arrangement.’’. 

19 (c) INFLATION ADJUSTMENT.—Section 223(g)(1) of 

20 such Code is amended— 

21 (1) by inserting ‘‘, (c)(1)(D)(ii)(II),’’ after 

22 ‘‘(b)(2),’’ each place such term appears, and 

23 (2) in subparagraph (B), by inserting ‘‘and 

24 (iii)’’ after ‘‘clause (ii)’’ in clause (i), by striking 

25 ‘‘and’’ at the end of clause (i), by striking the period 


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1 at the end of clause (ii) and inserting ‘‘, and’’, and 

2 by inserting after clause (ii) the following new 

3 clause: 

4 ‘‘(iii) in the case of the dollar amount 

5 in subsection (c)(1)(D)(ii)(II) for taxable 

6 years beginning in calendar years after 

7 2025, calendar year 2024.’’. 

8 (d) REPORTING OF DIRECT PRIMARY CARE SERVICE

9 ARRANGEMENT FEES ON W–2.—Section 6051(a) of such 

10 Code is amended by striking ‘‘and’’ at the end of para11 graph (16), by striking the period at the end of paragraph 

12 (17) and inserting ‘‘, and’’, and by inserting after para13 graph (17) the following new paragraph: 

14 ‘‘(18) in the case of a direct primary care serv15 ice arrangement (as defined in section 

16 223(c)(1)(D)(ii)) which is provided in connection 

17 with employment, the aggregate fees for such ar18 rangement for such employee.’’. 

19 (e) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to months beginning after Decem21 ber 31, 2024, in taxable years ending after such date. 


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1 Subtitle B—Assistance to Health 

2 Savings Accounts 

3 SEC. 111. ONE-TIME APPLICATION OF SAVER’S CREDIT TO 

4 CONTRIBUTIONS TO HEALTH SAVINGS AC5 COUNTS. 

6 (a) IN GENERAL.—In the case of an applicable tax7 able year, contributions to any health savings account of 

8 the taxpayer during such taxable year shall be treated as 

9 a qualified retirement savings contribution for purposes 

10 of section 25B of the Internal Revenue Code of 1986. 

11 (b) APPLICABLE TAXABLE YEAR.—For purposes of 

12 this section, the term ‘‘applicable taxable year’’ means any 

13 taxable year elected by the taxpayer (at such time and 

14 in such manner as the Secretary of the Treasury may pro15 vide) which begins during the 3-year period beginning 1 

16 year after the date of the enactment of this Act. A tax17 payer may not elect not more than 1 applicable taxable 

18 year under this subsection. 

19 SEC. 112. GRANTS FOR HEALTH SAVINGS ACCOUNT ASSIST20 ANCE AND OUTREACH. 

21 (a) IN GENERAL.—The Administrator shall establish 

22 a grant program to provide assistance to eligible entities 

23 to carry out the activities described in subsection (c). 

24 (b) APPLICATION.—An eligible entity shall submit an 

25 application to the Administrator in such time and in such 


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1 manner as the Administrator may require, providing that 

2 such application requires a demonstration of the existence 

3 of a relationship with, or the ability to establish a relation4 ship with, an employer, employee, self-employed indi5 vidual, or consumer eligible to enroll in a health savings 

6 account. 

7 (c) USE OF FUNDS.—An eligible entity receiving a 

8 grant under this section shall use such funds to— 

9 (1) distribute fair and impartial information to 

10 consumers about health savings accounts, including 

11 the availability of such accounts and how such ac12 counts may be utilized; 

13 (2) conduct activities to raise public awareness 

14 of health savings accounts; 

15 (3) facilitate enrollment in health savings ac16 counts; and 

17 (4) refer individuals enrolled in a health savings 

18 account to the appropriate official, organization, or 

19 State agency for the purpose of addressing a com20 plaint, grievance, or other question with respect to 

21 such health savings account. 

22 (d) AMOUNT.—The Administrator may distribute up 

23 to $5,000,000 annually to be divided among grant recipi24 ents under this section. 


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1 (e) REPORT.—Not later than one year after the date 

2 on which the last of the grant periods awarded under this 

3 section ends, the Administrator shall submit a report to 

4 the Congress on the effectiveness of the grants provided 

5 under this section. 

6 (f) DEFINITIONS.—In this section: 

7 (1) ADMINISTRATOR.—The term ‘‘Adminis8 trator’’ means the Administrator of the Centers for 

9 Medicare & Medicaid Services. 

10 (2) CONSUMER.—The term ‘‘consumer’’ means 

11 an individual enrolled in, or seeking to enroll in, a 

12 health savings account. 

13 (3) ELIGIBLE ENTITY.—The term ‘‘eligible enti14 ty’’ includes the following: 

15 (A) A State. 

16 (B) Trade. 

17 (C) Industry. 

18 (D) Professional associations. 

19 (E) Commercial fishing industry organiza20 tions. 

21 (F) Ranching and farming organizations. 

22 (G) Community and consumer-focused 

23 nonprofit groups. 

24 (H) Chambers of commerce. 

25 (I) Unions. 


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1 (J) Small business development centers (as 

2 defined in section 21 of the Small Business Act 

3 (15 U.S.C. 648)). 

4 (K) Other entities capable of carrying out 

5 the activities described under subsection (b). 

6 (4) HEALTH SAVINGS ACCOUNT.—The term 

7 ‘‘health savings account’’ has the meaning given 

8 such term in section 223 of the Internal Revenue 

9 Code of 1986. 

10 (5) STATE.—The term ‘‘State’’ means each of 

11 the several States, the District of Columbia, each 

12 territory and possession of the United States, and 

13 each federally recognized Indian Tribe. 

14 SEC. 113. NEW CORPORATIONS REQUIRED TO USE HEALTH 

15 SAVINGS ACCOUNTS. 

16 Notwithstanding any other provision of law, a cor17 poration incorporated after December 31, 2024, may not 

18 receive tax benefits for offering employees health insur19 ance. The previous sentence shall not apply to health sav20 ings account contributions offered by such a corporation. 

21 SEC. 114. FEDERAL EMPLOYEE HEALTH BENEFITS AND 

22 HEALTH SAVINGS ACCOUNTS. 

23 (a) IN GENERAL.—Section 1312(d)(3)(D) of the Pa24 tient Protection and Affordable Care Act (42 U.S.C. 

25 18032(d)(3)(D)) is amended— 


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1 (1) in the subparagraph heading, by striking 

2 ‘‘MEMBERS OF CONGRESS’’ and inserting ‘‘PRESI3 DENT, VICE PRESIDENT, MEMBERS OF CONGRESS, 

4 AND FEDERAL EMPLOYEES’’; 

5 (2) in clause (i), in the matter preceding sub6 clause (I)— 

7 (A) by striking ‘‘Members of Congress and 

8 congressional staff’’ and inserting ‘‘the Presi9 dent, Vice President, Members of Congress, and 

10 Federal employees’’; and 

11 (B) by striking ‘‘a Member of Congress or 

12 congressional staff’’ and inserting ‘‘the Presi13 dent, the Vice President, a Member of Con14 gress, or a Federal employee’’; and 

15 (3) in clause (ii), by amending subclause (II) to 

16 read as follows: 

17 ‘‘(II) FEDERAL EMPLOYEE.—The 

18 term ‘Federal employee’ means— 

19 ‘‘(aa) an ‘employee’, as such 

20 term is defined in section 2105 of 

21 title 5, United States Code; and 

22 ‘‘(bb) includes an individual 

23 to whom subsection (c) or (f) of 

24 such section 2105 pertains 


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1 (whether or not such individual 

2 satisfies item (aa)).’’. 

3 (b) CONVERSION TO HEALTH SAVINGS ACCOUNTS.— 

4 Each plan offered under chapter 89 of title 5, United 

5 States Code, shall be converted into a health savings ac6 count deposit and funded at the level of the second-least 

7 expensive silver plan available through the Exchange 

8 where the applicable individual resides. 

9 TITLE II—IMPROVING PRIVATE 

10 HEALTH INSURANCE 

11 Subtitle A—Maintaining Protec12 tions for Patients With Pre13 existing Conditions 

14 SEC. 201. GUARANTEED AVAILABILITY OF COVERAGE; PRO15 HIBITING DISCRIMINATION. 

16 (a) IN GENERAL.—Subtitle C of title I of the Health 

17 Insurance Portability and Accountability Act of 1996 

18 (Public Law 104–191) is amended by adding at the end 

19 the following: 

20 ‘‘SEC. 196. GUARANTEED AVAILABILITY OF COVERAGE. 

21 ‘‘(a) GUARANTEED ISSUANCE OF COVERAGE IN THE

22 INDIVIDUAL AND GROUP MARKET.—Subject to sub23 sections (b) through (d), each health insurance issuer that 

24 offers health insurance coverage in the individual or group 


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1 market in a State must accept every employer and indi2 vidual in the State that applies for such coverage. 

3 ‘‘(b) ENROLLMENT.— 

4 ‘‘(1) RESTRICTION.—A health insurance issuer 

5 described in subsection (a) may restrict enrollment 

6 in coverage described in such subsection to open or 

7 special enrollment periods. 

8 ‘‘(2) ESTABLISHMENT.—A health insurance 

9 issuer described in subsection (a) shall, in accord10 ance with the regulations promulgated under para11 graph (3), establish special enrollment periods for 

12 qualifying events (under section 603 of the Em13 ployee Retirement Income Security Act of 1974). 

14 ‘‘(3) REGULATIONS.—The Secretary shall pro15 mulgate regulations with respect to enrollment peri16 ods under paragraphs (1) and (2). 

17 ‘‘(c) SPECIAL RULES FOR NETWORK PLANS.— 

18 ‘‘(1) IN GENERAL.—In the case of a health in19 surance issuer that offers health insurance coverage 

20 in the group and individual market through a net21 work plan, the issuer may— 

22 ‘‘(A) limit the employers that may apply 

23 for such coverage to those with eligible individ24 uals who live, work, or reside in the service area 

25 for such network plan; and 


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1 ‘‘(B) within the service area of such plan, 

2 deny such coverage to such employers and indi3 viduals if the issuer has demonstrated, if re4 quired, to the applicable State authority that— 

5 ‘‘(i) it will not have the capacity to de6 liver services adequately to enrollees of any 

7 additional groups or any additional individ8 uals because of its obligations to existing 

9 group contract holders and enrollees; and 

10 ‘‘(ii) it is applying this paragraph uni11 formly to all employers and individuals 

12 without regard to the claims experience of 

13 those individuals, employers and their em14 ployees (and their dependents), or any 

15 health status-related factor relating to 

16 such individuals, employees, and depend17 ents. 

18 ‘‘(2) 180-DAY SUSPENSION UPON DENIAL OF

19 COVERAGE.—An issuer, upon denying health insur20 ance coverage in any service area in accordance with 

21 paragraph (1)(B), may not offer coverage in the 

22 group or individual market within such service area 

23 for a period of 180 days after the date such cov24 erage is denied. 


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1 ‘‘(d) APPLICATION OF FINANCIAL CAPACITY LIM2 ITS.— 

3 ‘‘(1) IN GENERAL.—A health insurance issuer 

4 may deny health insurance coverage in the group or 

5 individual market if the issuer has demonstrated, if 

6 required, to the applicable State authority that— 

7 ‘‘(A) it does not have the financial reserves 

8 necessary to underwrite additional coverage; 

9 and 

10 ‘‘(B) it is applying this paragraph uni11 formly to all employers and individuals in the 

12 group or individual market in the State con13 sistent with applicable State law and without 

14 regard to the claims experience of those individ15 uals, employers and their employees (and their 

16 dependents) or any health status-related factor 

17 relating to such individuals, employees, and de18 pendents. 

19 ‘‘(2) 180-DAY SUSPENSION UPON DENIAL OF

20 COVERAGE.—A health insurance issuer upon denying 

21 health insurance coverage in connection with group 

22 health plans in accordance with paragraph (1) in a 

23 State may not offer coverage in connection with 

24 group health plans in the group or individual market 

25 in the State for a period of 180 days after the date 


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1 such coverage is denied or until the issuer has dem2 onstrated to the applicable State authority, if re3 quired under applicable State law, that the issuer 

4 has sufficient financial reserves to underwrite addi5 tional coverage, whichever is later. An applicable 

6 State authority may provide for the application of 

7 this subsection on a service-area-specific basis. 

8 ‘‘(e) DEFINITIONS.—In this section and in sections 

9 197 through 199A: 

10 ‘‘(1) The term ‘Secretary’ means the Secretary 

11 of Health and Human Services. 

12 ‘‘(2) The terms ‘genetic information’, ‘genetic 

13 test’, ‘group health plan’, ‘group market’, ‘health in14 surance coverage’, ‘health insurance issuer’, ‘group 

15 health insurance coverage’, ‘individual health insur16 ance coverage’, ‘individual market’, and ‘under17 writing purpose’ have the meanings given such terms 

18 in section 2791 of the Public Health Service Act. 

19 ‘‘SEC. 197. FAIR HEALTH INSURANCE PREMIUMS. 

20 ‘‘(a) PROHIBITING DISCRIMINATORY PREMIUM

21 RATES.— 

22 ‘‘(1) IN GENERAL.—With respect to the pre23 mium rate charged by a health insurance issuer for 

24 health insurance coverage offered in the individual 

25 or small group market— 


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1 ‘‘(A) such rate shall vary with respect to 

2 the particular plan or coverage involved only 

3 by— 

4 ‘‘(i) whether such plan or coverage 

5 covers an individual or family; 

6 ‘‘(ii) rating area, as established in ac7 cordance with paragraph (2); 

8 ‘‘(iii) age, except that such rate shall 

9 not vary by more than 5 to 1 for adults; 

10 and 

11 ‘‘(iv) tobacco use, except that such 

12 rate shall not vary by more than 1.5 to 1; 

13 and 

14 ‘‘(B) such rate shall not vary with respect 

15 to the particular plan or coverage involved by 

16 any other factor not described in subparagraph 

17 (A). 

18 ‘‘(2) RATING AREA.— 

19 ‘‘(A) IN GENERAL.—Each State shall es20 tablish 1 or more rating areas within that State 

21 for purposes of applying the requirements of 

22 this title. 

23 ‘‘(B) SECRETARIAL REVIEW.—The Sec24 retary shall review the rating areas established 

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1 sure the adequacy of such areas for purposes of 

2 carrying out the requirements of this title. If 

3 the Secretary determines a State’s rating areas 

4 are not adequate, or that a State does not es5 tablish such areas, the Secretary may establish 

6 rating areas for that State. 

7 ‘‘(3) PERMISSIBLE AGE BANDS.—The Sec8 retary, in consultation with the National Association 

9 of Insurance Commissioners, shall define the permis10 sible age bands for rating purposes under paragraph 

11 (1)(A)(iii). 

12 ‘‘(4) APPLICATION OF VARIATIONS BASED ON

13 AGE OR TOBACCO USE.—With respect to family cov14 erage under a group health plan or health insurance 

15 coverage, the rating variations permitted under 

16 clauses (iii) and (iv) of paragraph (1)(A) shall be 

17 applied based on the portion of the premium that is 

18 attributable to each family member covered under 

19 the plan or coverage. 

20 ‘‘SEC. 198. PROHIBITING DISCRIMINATION AGAINST INDI21 VIDUAL PARTICIPANTS AND BENEFICIARIES 

22 BASED ON HEALTH STATUS. 

23 ‘‘(a) IN GENERAL.—A group health plan and a health 

24 insurance issuer offering group or individual health insur25 ance coverage may not establish rules for eligibility (inVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 cluding continued eligibility) of any individual to enroll 

2 under the terms of the plan or coverage based on any of 

3 the following health status-related factors in relation to 

4 the individual or a dependent of the individual: 

5 ‘‘(1) Health status. 

6 ‘‘(2) Medical condition (including both physical 

7 and mental illnesses). 

8 ‘‘(3) Claims experience. 

9 ‘‘(4) Receipt of health care. 

10 ‘‘(5) Medical history. 

11 ‘‘(6) Genetic information. 

12 ‘‘(7) Evidence of insurability (including condi13 tions arising out of acts of domestic violence). 

14 ‘‘(8) Disability. 

15 ‘‘(9) Any other health status-related factor de16 termined appropriate by the Secretary. 

17 ‘‘(b) IN PREMIUM CONTRIBUTIONS.— 

18 ‘‘(1) IN GENERAL.—A group health plan, and a 

19 health insurance issuer offering group or individual 

20 health insurance coverage, may not require any indi21 vidual (as a condition of enrollment or continued en22 rollment under the plan) to pay a premium or con23 tribution which is greater than such premium or 

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1 related factor in relation to the individual or to an 

2 individual enrolled under the plan as a dependent of 

3 the individual. 

4 ‘‘(2) CONSTRUCTION.—Nothing in paragraph 

5 (1) shall be construed— 

6 ‘‘(A) to restrict the amount that an em7 ployer or individual may be charged for cov8 erage under a group health plan except as pro9 vided in paragraph (3) or individual health cov10 erage, as the case may be; or 

11 ‘‘(B) to prevent a group health plan, and 

12 a health insurance issuer offering group health 

13 insurance coverage, from establishing premium 

14 discounts or rebates or modifying otherwise ap15 plicable copayments or deductibles in return for 

16 adherence to programs of health promotion and 

17 disease prevention. 

18 ‘‘(3) NO GROUP-BASED DISCRIMINATION ON

19 BASIS OF GENETIC INFORMATION.— 

20 ‘‘(A) IN GENERAL.—For purposes of this 

21 section, a group health plan, and health insur22 ance issuer offering group health insurance cov23 erage in connection with a group health plan, 

24 may not adjust premium or contribution 


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1 amounts for the group covered under such plan 

2 on the basis of genetic information. 

3 ‘‘(B) RULE OF CONSTRUCTION.—Nothing 

4 in subparagraph (A) or in paragraphs (1) and 

5 (2) of subsection (d) shall be construed to limit 

6 the ability of a health insurance issuer offering 

7 group or individual health insurance coverage to 

8 increase the premium for an employer based on 

9 the manifestation of a disease or disorder of an 

10 individual who is enrolled in the plan. In such 

11 case, the manifestation of a disease or disorder 

12 in one individual cannot also be used as genetic 

13 information about other group members and to 

14 further increase the premium for the employer. 

15 ‘‘(c) GENETIC TESTING.— 

16 ‘‘(1) LIMITATION ON REQUESTING OR REQUIR17 ING GENETIC TESTING.—A group health plan, and a 

18 health insurance issuer offering health insurance 

19 coverage in connection with a group health plan, 

20 shall not request or require an individual or a family 

21 member of such individual to undergo a genetic test. 

22 ‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 

23 shall not be construed to limit the authority of a 

24 health care professional who is providing health care 


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1 services to an individual to request that such indi2 vidual undergo a genetic test. 

3 ‘‘(3) RULE OF CONSTRUCTION REGARDING PAY4 MENT.— 

5 ‘‘(A) IN GENERAL.—Nothing in paragraph 

6 (1) shall be construed to preclude a group 

7 health plan, or a health insurance issuer offer8 ing health insurance coverage in connection 

9 with a group health plan, from obtaining and 

10 using the results of a genetic test in making a 

11 determination regarding payment (as such term 

12 is defined for the purposes of applying the regu13 lations promulgated by the Secretary under 

14 part C of title XI of the Social Security Act and 

15 section 264 of this Act, as may be revised from 

16 time to time) consistent with subsection (a). 

17 ‘‘(B) LIMITATION.—For purposes of sub18 paragraph (A), a group health plan, or a health 

19 insurance issuer offering health insurance cov20 erage in connection with a group health plan, 

21 may request only the minimum amount of in22 formation necessary to accomplish the intended 

23 purpose. 

24 ‘‘(4) RESEARCH EXCEPTION.—Notwithstanding 

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1 surance issuer offering health insurance coverage in 

2 connection with a group health plan, may request, 

3 but not require, that a participant or beneficiary un4 dergo a genetic test if each of the following condi5 tions is met: 

6 ‘‘(A) The request is made pursuant to re7 search that complies with part 46 of title 45, 

8 Code of Federal Regulations, or equivalent Fed9 eral regulations, and any applicable State or 

10 local law or regulations for the protection of 

11 human subjects in research. 

12 ‘‘(B) The plan or issuer clearly indicates to 

13 each participant or beneficiary, or in the case of 

14 a minor child, to the legal guardian of such 

15 beneficiary, to whom the request is made that— 

16 ‘‘(i) compliance with the request is 

17 voluntary; and 

18 ‘‘(ii) noncompliance will have no effect 

19 on enrollment status or premium or con20 tribution amounts. 

21 ‘‘(C) No genetic information collected or 

22 acquired under this paragraph shall be used for 

23 underwriting purposes. 

24 ‘‘(D) The plan or issuer notifies the Sec25 retary in writing that the plan or issuer is conVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 ducting activities pursuant to the exception pro2 vided for under this paragraph, including a de3 scription of the activities conducted. 

4 ‘‘(E) The plan or issuer complies with such 

5 other conditions as the Secretary may by regu6 lation require for activities conducted under this 

7 paragraph. 

8 ‘‘(d) PROHIBITION ON COLLECTION OF GENETIC IN9 FORMATION.— 

10 ‘‘(1) IN GENERAL.—A group health plan, and a 

11 health insurance issuer offering health insurance 

12 coverage in connection with a group health plan, 

13 shall not request, require, or purchase genetic infor14 mation for underwriting purposes. 

15 ‘‘(2) PROHIBITION ON COLLECTION OF GE16 NETIC INFORMATION PRIOR TO ENROLLMENT.—A 

17 group health plan, and a health insurance issuer of18 fering health insurance coverage in connection with 

19 a group health plan, shall not request, require, or 

20 purchase genetic information with respect to any in21 dividual prior to such individual’s enrollment under 

22 the plan or coverage in connection with such enroll23 ment. 

24 ‘‘(3) INCIDENTAL COLLECTION.—If a group 

25 health plan, or a health insurance issuer offering 


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1 health insurance coverage in connection with a group 

2 health plan, obtains genetic information incidental to 

3 the requesting, requiring, or purchasing of other in4 formation concerning any individual, such request, 

5 requirement, or purchase shall not be considered a 

6 violation of paragraph (2) if such request, require7 ment, or purchase is not in violation of paragraph 

8 (1). 

9 ‘‘(e) GENETIC INFORMATION OF A FETUS OR EM10 BRYO.—Any reference in this part to genetic information 

11 concerning an individual or family member of an indi12 vidual shall— 

13 ‘‘(1) with respect to such an individual or fam14 ily member of an individual who is a pregnant 

15 woman, include genetic information of any fetus car16 ried by such pregnant woman; and 

17 ‘‘(2) with respect to an individual or family 

18 member utilizing an assisted reproductive tech19 nology, include genetic information of any embryo le20 gally held by the individual or family member. 

21 ‘‘(f) PROGRAMS OF HEALTH PROMOTION OR DIS22 EASE PREVENTION.— 

23 ‘‘(1) GENERAL PROVISIONS.— 

24 ‘‘(A) GENERAL RULE.—For purposes of 

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1 motion or disease prevention (referred to in this 

2 subsection as a ‘wellness program’) shall be a 

3 program offered by an employer that is de4 signed to promote health or prevent disease 

5 that meets the applicable requirements of this 

6 subsection. 

7 ‘‘(B) NO CONDITIONS BASED ON HEALTH

8 STATUS FACTOR.—If none of the conditions for 

9 obtaining a premium discount or rebate or 

10 other reward for participation in a wellness pro11 gram is based on an individual satisfying a 

12 standard that is related to a health status fac13 tor, such wellness program shall not violate this 

14 section if participation in the program is made 

15 available to all similarly situated individuals 

16 and the requirements of paragraph (2) are com17 plied with. 

18 ‘‘(C) CONDITIONS BASED ON HEALTH STA19 TUS FACTOR.—If any of the conditions for ob20 taining a premium discount or rebate or other 

21 reward for participation in a wellness program 

22 is based on an individual satisfying a standard 

23 that is related to a health status factor, such 

24 wellness program shall not violate this section if 


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1 the requirements of paragraph (3) are complied 

2 with. 

3 ‘‘(2) WELLNESS PROGRAMS NOT SUBJECT TO

4 REQUIREMENTS.—If none of the conditions for ob5 taining a premium discount or rebate or other re6 ward under a wellness program as described in para7 graph (1)(B) are based on an individual satisfying 

8 a standard that is related to a health status factor 

9 (or if such a wellness program does not provide such 

10 a reward), the wellness program shall not violate 

11 this section if participation in the program is made 

12 available to all similarly situated individuals. The 

13 following programs shall not have to comply with the 

14 requirements of paragraph (3) if participation in the 

15 program is made available to all similarly situated 

16 individuals: 

17 ‘‘(A) A program that reimburses all or 

18 part of the cost for memberships in a fitness 

19 center. 

20 ‘‘(B) A diagnostic testing program that 

21 provides a reward for participation and does 

22 not base any part of the reward on outcomes. 

23 ‘‘(C) A program that encourages preven24 tive care related to a health condition through 

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1 quirement under a group health plan for the 

2 costs of certain items or services related to a 

3 health condition (such as prenatal care or well4 baby visits). 

5 ‘‘(D) A program that reimburses individ6 uals for the costs of smoking cessation pro7 grams without regard to whether the individual 

8 quits smoking. 

9 ‘‘(E) A program that provides a reward to 

10 individuals for attending a periodic health edu11 cation seminar. 

12 ‘‘(3) WELLNESS PROGRAMS SUBJECT TO RE13 QUIREMENTS.—If any of the conditions for obtaining 

14 a premium discount, rebate, or reward under a 

15 wellness program as described in paragraph (1)(C) 

16 is based on an individual satisfying a standard that 

17 is related to a health status factor, the wellness pro18 gram shall not violate this section if the following re19 quirements are complied with: 

20 ‘‘(A) The reward for the wellness program, 

21 together with the reward for other wellness pro22 grams with respect to the plan that requires 

23 satisfaction of a standard related to a health 

24 status factor, shall not exceed 30 percent of the 

25 cost of employee-only coverage under the plan. 


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1 If, in addition to employees or individuals, any 

2 class of dependents (such as spouses or spouses 

3 and dependent children) may participate fully 

4 in the wellness program, such reward shall not 

5 exceed 30 percent of the cost of the coverage in 

6 which an employee or individual and any de7 pendents are enrolled. For purposes of this 

8 paragraph, the cost of coverage shall be deter9 mined based on the total amount of employer 

10 and employee contributions for the benefit 

11 package under which the employee is (or the 

12 employee and any dependents are) receiving 

13 coverage. A reward may be in the form of a dis14 count or rebate of a premium or contribution, 

15 a waiver of all or part of a cost-sharing mecha16 nism (such as deductibles, copayments, or coin17 surance), the absence of a surcharge, or the 

18 value of a benefit that would otherwise not be 

19 provided under the plan. The Secretaries of 

20 Labor, Health and Human Services, and the 

21 Treasury may increase the reward available 

22 under this subparagraph to up to 50 percent of 

23 the cost of coverage if the Secretaries determine 

24 that such an increase is appropriate. 


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1 ‘‘(B) The wellness program shall be rea2 sonably designed to promote health or prevent 

3 disease. A program complies with the preceding 

4 sentence if the program has a reasonable 

5 chance of improving the health of, or preventing 

6 disease in, participating individuals and it is 

7 not overly burdensome, is not a subterfuge for 

8 discriminating based on a health status factor, 

9 and is not highly suspect in the method chosen 

10 to promote health or prevent disease. 

11 ‘‘(C) The plan shall give individuals eligible 

12 for the program the opportunity to qualify for 

13 the reward under the program at least once 

14 each year. 

15 ‘‘(D) The full reward under the wellness 

16 program shall be made available to all similarly 

17 situated individuals. For such purpose, among 

18 other things: 

19 ‘‘(i) The reward is not available to all 

20 similarly situated individuals for a period 

21 unless the wellness program allows— 

22 ‘‘(I) for a reasonable alternative 

23 standard (or waiver of the otherwise 

24 applicable standard) for obtaining the 

25 reward for any individual for whom, 


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1 for that period, it is unreasonably dif2 ficult due to a medical condition to 

3 satisfy the otherwise applicable stand4 ard; and 

5 ‘‘(II) for a reasonable alternative 

6 standard (or waiver of the otherwise 

7 applicable standard) for obtaining the 

8 reward for any individual for whom, 

9 for that period, it is medically inadvis10 able to attempt to satisfy the other11 wise applicable standard. 

12 ‘‘(ii) If reasonable under the cir13 cumstances, the plan or issuer may seek 

14 verification, such as a statement from an 

15 individual’s physician, that a health status 

16 factor makes it unreasonably difficult or 

17 medically inadvisable for the individual to 

18 satisfy or attempt to satisfy the otherwise 

19 applicable standard. 

20 ‘‘(E) The plan or issuer involved shall dis21 close in all plan materials describing the terms 

22 of the wellness program the availability of a 

23 reasonable alternative standard (or the possi24 bility of waiver of the otherwise applicable 

25 standard) required under subparagraph (D). If 


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1 plan materials disclose that such a program is 

2 available, without describing its terms, the dis3 closure under this subparagraph shall not be re4 quired. 

5 ‘‘SEC. 199. PROHIBITION OF PREEXISTING CONDITION EX6 CLUSIONS OR OTHER DISCRIMINATION 

7 BASED ON HEALTH STATUS. 

8 ‘‘(a) IN GENERAL.—A group health plan and a health 

9 insurance issuer offering group or individual health insur10 ance coverage may not impose any preexisting condition 

11 exclusion with respect to such plan or coverage. 

12 ‘‘(b) DEFINITIONS.—For purposes of this section— 

13 ‘‘(1) PREEXISTING CONDITION EXCLUSION.— 

14 ‘‘(A) IN GENERAL.—The term ‘preexisting 

15 condition exclusion’ means, with respect to cov16 erage, a limitation or exclusion of benefits relat17 ing to a condition based on the fact that the 

18 condition was present before the date of enroll19 ment for such coverage, whether or not any 

20 medical advice, diagnosis, care, or treatment 

21 was recommended or received before such date. 

22 ‘‘(B) TREATMENT OF GENETIC INFORMA23 TION.—Genetic information shall not be treated 

24 as a condition described in subsection (a)(1) in 


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1 the absence of a diagnosis of the condition re2 lated to such information. 

3 ‘‘(2) ENROLLMENT DATE.—The term ‘enroll4 ment date’ means, with respect to an individual cov5 ered under a group health plan or health insurance 

6 coverage, the date of enrollment of the individual in 

7 the plan or coverage or, if earlier, the first day of 

8 the waiting period for such enrollment. 

9 ‘‘(3) LATE ENROLLEE.—The term ‘late en10 rollee’ means, with respect to coverage under a 

11 group health plan, a participant or beneficiary who 

12 enrolls under the plan other than during— 

13 ‘‘(A) the first period in which the indi14 vidual is eligible to enroll under the plan; or 

15 ‘‘(B) a special enrollment period under 

16 subsection (f). 

17 ‘‘(4) WAITING PERIOD.—The term ‘waiting pe18 riod’ means, with respect to a group health plan and 

19 an individual who is a potential participant or bene20 ficiary in the plan, the period that must pass with 

21 respect to the individual before the individual is eli22 gible to be covered for benefits under the terms of 

23 the plan. 

24 ‘‘(c) RULES RELATING TO CREDITING PREVIOUS

25 COVERAGE.— 


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1 ‘‘(1) CREDITABLE COVERAGE DEFINED.—For 

2 purposes of this title, the term ‘creditable coverage’ 

3 means, with respect to an individual, coverage of the 

4 individual under any of the following: 

5 ‘‘(A) A group health plan. 

6 ‘‘(B) Health insurance coverage. 

7 ‘‘(C) Part A or part B of title XVIII of the 

8 Social Security Act. 

9 ‘‘(D) Title XIX of the Social Security Act, 

10 other than coverage consisting solely of benefits 

11 under section 1928. 

12 ‘‘(E) Chapter 55 of title 10, United States 

13 Code. 

14 ‘‘(F) A medical care program of the Indian 

15 Health Service or of a tribal organization. 

16 ‘‘(G) A State health benefits risk pool. 

17 ‘‘(H) A health plan offered under chapter 

18 89 of title 5, United States Code. 

19 ‘‘(I) A public health plan (as defined in 

20 regulations). 

21 ‘‘(J) A health benefit plan under section 

22 5(e) of the Peace Corps Act (22 U.S.C. 

23 2504(e)). 


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1 Such term does not include coverage consisting sole2 ly of coverage of excepted benefits (as defined in sec3 tion 2791(c)). 

4 ‘‘(2) NOT COUNTING PERIODS BEFORE SIGNIFI5 CANT BREAKS IN COVERAGE.— 

6 ‘‘(A) IN GENERAL.—A period of creditable 

7 coverage shall not be counted, with respect to 

8 enrollment of an individual under a group or in9 dividual health plan, if, after such period and 

10 before the enrollment date, there was a 63-day 

11 period during all of which the individual was 

12 not covered under any creditable coverage. 

13 ‘‘(B) WAITING PERIOD NOT TREATED AS A

14 BREAK IN COVERAGE.—For purposes of sub15 paragraph (A) and subsection (d)(4), any pe16 riod that an individual is in a waiting period for 

17 any coverage under a group or individual health 

18 plan (or for group health insurance coverage) or 

19 is in an affiliation period (as defined in sub20 section (g)(2)) shall not be taken into account 

21 in determining the continuous period under 

22 subparagraph (A). 

23 ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.—In the 

24 case of plan years beginning before January 1, 

25 2014— 


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1 ‘‘(i) TAA PRE-CERTIFICATION PERIOD

2 RULE.—In the case of a TAA-eligible indi3 vidual, the period beginning on the date 

4 the individual has a TAA-related loss of 

5 coverage and ending on the date that is 7 

6 days after the date of the issuance by the 

7 Secretary (or by any person or entity des8 ignated by the Secretary) of a qualified 

9 health insurance costs credit eligibility cer10 tificate for such individual for purposes of 

11 section 7527 of the Internal Revenue Code 

12 of 1986 shall not be taken into account in 

13 determining the continuous period under 

14 subparagraph (A). 

15 ‘‘(ii) DEFINITIONS.—The terms ‘TAA16 eligible individual’ and ‘TAA-related loss of 

17 coverage’ have the meanings given such 

18 terms in section 2205(b)(4). 

19 ‘‘(3) METHOD OF CREDITING COVERAGE.— 

20 ‘‘(A) STANDARD METHOD.—Except as oth21 erwise provided under subparagraph (B), for 

22 purposes of applying subsection (a)(3), a group 

23 health plan, and a health insurance issuer offer24 ing group or individual health insurance cov25 erage, shall count a period of creditable covVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 erage without regard to the specific benefits 

2 covered during the period. 

3 ‘‘(B) ELECTION OF ALTERNATIVE METH4 OD.—A group health plan, or a health insur5 ance issuer offering group or individual health 

6 insurance, may elect to apply subsection (a)(3) 

7 based on coverage of benefits within each of 

8 several classes or categories of benefits specified 

9 in regulations rather than as provided under 

10 subparagraph (A). Such election shall be made 

11 on a uniform basis for all participants and 

12 beneficiaries. Under such election a group or in13 dividual health plan or issuer shall count a pe14 riod of creditable coverage with respect to any 

15 class or category of benefits if any level of bene16 fits is covered within such class or category. 

17 ‘‘(C) PLAN NOTICE.—In the case of an 

18 election with respect to a group health plan 

19 under subparagraph (B) (whether or not health 

20 insurance coverage is provided in connection 

21 with such plan), the plan shall— 

22 ‘‘(i) prominently state in any disclo23 sure statements concerning the plan, and 

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1 ment under the plan, that the plan has 

2 made such election; and 

3 ‘‘(ii) include in such statements a de4 scription of the effect of this election. 

5 ‘‘(D) ISSUER NOTICE.—In the case of an 

6 election under subparagraph (B) with respect to 

7 health insurance coverage offered by an issuer 

8 in the individual or group market, the issuer— 

9 ‘‘(i) shall prominently state in any dis10 closure statements concerning the cov11 erage, and to each employer at the time of 

12 the offer or sale of the coverage, that the 

13 issuer has made such election; and 

14 ‘‘(ii) shall include in such statements 

15 a description of the effect of such election. 

16 ‘‘(4) ESTABLISHMENT OF PERIOD.—Periods of 

17 creditable coverage with respect to an individual 

18 shall be established through presentation of certifi19 cations described in subsection (e) or in such other 

20 manner as may be specified in regulations. 

21 ‘‘(d) EXCEPTIONS.— 

22 ‘‘(1) EXCLUSION NOT APPLICABLE TO CERTAIN

23 NEWBORNS.—Subject to paragraph (4), a group 

24 health plan, and a health insurance issuer offering 

25 group or individual health insurance coverage, may 


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1 not impose any preexisting condition exclusion in the 

2 case of an individual who, as of the last day of the 

3 30-day period beginning with the date of birth, is 

4 covered under creditable coverage. 

5 ‘‘(2) EXCLUSION NOT APPLICABLE TO CERTAIN

6 ADOPTED CHILDREN.—Subject to paragraph (4), a 

7 group health plan, and a health insurance issuer of8 fering group or individual health insurance coverage, 

9 may not impose any preexisting condition exclusion 

10 in the case of a child who is adopted or placed for 

11 adoption before attaining 18 years of age and who, 

12 as of the last day of the 30-day period beginning on 

13 the date of the adoption or placement for adoption, 

14 is covered under creditable coverage. The previous 

15 sentence shall not apply to coverage before the date 

16 of such adoption or placement for adoption. 

17 ‘‘(3) EXCLUSION NOT APPLICABLE TO PREG18 NANCY.—A group health plan, and health insurance 

19 issuer offering group or individual health insurance 

20 coverage, may not impose any preexisting condition 

21 exclusion relating to pregnancy as a preexisting con22 dition. 

23 ‘‘(4) LOSS IF BREAK IN COVERAGE.—Para24 graphs (1) and (2) shall no longer apply to an indi25 vidual after the end of the first 63-day period during 


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1 all of which the individual was not covered under 

2 any creditable coverage. 

3 ‘‘(e) CERTIFICATIONS AND DISCLOSURE OF COV4 ERAGE.— 

5 ‘‘(1) REQUIREMENT FOR CERTIFICATION OF

6 PERIOD OF CREDITABLE COVERAGE.— 

7 ‘‘(A) IN GENERAL.—A group health plan, 

8 and a health insurance issuer offering group or 

9 individual health insurance coverage, shall pro10 vide the certification described in subparagraph 

11 (B)— 

12 ‘‘(i) at the time an individual ceases 

13 to be covered under the plan or otherwise 

14 becomes covered under a COBRA continu15 ation provision; 

16 ‘‘(ii) in the case of an individual be17 coming covered under such a provision, at 

18 the time the individual ceases to be covered 

19 under such provision; and 

20 ‘‘(iii) on the request on behalf of an 

21 individual made not later than 24 months 

22 after the date of cessation of the coverage 

23 described in clause (i) or (ii), whichever is 

24 later. 


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1 The certification under clause (i) may be pro2 vided, to the extent practicable, at a time con3 sistent with notices required under any applica4 ble COBRA continuation provision. 

5 ‘‘(B) CERTIFICATION.—The certification 

6 described in this subparagraph is a written cer7 tification of— 

8 ‘‘(i) the period of creditable coverage 

9 of the individual under such plan and the 

10 coverage (if any) under such COBRA con11 tinuation provision; and 

12 ‘‘(ii) the waiting period (if any) (and 

13 affiliation period, if applicable) imposed 

14 with respect to the individual for any cov15 erage under such plan. 

16 ‘‘(C) ISSUER COMPLIANCE.—To the extent 

17 that medical care under a group health plan 

18 consists of group health insurance coverage, the 

19 plan is deemed to have satisfied the certification 

20 requirement under this paragraph if the health 

21 insurance issuer offering the coverage provides 

22 for such certification in accordance with this 

23 paragraph. 

24 ‘‘(2) DISCLOSURE OF INFORMATION ON PRE25 VIOUS BENEFITS.—In the case of an election deVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 scribed in subsection (c)(3)(B) by a group health 

2 plan or health insurance issuer, if the plan or issuer 

3 enrolls an individual for coverage under the plan and 

4 the individual provides a certification of coverage of 

5 the individual under paragraph (1)— 

6 ‘‘(A) upon request of such plan or issuer, 

7 the entity which issued the certification pro8 vided by the individual shall promptly disclose 

9 to such requesting plan or issuer information 

10 on coverage of classes and categories of health 

11 benefits available under such entity’s plan or 

12 coverage; and 

13 ‘‘(B) such entity may charge the request14 ing plan or issuer for the reasonable cost of dis15 closing such information. 

16 ‘‘(3) REGULATIONS.—The Secretary shall es17 tablish rules to prevent an entity’s failure to provide 

18 information under paragraph (1) or (2) with respect 

19 to previous coverage of an individual from adversely 

20 affecting any subsequent coverage of the individual 

21 under another group health plan or health insurance 

22 coverage. 

23 ‘‘(f) SPECIAL ENROLLMENT PERIODS.— 

24 ‘‘(1) INDIVIDUALS LOSING OTHER COVERAGE.— 

25 A group health plan, and a health insurance issuer 


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1 offering group health insurance coverage in connec2 tion with a group health plan, shall permit an em3 ployee who is eligible, but not enrolled, for coverage 

4 under the terms of the plan (or a dependent of such 

5 an employee if the dependent is eligible, but not en6 rolled, for coverage under such terms) to enroll for 

7 coverage under the terms of the plan if each of the 

8 following conditions is met: 

9 ‘‘(A) The employee or dependent was cov10 ered under a group health plan or had health 

11 insurance coverage at the time coverage was 

12 previously offered to the employee or dependent. 

13 ‘‘(B) The employee stated in writing at 

14 such time that coverage under a group health 

15 plan or health insurance coverage was the rea16 son for declining enrollment, but only if the 

17 plan sponsor or issuer (if applicable) required 

18 such a statement at such time and provided the 

19 employee with notice of such requirement (and 

20 the consequences of such requirement) at such 

21 time. 

22 ‘‘(C) The employee’s or dependent’s cov23 erage described in subparagraph (A)— 


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1 ‘‘(i) was under a COBRA continu2 ation provision and the coverage under 

3 such provision was exhausted; or 

4 ‘‘(ii) was not under such a provision 

5 and either the coverage was terminated as 

6 a result of loss of eligibility for the cov7 erage (including as a result of legal separa8 tion, divorce, death, termination of employ9 ment, or reduction in the number of hours 

10 of employment) or employer contributions 

11 toward such coverage were terminated. 

12 ‘‘(D) Under the terms of the plan, the em13 ployee requests such enrollment not later than 

14 30 days after the date of exhaustion of coverage 

15 described in subparagraph (C)(i) or termination 

16 of coverage or employer contribution described 

17 in subparagraph (C)(ii). 

18 ‘‘(2) FOR DEPENDENT BENEFICIARIES.— 

19 ‘‘(A) IN GENERAL.—If— 

20 ‘‘(i) a group health plan makes cov21 erage available with respect to a dependent 

22 of an individual; 

23 ‘‘(ii) the individual is a participant 

24 under the plan (or has met any waiting pe25 riod applicable to becoming a participant 


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1 under the plan and is eligible to be enrolled 

2 under the plan but for a failure to enroll 

3 during a previous enrollment period); and 

4 ‘‘(iii) a person becomes such a de5 pendent of the individual through mar6 riage, birth, or adoption or placement for 

7 adoption, 

8 the group health plan shall provide for a de9 pendent special enrollment period described in 

10 subparagraph (B) during which the person (or, 

11 if not otherwise enrolled, the individual) may be 

12 enrolled under the plan as a dependent of the 

13 individual, and in the case of the birth or adop14 tion of a child, the spouse of the individual may 

15 be enrolled as a dependent of the individual if 

16 such spouse is otherwise eligible for coverage. 

17 ‘‘(B) DEPENDENT SPECIAL ENROLLMENT

18 PERIOD.—A dependent special enrollment pe19 riod under this subparagraph shall be a period 

20 of not less than 30 days and shall begin on the 

21 later of— 

22 ‘‘(i) the date dependent coverage is 

23 made available; or 

24 ‘‘(ii) the date of the marriage, birth, 

25 or adoption or placement for adoption (as 


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1 the case may be) described in subpara2 graph (A)(iii). 

3 ‘‘(C) NO WAITING PERIOD.—If an indi4 vidual seeks to enroll a dependent during the 

5 first 30 days of such a dependent special enroll6 ment period, the coverage of the dependent 

7 shall become effective— 

8 ‘‘(i) in the case of marriage, not later 

9 than the first day of the first month begin10 ning after the date the completed request 

11 for enrollment is received; 

12 ‘‘(ii) in the case of a dependent’s 

13 birth, as of the date of such birth; or 

14 ‘‘(iii) in the case of a dependent’s 

15 adoption or placement for adoption, the 

16 date of such adoption or placement for 

17 adoption. 

18 ‘‘(3) SPECIAL RULES FOR APPLICATION IN CASE

19 OF MEDICAID AND CHIP.— 

20 ‘‘(A) IN GENERAL.—A group health plan, 

21 and a health insurance issuer offering group 

22 health insurance coverage in connection with a 

23 group health plan, shall permit an employee 

24 who is eligible, but not enrolled, for coverage 

25 under the terms of the plan (or a dependent of 


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1 such an employee if the dependent is eligible, 

2 but not enrolled, for coverage under such 

3 terms) to enroll for coverage under the terms of 

4 the plan if either of the following conditions is 

5 met: 

6 ‘‘(i) TERMINATION OF MEDICAID OR

7 CHIP COVERAGE.—The employee or de8 pendent is covered under a Medicaid plan 

9 under title XIX of the Social Security Act 

10 or under a State child health plan under 

11 title XXI of such Act and coverage of the 

12 employee or dependent under such a plan 

13 is terminated as a result of loss of eligi14 bility for such coverage and the employee 

15 requests coverage under the group health 

16 plan (or health insurance coverage) not 

17 later than 60 days after the date of termi18 nation of such coverage. 

19 ‘‘(ii) ELIGIBILITY FOR EMPLOYMENT

20 ASSISTANCE UNDER MEDICAID OR CHIP.— 

21 The employee or dependent becomes eligi22 ble for assistance, with respect to coverage 

23 under the group health plan or health in24 surance coverage, under such Medicaid 

25 plan or State child health plan (including 


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1 under any waiver or demonstration project 

2 conducted under or in relation to such a 

3 plan), if the employee requests coverage 

4 under the group health plan or health in5 surance coverage not later than 60 days 

6 after the date the employee or dependent is 

7 determined to be eligible for such assist8 ance. 

9 ‘‘(B) COORDINATION WITH MEDICAID AND

10 CHIP.— 

11 ‘‘(i) OUTREACH TO EMPLOYEES RE12 GARDING AVAILABILITY OF MEDICAID AND

13 CHIP COVERAGE.— 

14 ‘‘(I) IN GENERAL.—Each em15 ployer that maintains a group health 

16 plan in a State that provides medical 

17 assistance under a State Medicaid 

18 plan under title XIX of the Social Se19 curity Act, or child health assistance 

20 under a State child health plan under 

21 title XXI of such Act, in the form of 

22 premium assistance for the purchase 

23 of coverage under a group health 

24 plan, shall provide to each employee a 

25 written notice informing the employee 


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1 of potential opportunities then cur2 rently available in the State in which 

3 the employee resides for premium as4 sistance under such plans for health 

5 coverage of the employee or the em6 ployee’s dependents. For purposes of 

7 compliance with this subclause, the 

8 employer may use any State-specific 

9 model notice developed in accordance 

10 with section 701(f)(3)(B)(i)(II) of the 

11 Employee Retirement Income Security 

12 Act of 1974 (29 U.S.C. 

13 1181(f)(3)(B)(i)(II)). 

14 ‘‘(II) OPTION TO PROVIDE CON15 CURRENT WITH PROVISION OF PLAN

16 MATERIALS TO EMPLOYEE.—An em17 ployer may provide the model notice 

18 applicable to the State in which an 

19 employee resides concurrent with the 

20 furnishing of materials notifying the 

21 employee of health plan eligibility, 

22 concurrent with materials provided to 

23 the employee in connection with an 

24 open season or election process con25 ducted under the plan, or concurrent 


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1 with the furnishing of the summary 

2 plan description as provided in section 

3 104(b) of the Employee Retirement 

4 Income Security Act of 1974. 

5 ‘‘(ii) DISCLOSURE ABOUT GROUP

6 HEALTH PLAN BENEFITS TO STATES FOR

7 MEDICAID AND CHIP ELIGIBLE INDIVID8 UALS.—In the case of an enrollee in a 

9 group health plan who is covered under a 

10 Medicaid plan of a State under title XIX 

11 of the Social Security Act or under a State 

12 child health plan under title XXI of such 

13 Act, the plan administrator of the group 

14 health plan shall disclose to the State, 

15 upon request, information about the bene16 fits available under the group health plan 

17 in sufficient specificity, as determined 

18 under regulations of the Secretary of 

19 Health and Human Services in consulta20 tion with the Secretary that require use of 

21 the model coverage coordination disclosure 

22 form developed under section 311(b)(1)(C) 

23 of the Children’s Health Insurance Reau24 thorization Act of 2009, so as to permit 

25 the State to make a determination (under 


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1 paragraph (2)(B), (3), or (10) of section 

2 2105(c) of the Social Security Act or oth3 erwise) concerning the cost-effectiveness of 

4 the State providing medical or child health 

5 assistance through premium assistance for 

6 the purchase of coverage under such group 

7 health plan and in order for the State to 

8 provide supplemental benefits required 

9 under paragraph (10)(E) of such section 

10 or other authority. 

11 ‘‘(g) USE OF AFFILIATION PERIOD BY HMOS AS AL12 TERNATIVE TO PREEXISTING CONDITION EXCLUSION.— 

13 ‘‘(1) IN GENERAL.—A health maintenance orga14 nization which offers health insurance coverage in 

15 connection with a group health plan and which does 

16 not impose any preexisting condition exclusion al17 lowed under subsection (a) with respect to any par18 ticular coverage option may impose an affiliation pe19 riod for such coverage option, but only if— 

20 ‘‘(A) such period is applied uniformly with21 out regard to any health status-related factors; 

22 and 

23 ‘‘(B) such period does not exceed 2 months 

24 (or 3 months in the case of a late enrollee). 

25 ‘‘(2) AFFILIATION PERIOD.— 


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1 ‘‘(A) DEFINED.—For purposes of this 

2 title, the term ‘affiliation period’ means a pe3 riod which, under the terms of the health insur4 ance coverage offered by the health mainte5 nance organization, must expire before the 

6 health insurance coverage becomes effective. 

7 The organization is not required to provide 

8 health care services or benefits during such pe9 riod and no premium shall be charged to the 

10 participant or beneficiary for any coverage dur11 ing the period. 

12 ‘‘(B) BEGINNING.—Such period shall begin 

13 on the enrollment date. 

14 ‘‘(C) RUNS CONCURRENTLY WITH WAITING

15 PERIODS.—An affiliation period under a plan 

16 shall run concurrently with any waiting period 

17 under the plan. 

18 ‘‘(3) ALTERNATIVE METHODS.—A health main19 tenance organization described in paragraph (1) may 

20 use alternative methods, from those described in 

21 such paragraph, to address adverse selection as ap22 proved by the State insurance commissioner or offi23 cial or officials designated by the State to enforce 

24 the requirements of this part for the State involved 

25 with respect to such issuer. 


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1 ‘‘SEC. 199A. EXTENSION OF DEPENDENT COVERAGE. 

2 ‘‘(a) IN GENERAL.—A group health plan and a health 

3 insurance issuer offering group or individual health insur4 ance coverage that provides dependent coverage of chil5 dren shall continue to make such coverage available for 

6 an adult child (who is not married) until the child turns 

7 26 years of age. Nothing in this section shall require a 

8 health plan or a health insurance issuer described in the 

9 preceding sentence to make coverage available for a child 

10 of a child receiving dependent coverage. 

11 ‘‘(b) REGULATIONS.—The Secretary shall promul12 gate regulations to define the dependents to which cov13 erage shall be made available under subsection (a). 

14 ‘‘(c) RULE OF CONSTRUCTION.—Nothing in this sec15 tion shall be construed to modify the definition of ‘depend16 ent’ as used in the Internal Revenue Code of 1986 with 

17 respect to the tax treatment of the cost of coverage. 

18 ‘‘SEC. 199B. ANNUAL LIMITATION ON COST-SHARING. 

19 ‘‘(a) IN GENERAL.— 

20 ‘‘(1) 2014.—The cost-sharing incurred under a 

21 group health plan or group or individual health in22 surance coverage with respect to self-only coverage 

23 or coverage other than self-only coverage for a plan 

24 year beginning in 2014 shall not exceed the dollar 

25 amounts in effect under section 223(c)(2)(A)(ii) of 

26 the Internal Revenue Code of 1986 for self-only and 


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1 family coverage, respectively, for taxable years begin2 ning in 2014. 

3 ‘‘(2) 2015 AND LATER.—In the case of any 

4 plan year beginning in a calendar year after 2014, 

5 the limitation under this paragraph shall— 

6 ‘‘(A) in the case of self-only coverage, be 

7 equal to the dollar amount under paragraph (1) 

8 for self-only coverage for plan years beginning 

9 in 2014, increased by an amount equal to the 

10 product of that amount and the premium ad11 justment percentage under subsection (c) for 

12 the calendar year; and 

13 ‘‘(B) in the case of other coverage, twice 

14 the amount in effect under subparagraph (A). 

15 If the amount of any increase under subparagraph 

16 (A) is not a multiple of $50, such increase shall be 

17 rounded to the next lowest multiple of $50. 

18 ‘‘(b) COST-SHARING.—In this section: 

19 ‘‘(1) IN GENERAL.—The term ‘cost-sharing’ in20 cludes— 

21 ‘‘(A) deductibles, coinsurance, copayments, 

22 or similar charges; and 

23 ‘‘(B) any other expenditure required of an 

24 insured individual which is a qualified medical 

25 expense (within the meaning of section 


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1 223(d)(2) of the Internal Revenue Code of 

2 1986) with respect to essential health benefits 

3 covered under the plan. 

4 ‘‘(2) EXCEPTIONS.—Such term does not include 

5 premiums, balance billing amounts for non-network 

6 providers, or spending for non-covered services. 

7 ‘‘(c) PREMIUM ADJUSTMENT PERCENTAGE.—For 

8 purposes of subsection (a)(2)(A), the premium adjustment 

9 percentage for any calendar year is the percentage (if any) 

10 by which the average per capita premium for health insur11 ance coverage in the United States for the preceding cal12 endar year (as estimated by the Secretary no later than 

13 October 1 of such preceding calendar year) exceeds such 

14 average per capita premium for 2013 (as determined by 

15 the Secretary). 

16 ‘‘SEC. 199C. ENFORCEMENT OF CERTAIN HEALTH INSUR17 ANCE REQUIREMENTS. 

18 ‘‘(a) STATE ENFORCEMENT.— 

19 ‘‘(1) STATE AUTHORITY.—Each State may re20 quire that health insurance issuers that issue, sell, 

21 renew, or offer health insurance coverage in the 

22 State in the individual or group market meet the re23 quirements of this part with respect to such issuers. 

24 ‘‘(2) FAILURE TO IMPLEMENT PROVISIONS.—In 

25 the case of a determination by the Secretary that a 


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1 State has failed to substantially enforce a provision 

2 (or provisions) of sections 196 through 199A with 

3 respect to health insurance issuers in the State, the 

4 Secretary shall enforce such provision (or provisions) 

5 under subsection (b) insofar as they relate to the 

6 issuance, sale, renewal, and offering of health insur7 ance coverage in connection with group health plans 

8 or individual health insurance coverage in such 

9 State. 

10 ‘‘(b) SECRETARIAL ENFORCEMENT AUTHORITY.— 

11 ‘‘(1) LIMITATION.—The provisions of this sub12 section shall apply to enforcement of a provision (or 

13 provisions) described in subsection (a)(2) only— 

14 ‘‘(A) as provided under such subsection; 

15 and 

16 ‘‘(B) with respect to individual health in17 surance coverage or group health plans that are 

18 non-Federal governmental plans. 

19 ‘‘(2) IMPOSITION OF PENALTIES.—In the cases 

20 described in paragraph (1)— 

21 ‘‘(A) IN GENERAL.—Subject to the suc22 ceeding provisions of this subsection, any non23 Federal governmental plan that is a group 

24 health plan and any health insurance issuer 

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1 cable to such plan or issuer is subject to a civil 

2 money penalty under this subsection. 

3 ‘‘(B) LIABILITY FOR PENALTY.—In the 

4 case of a failure by— 

5 ‘‘(i) a health insurance issuer, the 

6 issuer is liable for such penalty; or 

7 ‘‘(ii) a group health plan that is a 

8 non-Federal governmental plan which is— 

9 ‘‘(I) sponsored by 2 or more em10 ployers, the plan is liable for such 

11 penalty; or 

12 ‘‘(II) not so sponsored, the em13 ployer is liable for such penalty. 

14 ‘‘(C) AMOUNT OF PENALTY.— 

15 ‘‘(i) IN GENERAL.—The maximum 

16 amount of penalty imposed under this 

17 paragraph is $100 for each day for each 

18 individual with respect to which such a 

19 failure occurs. 

20 ‘‘(ii) CONSIDERATIONS IN IMPOSI21 TION.—In determining the amount of any 

22 penalty to be assessed under this para23 graph, the Secretary shall take into ac24 count the previous record of compliance of 

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1 ble provisions of this part and the gravity 

2 of the violation. 

3 ‘‘(iii) LIMITATIONS.— 

4 ‘‘(I) PENALTY NOT TO APPLY

5 WHERE FAILURE NOT DISCOVERED

6 EXERCISING REASONABLE DILI7 GENCE.—No civil money penalty shall 

8 be imposed under this paragraph on 

9 any failure during any period for 

10 which it is established to the satisfac11 tion of the Secretary that none of the 

12 entities against whom the penalty 

13 would be imposed knew, or exercising 

14 reasonable diligence would have 

15 known, that such failure existed. 

16 ‘‘(II) PENALTY NOT TO APPLY

17 TO FAILURES CORRECTED WITHIN 30

18 DAYS.—No civil money penalty shall 

19 be imposed under this paragraph on 

20 any failure if such failure was due to 

21 reasonable cause and not to willful ne22 glect, and such failure is corrected 

23 during the 30-day period beginning on 

24 the first day any of the entities 

25 against whom the penalty would be 


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1 imposed knew, or exercising reason2 able diligence would have known, that 

3 such failure existed. 

4 ‘‘(D) ADMINISTRATIVE REVIEW.— 

5 ‘‘(i) OPPORTUNITY FOR HEARING.— 

6 The entity assessed shall be afforded an 

7 opportunity for hearing by the Secretary 

8 upon request made within 30 days after 

9 the date of the issuance of a notice of as10 sessment. In such hearing the decision 

11 shall be made on the record pursuant to 

12 section 554 of title 5, United States Code. 

13 If no hearing is requested, the assessment 

14 shall constitute a final and unappealable 

15 order. 

16 ‘‘(ii) HEARING PROCEDURE.—If a 

17 hearing is requested, the initial agency de18 cision shall be made by an administrative 

19 law judge, and such decision shall become 

20 the final order unless the Secretary modi21 fies or vacates the decision. Notice of in22 tent to modify or vacate the decision of the 

23 administrative law judge shall be issued to 

24 the parties within 30 days after the date of 

25 the decision of the judge. A final order 


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1 which takes effect under this paragraph 

2 shall be subject to review only as provided 

3 under subparagraph (E). 

4 ‘‘(E) JUDICIAL REVIEW.— 

5 ‘‘(i) FILING OF ACTION FOR RE6 VIEW.—Any entity against whom an order 

7 imposing a civil money penalty has been 

8 entered after an agency hearing under this 

9 paragraph may obtain review by the 

10 United States district court for any district 

11 in which such entity is located or the 

12 United States District Court for the Dis13 trict of Columbia by filing a notice of ap14 peal in such court within 30 days from the 

15 date of such order, and simultaneously 

16 sending a copy of such notice by registered 

17 mail to the Secretary. 

18 ‘‘(ii) CERTIFICATION OF ADMINISTRA19 TIVE RECORD.—The Secretary shall 

20 promptly certify and file in such court the 

21 record upon which the penalty was im22 posed. 

23 ‘‘(iii) STANDARD FOR REVIEW.—The 

24 findings of the Secretary shall be set aside 

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1 stantial evidence as provided by section 

2 706(2)(E) of title 5, United States Code. 

3 ‘‘(iv) APPEAL.—Any final decision, 

4 order, or judgment of the district court 

5 concerning such review shall be subject to 

6 appeal as provided in chapter 83 of title 28 

7 of such Code. 

8 ‘‘(F) FAILURE TO PAY ASSESSMENT; MAIN9 TENANCE OF ACTION.— 

10 ‘‘(i) FAILURE TO PAY ASSESSMENT.— 

11 If any entity fails to pay an assessment 

12 after it has become a final and 

13 unappealable order, or after the court has 

14 entered final judgment in favor of the Sec15 retary, the Secretary shall refer the matter 

16 to the Attorney General who shall recover 

17 the amount assessed by action in the ap18 propriate United States district court. 

19 ‘‘(ii) NONREVIEWABILITY.—In such 

20 action the validity and appropriateness of 

21 the final order imposing the penalty shall 

22 not be subject to review. 

23 ‘‘(G) PAYMENT OF PENALTIES.—Except as 

24 otherwise provided, penalties collected under 

25 this paragraph shall be paid to the Secretary 


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1 (or other officer) imposing the penalty and shall 

2 be available without appropriation and until ex3 pended for the purpose of enforcing the provi4 sions with respect to which the penalty was im5 posed. 

6 ‘‘(3) ENFORCEMENT AUTHORITY RELATING TO

7 GENETIC DISCRIMINATION.— 

8 ‘‘(A) GENERAL RULE.—In the cases de9 scribed in paragraph (1), notwithstanding the 

10 provisions of paragraph (2)(C), the succeeding 

11 subparagraphs of this paragraph shall apply 

12 with respect to an action under this subsection 

13 by the Secretary with respect to any failure of 

14 a health insurance issuer in connection with a 

15 group health plan, to meet the requirements of 

16 subsection (a)(1)(F), (b)(3), (c), or (d) of sec17 tion 196 or section 197 or 196(b)(1) with re18 spect to genetic information in connection with 

19 the plan. 

20 ‘‘(B) AMOUNT.— 

21 ‘‘(i) IN GENERAL.—The amount of 

22 the penalty imposed under this paragraph 

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1 ticipant or beneficiary to whom such fail2 ure relates. 

3 ‘‘(ii) NONCOMPLIANCE PERIOD.—For 

4 purposes of this paragraph, the term ‘non5 compliance period’ means, with respect to 

6 any failure, the period— 

7 ‘‘(I) beginning on the date such 

8 failure first occurs; and 

9 ‘‘(II) ending on the date the fail10 ure is corrected. 

11 ‘‘(C) MINIMUM PENALTIES WHERE FAIL12 URE DISCOVERED.—Notwithstanding clauses (i) 

13 and (ii) of subparagraph (D): 

14 ‘‘(i) IN GENERAL.—In the case of 1 or 

15 more failures with respect to an indi16 vidual— 

17 ‘‘(I) which are not corrected be18 fore the date on which the plan re19 ceives a notice from the Secretary of 

20 such violation; and 

21 ‘‘(II) which occurred or continued 

22 during the period involved; 

23 the amount of penalty imposed by subpara24 graph (A) by reason of such failures with 


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1 respect to such individual shall not be less 

2 than $2,500. 

3 ‘‘(ii) HIGHER MINIMUM PENALTY

4 WHERE VIOLATIONS ARE MORE THAN DE

5 MINIMIS.—To the extent violations for 

6 which any person is liable under this para7 graph for any year are more than de mini8 mis, clause (i) shall be applied by sub9 stituting ‘$15,000’ for ‘$2,500’ with re10 spect to such person. 

11 ‘‘(D) LIMITATIONS.— 

12 ‘‘(i) PENALTY NOT TO APPLY WHERE

13 FAILURE NOT DISCOVERED EXERCISING

14 REASONABLE DILIGENCE.—No penalty 

15 shall be imposed by subparagraph (A) on 

16 any failure during any period for which it 

17 is established to the satisfaction of the 

18 Secretary that the person otherwise liable 

19 for such penalty did not know, and exer20 cising reasonable diligence would not have 

21 known, that such failure existed. 

22 ‘‘(ii) PENALTY NOT TO APPLY TO

23 FAILURES CORRECTED WITHIN CERTAIN

24 PERIODS.—No penalty shall be imposed by 

25 subparagraph (A) on any failure if— 


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1 ‘‘(I) such failure was due to rea2 sonable cause and not to willful ne3 glect; and 

4 ‘‘(II) such failure is corrected 

5 during the 30-day period beginning on 

6 the first date the person otherwise lia7 ble for such penalty knew, or exer8 cising reasonable diligence would have 

9 known, that such failure existed. 

10 ‘‘(iii) OVERALL LIMITATION FOR UN11 INTENTIONAL FAILURES.—In the case of 

12 failures which are due to reasonable cause 

13 and not to willful neglect, the penalty im14 posed by subparagraph (A) for failures 

15 shall not exceed the amount equal to the 

16 lesser of— 

17 ‘‘(I) 10 percent of the aggregate 

18 amount paid or incurred by the em19 ployer (or predecessor employer) dur20 ing the preceding taxable year for 

21 group health plans; or 

22 ‘‘(II) $500,000. 

23 ‘‘(E) WAIVER BY SECRETARY.—In the case 

24 of a failure which is due to reasonable cause 

25 and not to willful neglect, the Secretary may 


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1 waive part or all of the penalty imposed by sub2 paragraph (A) to the extent that the payment 

3 of such penalty would be excessive relative to 

4 the failure involved. 

5 ‘‘(c) DEFINITIONS.—For purposes of this section: 

6 ‘‘(1) GOVERNMENTAL PLAN.—The term ‘gov7 ernmental plan’ has the meaning given such term 

8 under section 3(32) of the Employee Retirement In9 come Security Act of 1974 and any Federal govern10 mental plan. 

11 ‘‘(2) FEDERAL GOVERNMENTAL PLAN.—The 

12 term ‘‘Federal governmental plan’’ means a govern13 mental plan established or maintained for its em14 ployees by the Government of the United States or 

15 by any agency or instrumentality of such Govern16 ment. 

17 ‘‘(3) NON-FEDERAL GOVERNMENTAL PLAN.— 

18 The term ‘non-Federal governmental plan’ means a 

19 governmental plan that is not a Federal govern20 mental plan.’’. 

21 (b) CONFORMING AMENDMENT.—The table of con22 tents under section 1(b) of the Health Insurance Port23 ability and Accountability Act of 1996 (Public Law 104– 

24 191) is amended by inserting after the item relating to 

25 section 195 the following: 

‘‘Sec. 196. Guaranteed availability of coverage. 


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‘‘Sec. 197. Fair health insurance premiums. 

‘‘Sec. 198. Prohibiting discrimination against individual participants and beneficiaries based on health status. 

‘‘Sec. 199. Prohibition of preexisting condition exclusions or other discrimination based on health status. 

‘‘Sec. 199A. Extension of dependent coverage. 

‘‘Sec. 199B. Annual limitation on cost-sharing. 

‘‘Sec. 199C. Enforcement of certain health insurance requirements.’’. 

1 (c) ERISA AND IRC ENFORCEMENT.— 

2 (1) ERISA.—Subpart B of part 7 of title I of 

3 the Employee Retirement Income Security Act of 

4 1974 (29 U.S.C. 1185 et seq.) is amended by adding 

5 at the end the following new section: 

6 ‘‘SEC. 716. OTHER MARKET REFORMS. 

7 ‘‘Sections 196 and 197 of the Health Insurance Port8 ability and Accountability Act of 1996 shall apply to 

9 health insurance issuers providing health insurance cov10 erage in connection with group health plans, and sections 

11 198 through 199B of such Act shall apply to group health 

12 plans and health insurance issuers providing health insur13 ance coverage in connection with group health plans, as 

14 if included in this subpart, and to the extent that any pro15 vision of this part conflicts with a provision of such section 

16 196 or 197 with respect to health insurance issuers pro17 viding health insurance coverage in connection with group 

18 health plans or of such section 198, 199, 199A, or 199B 

19 with respect to group health plans or health insurance 

20 issuers providing health insurance coverage in connection 


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1 with group health plans, the provisions of such sections 

2 196 through 199B shall apply.’’. 

3 (2) IRC.—Subchapter B of chapter 100 of sub4 title K of title 26 of the Internal Revenue Code of 

5 1986 is amended by adding at the end the following 

6 new section: 

7 ‘‘SEC. 9816. OTHER MARKET REFORMS. 

8 ‘‘Sections 196 and 197 of the Health Insurance Port9 ability and Accountability Act of 1996 shall apply to 

10 health insurance issuers providing health insurance cov11 erage in connection with group health plans, and sections 

12 198 through 199B of such Act shall apply to group health 

13 plans and health insurance issuers providing health insur14 ance coverage in connection with group health plans, as 

15 if included in this subchapter, and to the extent that any 

16 provision of this chapter conflicts with a provision of such 

17 section 196 or 197 with respect to health insurance issuers 

18 providing health insurance coverage in connection with 

19 group health plans or of such section 198, 199, 199A, or 

20 199B with respect to group health plans or health insur21 ance issuers providing health insurance coverage in con22 nection with group health plans, the provisions of such 

23 sections 196 through 199B shall apply.’’. 

24 (d) EFFECTIVE DATE.—The amendments made by 

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1 preme Court of the United States issues a decision strik2 ing down the Patient Protection and Affordable Care Act 

3 (Public Law 111–148) in its entirety. 

4 Subtitle B—Expanding Coverage 

5 Options 

6 SEC. 211. DEFINITION OF ‘‘EMPLOYER’’ UNDER ERISA WITH 

7 RESPECT TO GROUP HEALTH PLANS. 

8 (a) DEFINITION OF EMPLOYER.—Section 3(5) of the 

9 Employee Retirement Income Security Act of 1974 (29 

10 U.S.C. 1002(5)) is amended by striking the period and 

11 inserting ‘‘(which, with respect to a group health plan, 

12 shall be determined in accordance with criteria that in13 cludes the criteria under section 735).’’. 

14 (b) GROUP HEALTH PLANS.—Part 7 of subtitle B 

15 of title I of the Employee Retirement Income Security Act 

16 of 1974 (29 U.S.C. 1181 et seq.) is amended by adding 

17 at the end the following: 

18 ‘‘SEC. 735. DEFINITION OF ‘EMPLOYER’ WITH RESPECT TO 

19 GROUP HEALTH PLANS. 

20 ‘‘(a) IN GENERAL.—A group or association of em21 ployers that meets the criteria under subsection (b) shall 

22 be considered an employer under section 3(5) for purposes 

23 of sponsoring a group health plan. 

24 ‘‘(b) REQUIREMENTS.—The requirements under this 

25 subsection are each of the following: 


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1 ‘‘(1) The primary purpose of the group or asso2 ciation may be to offer and provide health coverage 

3 to its employer members and their employees, if 

4 such group or association has at least 1 substantial 

5 business purpose, as described in subsection (c), un6 related to offering and providing health coverage or 

7 other employee benefits to its employer members and 

8 their employees. 

9 ‘‘(2) Each employer member of the group or as10 sociation participating in the group health plan is a 

11 person acting directly as an employer of at least 1 

12 employee who is a participant covered under the 

13 plan. 

14 ‘‘(3) The group or association has— 

15 ‘‘(A) a formal organizational structure 

16 with a governing body; and 

17 ‘‘(B) by-laws or other similar indications of 

18 formality. 

19 ‘‘(4) The functions and activities of the group 

20 or association shall be controlled by the employer 

21 members of the group or association, and the em22 ployer members of the group or association that par23 ticipate in the group health plan shall control the 

24 plan. Control under this paragraph shall be in form 

25 and substance. 


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1 ‘‘(5) The employer members shall have a com2 monality of interest as described in subsection (d). 

3 ‘‘(6)(A) The group or association shall not 

4 make health coverage through the group health plan 

5 available other than to— 

6 ‘‘(i) an employee of a current employer 

7 member of the group or association; 

8 ‘‘(ii) a former employee of a current em9 ployer member of the group or association who 

10 became eligible for coverage under the group 

11 health plan when the former employee was an 

12 employee of the employer; and 

13 ‘‘(iii) a beneficiary of an individual de14 scribed in clause (i) or (ii), such as a spouse or 

15 dependent child. 

16 ‘‘(B) Notwithstanding subparagraph (A), the 

17 group or association shall not make health coverage 

18 through the group health plan available to any indi19 vidual (or beneficiaries of the individual) for any 

20 plan year following the plan year in which the plan 

21 determines pursuant to reasonable monitoring proce22 dures described in subsection (f)(2)(C) that the indi23 vidual ceases to meet the conditions described in 

24 subsection (f)(2) for being a working owner (unless 


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1 the individual again meets those conditions), except 

2 as may be required by section 601. 

3 ‘‘(7) The group or association, and any health 

4 coverage offered by the group or association, shall 

5 comply with the nondiscrimination provisions under 

6 subsection (e). 

7 ‘‘(8) The group or association shall not be a 

8 health insurance issuer, or owned or controlled by 

9 such a health insurance issuer or by a subsidiary or 

10 affiliate of such a health insurance issuer, other 

11 than to the extent such entities participate in the 

12 group or association in their capacity as employer 

13 members of the group or association. 

14 ‘‘(c) SUBSTANTIAL BUSINESS PURPOSE.— 

15 ‘‘(1) IN GENERAL.—For purposes of subsection 

16 (b)(1), a substantial business purpose shall exist if 

17 the group or association would be a viable entity in 

18 the absence of sponsoring an employee benefit plan. 

19 ‘‘(2) BUSINESS PURPOSE.—For purposes of 

20 subsection (b)(1) and paragraph (1), a business pur21 pose shall— 

22 ‘‘(A) include promoting common business 

23 interests of the members of the group or asso24 ciation or the common economic interests in a 

25 given trade or employer community; and 


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1 ‘‘(B) not be required to be a for-profit ac2 tivity. 

3 ‘‘(d) COMMONALITY OF INTEREST.— 

4 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

5 employer members of the group or association shall 

6 be treated as having a commonality of interest for 

7 purposes of subsection (b)(5) if— 

8 ‘‘(A) the employers are in the same trade, 

9 industry, line of business, or profession; or 

10 ‘‘(B) each employer has a principal place 

11 of business in the same region that does not ex12 ceed the boundaries of a single State or a met13 ropolitan area (even if the metropolitan area in14 cludes more than 1 State). 

15 ‘‘(2) SAME TRADE, INDUSTRY, OR LINE OF

16 BUSINESS.—In the case of a group or association 

17 that is sponsoring a group health plan under this 

18 section and that is itself an employer member of the 

19 group or association, the group or association shall 

20 be deemed for purposes of paragraph (1)(A) to be 

21 in the same trade, industry, line of business, or pro22 fession, as applicable, as the other employer mem23 bers of the group or association. 

24 ‘‘(3) NONDISCRIMINATION.—The standards 

25 under paragraph (1) shall not be implemented in a 


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1 manner that is subterfuge for discrimination as is 

2 prohibited under subsection (e). 

3 ‘‘(e) NONDISCRIMINATION.— 

4 ‘‘(1) IN GENERAL.—A group or association of 

5 employers sponsoring a group health plan under this 

6 section, and any health coverage sponsored by such 

7 group or association, shall comply with each of the 

8 following: 

9 ‘‘(A) The group or association shall not 

10 condition employer membership in the group or 

11 association on any health factor of any indi12 vidual who is or may become eligible to partici13 pate in the group health plan sponsored by the 

14 group or association. 

15 ‘‘(B) The group health plan sponsored by 

16 the group or association shall comply with the 

17 rules under section 2590.702(b) of title 29, 

18 Code of Federal Regulations (as in effect on 

19 June 21, 2018), with respect to nondiscrimina20 tion in rules for eligibility for benefits, subject 

21 to subparagraph (D). 

22 ‘‘(C) The group health plan sponsored by 

23 the group or association shall comply with the 

24 rules under section 2590.702(c) of title 29, 

25 Code of Federal Regulations (as in effect on 


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1 June 21, 2018), with respect to nondiscrimina2 tion in premiums or contributions required by 

3 any participant or beneficiary for coverage 

4 under the plan, subject to subparagraph (D). 

5 ‘‘(D) In applying subparagraphs (B) and 

6 (C), the group or association may not treat the 

7 employees of different employer members of the 

8 group or association as distinct groups of simi9 larly-situated individuals based on a health fac10 tor of 1 or more individuals. 

11 ‘‘(2) DEFINITION OF HEALTH FACTOR.—For 

12 purposes of this subsection, the term ‘health factor’ 

13 has the meaning given such term in section 

14 2590.702(a) of title 29, Code of Federal Regulations 

15 (as in effect on June 21, 2018). 

16 ‘‘(f) DUAL TREATMENT OF WORKING OWNERS AS

17 EMPLOYERS AND EMPLOYEES.— 

18 ‘‘(1) IN GENERAL.—A person determined in ac19 cordance with paragraph (2) to be a working owner 

20 of a trade or business may qualify as both an em21 ployer and as an employee of the trade or business 

22 for purposes of the requirements under subsection 

23 (b), including the requirements under paragraphs 

24 (2) and (6) of such subsection. 

25 ‘‘(2) WORKING OWNER.— 


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1 ‘‘(A) ELIGIBILITY.—A person shall qualify 

2 as a ‘working owner’ if a responsible fiduciary 

3 of the group health plan reasonably determines 

4 that the person— 

5 ‘‘(i) does not have any common law 

6 employees; 

7 ‘‘(ii) has an ownership right of any 

8 nature in a trade or business, whether in9 corporated or unincorporated, including a 

10 partner and other self-employed individual; 

11 ‘‘(iii) is earning wages or self-employ12 ment income from the trade or business 

13 for providing personal services to the trade 

14 or business; and 

15 ‘‘(iv) either— 

16 ‘‘(I) works on average at least 20 

17 hours per week, or at least 80 hours 

18 per month, providing personal services 

19 to the person’s trade or business; or 

20 ‘‘(II) has wages or self-employ21 ment income from such trade or busi22 ness that at least equals the person’s 

23 cost of coverage for participation by 

24 the person, and any covered bene25 ficiaries, in the group health plan 


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1 sponsored by the group or association 

2 in which the person is participating. 

3 ‘‘(B) DETERMINATION.—The determina4 tion under subparagraph (A) shall be made 

5 when the person first becomes eligible for cov6 erage under the group health plan. 

7 ‘‘(C) REASONABLE MONITORING PROCE8 DURES.—A responsible fiduciary of the group 

9 health plan shall, through reasonable moni10 toring procedures, periodically confirm the con11 tinued eligibility of a person to qualify as a 

12 working owner under subparagraph (A) for pur13 poses of meeting the requirements under sub14 section (b) for the group health plan sponsored 

15 under this section. 

16 ‘‘(g) APPLICABILITY.— 

17 ‘‘(1) FULLY INSURED.—This section shall apply 

18 beginning on September 1, 2024, with respect to a 

19 group or association of employers sponsoring a 

20 group health plan that is fully insured. 

21 ‘‘(2) PLANS EXPANDING TO INCLUDE BROADER

22 GROUP.—This section shall apply beginning on Jan23 uary 1, 2025, with respect to a group or association 

24 of employers sponsoring a group health plan that— 

25 ‘‘(A) is not fully insured; 


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1 ‘‘(B) is in existence on June 21, 2024; 

2 ‘‘(C) meets the requirements that applied 

3 with respect to such plan before June 21, 2024; 

4 and 

5 ‘‘(D) chooses to be a plan sponsored under 

6 this section (and subject to the requirements 

7 under subsections (b) through (f)). 

8 ‘‘(3) OTHER ASSOCIATION HEALTH PLANS.— 

9 This section shall apply beginning on April 1, 2025, 

10 with respect to any other group or association of em11 ployers sponsoring a group health plan. 

12 ‘‘(4) OTHER CRITERIA IN ADVISORY OPIN13 IONS.—The criteria under this section shall not in14 validate any criteria provided in an advisory opinion, 

15 in effect on or after the date of enactment of the 

16 Fair Care Act of 2024, that the Secretary may use 

17 to determine if a group or association of employers 

18 is an employer under section 3(5) for purposes of 

19 sponsoring a group health plan. 

20 ‘‘(h) DETERMINATION OF EMPLOYER OR JOINT EM21 PLOYER STATUS.— 

22 ‘‘(1) IN GENERAL.—Participating in or facili23 tating a group health plan sponsored by a bona fide 

24 group or association of employers pursuant to sub25 section (a) shall not be construed as establishing an 


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1 employer or joint employer relationship under any 

2 Federal or State law. 

3 ‘‘(2) APPLICATION OF PROVISION.—Paragraph 

4 (1) shall apply to a group health plan sponsored or 

5 facilitated by a franchisor and any franchisee, by 

6 multiple franchisors for the benefit of the employees 

7 of such franchisors and their franchisees, by mul8 tiple franchisees for the benefit of the employees of 

9 such franchisees, by a franchisor whose franchisee or 

10 franchisees participate or participates in the plan, or 

11 by a person or entity that contracts with any indi12 vidual as an independent contractor for whom the 

13 plan benefits. 

14 ‘‘(i) RULE OF CONSTRUCTION.—Nothing in this sec15 tion shall be construed as repealing or otherwise limiting 

16 the application of this Act (including section 712 relating 

17 to mental health parity) to group health plans and em18 ployee welfare benefit plans.’’. 

19 SEC. 212. SHORT-TERM LIMITED DURATION INSURANCE. 

20 (a) DEFINITION.—Section 2791(b) of the Public 

21 Health Service Act (42 U.S.C. 300gg–91(b)) is amended 

22 by adding at the end the following: 

23 ‘‘(6) SHORT-TERM LIMITED DURATION INSUR24 ANCE.—The term ‘short-term limited duration insur25 ance’ means health insurance coverage provided purVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00122 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 suant to a contract with a health insurance issuer 

2 that has an expiration date specified in the contract 

3 (not taking into account any extensions that may be 

4 elected by the policyholder with or without the 

5 issuer’s consent) that is less than 12 months after 

6 the original effective date of the contract.’’. 

7 (b) GUARANTEED RENEWABILITY.—Section 2703 of 

8 the Public Health Service Act (42 U.S.C. 300gg–2) is 

9 amended— 

10 (1) in subsection (a), by inserting ‘‘or offers 

11 short-term limited duration insurance’’ after ‘‘group 

12 market’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(f) APPLICATION TO SHORT-TERM LIMITED DURA15 TION INSURANCE.— 

16 ‘‘(1) IN GENERAL.—In applying this section in 

17 the case of short-term limited duration insurance— 

18 ‘‘(A) a reference to ‘health insurance cov19 erage’ with respect to such coverage offered in 

20 the individual market shall be deemed to in21 clude short-term limited duration insurance; 

22 and 

23 ‘‘(B) a reference to ‘health insurance 

24 issuer’ with respect to health insurance cov25 erage offered in the individual market shall be 


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1 deemed to include an issuer of short-term lim2 ited duration insurance. 

3 ‘‘(2) SPECIAL RULE FOR SHORT-TERM LIMITED

4 DURATION INSURANCE.—In the case of short-term 

5 limited duration insurance, at the time of application 

6 for enrollment in such insurance coverage, an issuer 

7 of such insurance may offer renewability of such 

8 coverage, and an individual may decline renewability 

9 of such coverage in accordance with this section, and 

10 the contract between such individual and the health 

11 insurance issuer shall specify whether the individual 

12 opted for renewability or no renewability.’’. 

13 (c) APPLICABILITY.—The amendments made by sub14 sections (a) and (b) shall apply with respect to contracts 

15 for short-term limited duration insurance that take effect 

16 on or after January 1, 2025. 

17 Subtitle C—Improving Commercial 

18 Health Insurance 

19 SEC. 221. INVISIBLE GUARANTEED COVERAGE POOL REIN20 SURANCE PROGRAM; TAX ON EXCHANGE 

21 PLANS. 

22 (a) ESTABLISHMENT.—Not later than 2 years after 

23 the date of enactment of this Act, the Secretary of Health 

24 and Human Services shall establish the Invisible GuaranVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 teed Coverage Pool Reinsurance Program (in this section 

2 referred to as the ‘‘IGCPR program’’). 

3 (b) STATE GRANTS.—Under the IGCPR program, 

4 the Secretary shall, from amounts appropriated under 

5 subsection (f) for a fiscal year, award grants to States for 

6 such fiscal year, in amounts determined in accordance 

7 with the allocation methodology specified under subsection 

8 (d). Such grants shall be used for the purpose of estab9 lishing or maintaining a qualifying Invisible Guaranteed 

10 Coverage Pool for the State. 

11 (c) FEDERAL DEFAULT.— 

12 (1) IN GENERAL.—In the case of a State that 

13 does not, by a date and in a manner specified by the 

14 Secretary, choose to be awarded a grant under sub15 section (b) for a fiscal year to operate a qualifying 

16 Invisible Guaranteed Coverage Pool for the State, 

17 the Secretary shall, from amounts appropriated 

18 under subsection (f) for such fiscal year, use the al19 location determined for the State under subsection 

20 (d) for participation of such State in the Federal de21 fault qualifying Invisible Guaranteed Coverage Pool 

22 described in paragraph (2). 

23 (2) FEDERAL DEFAULT QUALIFYING INVISIBLE

24 GUARANTEED COVERAGE POOL.—The Federal de25 fault qualifying high risk pool is, with respect to 


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1 each State that chooses not to be awarded a grant 

2 under subsection (b) with respect to a fiscal year for 

3 which funds are appropriated under subsection (f), 

4 an Invisible Guaranteed Coverage Pool under which 

5 health insurance issuers participating in the Ex6 change of such a State, with respect to designated 

7 individuals who are enrolled in health insurance cov8 erage and are expected to experience higher than av9 erage health costs as determined by the insurer, cede 

10 risk to the pool, without affecting the premium paid 

11 by the designated individuals or their terms of cov12 erage. With respect to such pool— 

13 (A) high-risk individuals designated for 

14 cession to the pool shall be designated by the 

15 ceding issuer; 

16 (B) the premium amount the ceding issuer 

17 shall pay to the reinsurance pool shall be 90 

18 percent of the premium paid to the issuer for 

19 the coverage; 

20 (C) the ceding issuer shall retain the same 

21 risk under the ceded policies as under any other 

22 policy of the issuer with respect to the first 

23 $10,000 of benefits for each ceded policy in24 volved and will not retain any risk under ceded 

25 policies after such first $10,000 of benefits; and 


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1 (D) after a ceding issuer, with respect to 

2 a ceded policy, no longer retains risk under 

3 such policy pursuant to subparagraph (C), the 

4 negotiated rate under such policy for items and 

5 services shall be payable at the reimbursement 

6 rate under the Medicare program under title 

7 XVIII of the Social Security Act for such items 

8 and services, or in the case of items and serv9 ices for which payment is available under the 

10 policy but not the Medicare program, at a rate 

11 determined by the Secretary. 

12 (d) ALLOCATION METHODOLOGY.—Not later than six 

13 months after the establishment of the IGCPR program, 

14 the Secretary shall specify an allocation methodology for 

15 determining the amount of funds appropriated under sub16 section (f) for a fiscal year to be allocated for each State 

17 for purposes of subsections (b) and (c). Such methodology 

18 shall be based on the number of residents of each State 

19 and the general health status of such residents. 

20 (e) QUALIFYING INVISIBLE GUARANTEED COVERAGE

21 POOL.—For purposes of this section, the term ‘‘qualifying 

22 Invisible Guaranteed Coverage Pool’’ means, with respect 

23 to a State, a method of designation under which health 

24 insurance issuers identify individuals who experience high25 er than average health costs as determined by the State 


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1 and are enrolled in health insurance coverage offered in 

2 the individual market, and cede the risk of spending more 

3 than $10,000 on health care services for a single indi4 vidual to the pool without affecting the premium paid by 

5 the designated individuals or their terms of coverage. With 

6 respect to such pool, the State, or an entity operating the 

7 pool on behalf of the State, shall establish— 

8 (1) the premium amount the ceding issuer shall 

9 pay to the reinsurance pool; 

10 (2) the applicable attachment points or coinsur11 ance percentages if the ceding issuer retains any 

12 portion of the risk under ceded policies, except that 

13 the provisions of subparagraphs (C) and (D) of sub14 section (c)(2) shall apply to such high risk pool in 

15 the same manner as such clauses apply to the Fed16 eral default high risk pool; and 

17 (3) the mechanism by which high-risk individ18 uals are designated for cession to the pool, which 

19 may include a list of designated high-cost health 

20 conditions. 

21 (f) APPROPRIATIONS.—There is appropriated to the 

22 Secretary of Health and Human Services 

23 $200,000,000,000 to carry out this section for the period 

24 of the first 10 years after the establishment of the IGCPR 

25 program. 


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1 (g) TAX ON HEALTH INSURANCE PLANS SOLD ON

2 EXCHANGES.— 

3 (1) IN GENERAL.—Chapter 34 of the Internal 

4 Revenue Code of 1986 is amended by adding at the 

5 end the following new subchapter: 

6 ‘‘Subchapter C—Additional Tax on Health In7 surance Plans Sold by Insurers Offering 

8 Plans on Exchanges 

‘‘Sec. 4401. Additional tax on health insurance plans sold by insurers offering 

plans on exchanges. 

9 ‘‘SEC. 4401. ADDITIONAL TAX ON HEALTH INSURANCE 

10 PLANS SOLD BY INSURERS OFFERING PLANS 

11 ON EXCHANGES. 

12 ‘‘(a) IMPOSITION OF TAX.—There is imposed a tax 

13 of $4 for each policy month of each health insurance policy 

14 sold by insurers offering plans through an Exchange es15 tablished under the Patient Protection and Affordable 

16 Care Act. 

17 ‘‘(b) LIABILITY.—The tax imposed by subsection (a) 

18 shall be paid by the plan sponsor.’’. 

19 (2) CONFORMING AMENDMENT.—The table of 

20 subchapters for chapter 34 of the Internal Revenue 

21 Code of 1986 is amended by adding at the end the 

22 following item: 

‘‘SUBCHAPTER C—ADDITIONAL TAX ON HEALTH INSURANCE PLANS SOLD BY

INSURERS OFFERING PLANS ON EXCHANGES’’. 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply with respect to months 

3 beginning after the date of enactment of this Act. 

4 (h) REPORT.—The Secretary of Health and Human 

5 Services, in collaboration with the Comptroller General of 

6 the United States, shall submit to Congress, not later than 

7 5 years after the date of enactment of this Act, and again 

8 5 years thereafter, a report on the status of reinsurance 

9 pool funding, along with any recommendations with re10 spect to future allocations or funding methods for such 

11 pool. 

12 SEC. 222. EMPLOYER HEALTH INSURANCE MANDATE RE13 PEAL. 

14 (a) IN GENERAL.—Chapter 43 of the Internal Rev15 enue Code of 1986 is amended by striking section 4980H. 

16 (b) REPEAL OF RELATED REPORTING REQUIRE17 MENTS.—Subpart D of part III of subchapter A of chap18 ter 61 of such Code is amended by striking section 6056. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) Section 6724(d)(1)(B) of such Code is 

21 amended by inserting ‘‘or’’ at the end of clause 

22 (xxiii), by striking ‘‘or’’ at the end of clause (xxiv), 

23 and by striking clause (xxv). 


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1 (2) Section 6724(d)(2) of such Code is amend2 ed by inserting ‘‘or’’ at the end of subparagraph 

3 (GG) and by striking subparagraph (HH). 

4 (3) The table of sections for chapter 43 of such 

5 Code is amended by striking the item relating to sec6 tion 4980H. 

7 (4) The table of sections for subpart D of part 

8 III of subchapter A of chapter 61 of such Code is 

9 amended by striking the item relating to section 

10 6056. 

11 (5) Section 1513 of the Patient Protection and 

12 Affordable Care Act is amended by striking sub13 section (c). 

14 (d) EFFECTIVE DATE.— 

15 (1) IN GENERAL.—Except as otherwise pro16 vided in this subsection, the amendments made by 

17 this section shall apply to months and other periods 

18 beginning after December 31, 2024. 

19 (2) REPEAL OF STUDY AND REPORT.—The 

20 amendment made by subsection (c)(5) shall take ef21 fect on the date of the enactment of this Act. 


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1 SEC. 223. REFUNDABLE CREDITS FOR COVERAGE UNDER A 

2 QUALIFIED HEALTH PLAN FOR INDIVIDUALS 

3 OFFERED EMPLOYER-SPONSORED INSUR4 ANCE. 

5 (a) IN GENERAL.—Section 36B(c)(2) of the Internal 

6 Revenue Code of 1986 is amended— 

7 (1) in subparagraph (B)(i), by inserting ‘‘or 

8 section 5000A(f)(1)(B)’’, and 

9 (2) by striking subparagraph (C). 

10 (b) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 the date of the enactment of this Act. 

13 SEC. 224. INCLUSION IN INCOME OF CERTAIN COSTS OF 

14 EMPLOYER-PROVIDED COVERAGE UNDER 

15 HEALTH PLANS. 

16 (a) IN GENERAL.—Section 106 of the Internal Rev17 enue Code of 1986 is amended by adding at the end the 

18 following new subsection: 

19 ‘‘(h) LIMITATION.— 

20 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

21 apply to the extent that employer-provided coverage 

22 under health plans for an employee for a taxable 

23 year exceeds— 

24 ‘‘(A) $10,200 for self-only coverage, and 

25 ‘‘(B) $27,500 for all other coverage. 


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1 ‘‘(2) IN GENERAL.—In the case of any calendar 

2 year after 2025, the dollar amounts in paragraph 

3 (1) shall each be increased by an amount equal to— 

4 ‘‘(A) such dollar amount, multiplied by— 

5 ‘‘(B) the cost-of-living adjustment deter6 mined under section 1(f)(3) for such calendar 

7 year, determined— 

8 ‘‘(i) by substituting ‘calendar year 

9 2024’ for ‘calendar year 2018’ in subpara10 graph (A)(ii) thereof, and 

11 ‘‘(ii) by substituting for the C–CPI–U 

12 referred to in section 1(f)(3)(A) the 

13 amount that such CPI would have been if 

14 the annual percentage increase in CPI with 

15 respect to each year after 2023 and before 

16 2033 had been one percentage point great17 er. 

18 ‘‘(3) TERMS RELATED TO CPI.— 

19 ‘‘(A) ANNUAL PERCENTAGE INCREASE.— 

20 For purposes of subparagraph (B)(ii)(II), the 

21 term ‘annual percentage increase’ means the 

22 percentage (if any) by which C–CPI–U for any 

23 year exceeds the C–CPI–U for the prior year. 

24 ‘‘(B) OTHER TERMS.—Terms used in this 

25 paragraph which are also used in section 


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1 1(f)(3) shall have the same meanings as when 

2 used in such section.’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply with respect to taxable years begin5 ning after December 31, 2024. 

6 SEC. 225. CHANGE IN PERMISSIBLE AGE VARIATION IN 

7 HEALTH INSURANCE PREMIUM RATES. 

8 Section 2701(a)(1)(A)(iii) of the Public Health Serv9 ice Act (42 U.S.C. 300gg(a)(1)(A)(iii)) is amended by in10 serting after ‘‘(consistent with section 2707(c))’’ the fol11 lowing: ‘‘or, for plan years beginning on or after January 

12 1, 2025, as the Secretary may implement through interim 

13 final regulation, 5 to 1 for adults (consistent with section 

14 2707(c))’’. 

15 SEC. 226. PREMIUM ASSISTANCE ADJUSTMENT TO RE16 FLECT AGE. 

17 (a) MODIFICATION OF APPLICABLE PERCENTAGE.— 

18 Section 36B(b)(3)(A) of the Internal Revenue Code of 

19 1986 is amended to read as follows: 

20 ‘‘(A) APPLICABLE PERCENTAGE.— 

21 ‘‘(i) IN GENERAL.—The applicable 

22 percentage for any taxable year shall be 

23 the percentage such that the applicable 

24 percentage for any taxpayer whose house25 hold income is within an income tier speciVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00134 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 fied in the following table shall increase, on 

2 a sliding scale in a linear manner, from the 

3 initial percentage to the final percentage 

4 specified in such table for such income tier 

5 with respect to a taxpayer of the age in6 volved: 

‘‘In the case of 

household income 

(expressed as a 

percent of the 

poverty line) 

within the 

following 

income tier: 

Up to Age 29 Age 30–39 Age 40–49 Age 50–59 Over Age 59 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Up to 100% 0 0 0 0 0 0 0 0 0 0 

100%–133% 2 2 2 2 2 2 2 2 2 2 

133%–150% 3 4.3 3 4.3 3 4.3 3 4.3 3 4.3 

150%–200% 4.3 6.7 4.3 6.7 4.3 6.7 4.3 6.7 4.3 6.7 

200%–250% 6.7 6.7 6.7 7.6 6.7 8.3 6.7 8.3 6.7 8.3 

250%–300% 6.7 6.7 7.6 7.6 8.3 9.8 8.3 9.8 8.3 9.8 

300%–400% 6.7 7 7.6 8 9.8 10 9.8 10 9.8 10 

400%–600% 7 9 8 10 10 15 10 15 10 15 

7 ‘‘(ii) AGE DETERMINATIONS.— 

8 ‘‘(I) IN GENERAL.—For purposes 

9 of clause (i), the age of the taxpayer 

10 taken into account under clause (i) 

11 with respect to any taxable year is the 

12 age attained by such taxpayer before 

13 the close of such taxable year. 

14 ‘‘(II) JOINT RETURNS.—In the 

15 case of a joint return, the age of the 

16 older spouse shall be taken into ac17 count under clause (i). 

18 ‘‘(iii) INDEXING.—In the case of any 

19 taxable year beginning after calendar year 


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1 2024, the initial and final percentages con2 tained in clause (i) shall be adjusted to re3 flect— 

4 ‘‘(I) the excess (if any) of the 

5 rate of premium growth for the period 

6 beginning with calendar year 2013 

7 and ending with calendar year 2024, 

8 over the rate of income growth for 

9 such period, and 

10 ‘‘(II) in addition to any adjust11 ment under subclause (I), the excess 

12 (if any) of the rate of premium 

13 growth for calendar year 2024, over 

14 the rate of growth in the consumer 

15 price index for calendar year 2024. 

16 ‘‘(iv) FAILSAFE.—Clause (iii)(II) shall 

17 apply only if the aggregate amount of pre18 mium tax credits under this section and 

19 cost-sharing reductions under section 1402 

20 of the Patient Protection and Affordable 

21 Care Act for the preceding calendar year 

22 exceeds an amount equal to 0.504 percent 

23 of the gross domestic product for such cal24 endar year.’’. 


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1 (b) EXPANSION OF ELIGIBILITY.—Section 36B of the 

2 Internal Revenue Code of 1986 is amended— 

3 (1) in subsection (c)(1)(A), by striking ‘‘400’’ 

4 and inserting ‘‘600’’; and 

5 (2) in subsection (f)(2)(B)(i), by striking ‘‘400’’ 

6 each place such reference appears and inserting 

7 ‘‘600’’ in each such place. 

8 (c) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2024. 

11 SEC. 227. PREMIUM ASSISTANCE. 

12 Notwithstanding any other provision of law, the Sec13 retary of the Treasury shall calculate the credit allowable 

14 under section 36B of the Internal Revenue Code of 1986 

15 based on the taxpayer’s prior year tax return and the Sec16 retary of Health and Human Services shall provide for 

17 open enrollment periods that end on April 15. 

18 SEC. 228. ADDING COPPER PLANS TO EXCHANGES. 

19 (a) IN GENERAL.—Section 1302 of the Patient Pro20 tection and Affordable Care Act (42 U.S.C. 18022) is 

21 amended— 

22 (1) in subsection (a)(3), by inserting ‘‘copper,’’ 

23 after ‘‘either the’’; 

24 (2) in subsection (c), by adding at the end the 

25 following new paragraph: 


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1 ‘‘(5) SPECIAL RULE FOR COPPER PLANS.—A 

2 health plan in the copper level of coverage (as de3 scribed in subsection (d)(1)(E)) shall be deemed to 

4 meet the requirements of this subsection.’’; 

5 (3) in subsection (d)— 

6 (A) in paragraph (1), by adding at the end 

7 the following new subparagraph: 

8 ‘‘(E) COPPER LEVEL.—A plan in the cop9 per level shall provide a level of coverage that 

10 is designed to provide benefits that are actuari11 ally equivalent to 50 percent of the full actu12 arial value of the benefits provided under the 

13 plan and will have out-of-pocket limits that are 

14 30 percent higher than bronze plans.’’; and 

15 (B) in paragraph (4)— 

16 (i) by inserting ‘‘copper,’’ after ‘‘any 

17 reference to a’’; and 

18 (ii) by inserting ‘‘copper,’’ after ‘‘pro19 viding a’’; and 

20 (4) in subsection (e)(1), by inserting ‘‘copper,’’ 

21 after ‘‘not providing a’’. 

22 (b) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply with respect to plan years begin24 ning on or after January 1, 2025. 


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1 SEC. 229. COPPER AND BRONZE PLANS. 

2 Notwithstanding any other provision of law, refund3 able credits for coverage under a qualified health plan and 

4 cost-sharing reductions may be used to purchase bronze 

5 and copper plans. 

6 SEC. 230. WAIVERS FOR STATE INNOVATION. 

7 (a) STREAMLINING THE STATE APPLICATION PROC8 ESS.—Section 1332 of the Patient Protection and Afford9 able Care Act (42 U.S.C. 18052) is amended— 

10 (1) in subsection (a)(1)(C), by striking ‘‘the 

11 law’’ and inserting ‘‘a law or has in effect a certifi12 cation’’; and 

13 (2) in subsection (b)(2)— 

14 (A) in the paragraph heading, by inserting 

15 ‘‘OR CERTIFY’’ after ‘‘LAW’’; 

16 (B) in subparagraph (A)— 

17 (i) by striking ‘‘A law’’ and inserting 

18 the following: 

19 ‘‘(i) LAWS.—A law’’; and 

20 (ii) by adding at the end the fol21 lowing: 

22 ‘‘(ii) CERTIFICATIONS.—A certifi23 cation described in this paragraph is a doc24 ument, signed by the Governor of the 

25 State, that certifies that such Governor 

26 has the authority under existing Federal 


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1 and State law to take action under this 

2 section, including implementation of the 

3 State plan under subsection (a)(1)(B).’’; 

4 and 

5 (C) in subparagraph (B)— 

6 (i) in the subparagraph heading, by 

7 striking ‘‘OF OPT OUT’’; and 

8 (ii) by striking ‘‘may repeal a law’’ 

9 and all that follows through the period at 

10 the end and inserting the following: ‘‘may 

11 terminate the authority provided under the 

12 waiver with respect to the State by— 

13 ‘‘(i) repealing a law described in sub14 paragraph (A)(i); or 

15 ‘‘(ii) terminating a certification de16 scribed in subparagraph (A)(ii), through a 

17 certification for such termination signed by 

18 the Governor of the State.’’. 

19 (b) PROVIDING EXPEDITED APPROVAL OF STATE

20 WAIVERS.—Section 1332(d) of the Patient Protection and 

21 Affordable Care Act (42 U.S.C. 18052(d)) is amended— 

22 (1) in paragraph (1) by striking ‘‘180’’ and in23 serting ‘‘90’’; and 

24 (2) by adding at the end the following: 

25 ‘‘(3) EXPEDITED DETERMINATION.— 


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1 ‘‘(A) IN GENERAL.—With respect to any 

2 application under subsection (a)(1) submitted 

3 on or after the date of this paragraph or any 

4 such application submitted prior to such date of 

5 enactment and under review by the Secretary 

6 on such date of enactment, the Secretary shall 

7 make a determination on such application, 

8 using the criteria for approval otherwise appli9 cable under this section, not later than 45 days 

10 after the receipt of such application, and shall 

11 allow the public notice and comment at the 

12 State and Federal levels described under sub13 section (a)(4) to occur concurrently if such 

14 State application— 

15 ‘‘(i) is submitted in response to an ur16 gent situation, with respect to areas in the 

17 State that the Secretary determines are at 

18 risk for excessive premium increases or 

19 having no health plans offered in the appli20 cable health insurance market for the cur21 rent or following plan year; or 

22 ‘‘(ii) is for a waiver that is the same 

23 or substantially similar to a waiver that 

24 the Secretary already has approved for an25 other State. 


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1 ‘‘(B) APPROVAL.— 

2 ‘‘(i) URGENT SITUATIONS.— 

3 ‘‘(I) PROVISIONAL APPROVAL.—A 

4 waiver approved under the expedited 

5 determination process under subpara6 graph (A)(i) shall be in effect for a 

7 period of 3 years, unless the State re8 quests a shorter duration. 

9 ‘‘(II) FULL APPROVAL.—Subject 

10 to the requirements for approval oth11 erwise applicable under this section, 

12 not later than 1 year before the expi13 ration of a provisional waiver period 

14 described in subclause (I) with respect 

15 to an application described in sub16 paragraph (A)(i), the Secretary shall 

17 make a determination on whether to 

18 extend the approval of such waiver for 

19 the full term of the waiver requested 

20 by the State, for a total approval pe21 riod not to exceed 6 years. The Sec22 retary may request additional infor23 mation as the Secretary determines 

24 appropriate to make such determina25 tion. 


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1 ‘‘(ii) APPROVAL OF SAME OR SIMILAR

2 APPLICATIONS.—An approval of a waiver 

3 under subparagraph (A)(ii) shall be subject 

4 to the terms of subsection (e). 

5 ‘‘(C) GAO STUDY.—Not later than 5 years 

6 after the date of enactment of this paragraph, 

7 the Comptroller General of the United States 

8 shall conduct a review of all waivers approved 

9 pursuant to an application under subparagraph 

10 (A)(ii) to evaluate whether such waivers met 

11 the requirements of subsection (b)(1) and 

12 whether the applications should have qualified 

13 for such expedited process.’’. 

14 (c) PROVIDING CERTAINTY FOR STATE-BASED RE15 FORMS.—Section 1332(e) of the Patient Protection and 

16 Affordable Care Act (42 U.S.C. 18052(e)) is amended by 

17 striking ‘‘No waiver’’ and all that follows through the pe18 riod at the end and inserting the following: ‘‘A waiver 

19 under this section— 

20 ‘‘(1) shall be in effect for a period of 6 years 

21 unless the State requests a shorter duration; 

22 ‘‘(2) may be renewed, subject to the State meet23 ing the criteria for approval otherwise applicable 

24 under this section, for unlimited additional 6-year 

25 periods upon application by the State; and 


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1 ‘‘(3) may not be suspended or terminated, in 

2 whole or in part, by the Secretary at any time before 

3 the date of expiration of the waiver period (including 

4 any renewal period under paragraph (2)), unless the 

5 Secretary determines that the State materially failed 

6 to comply with the terms and conditions of the waiv7 er.’’. 

8 (d) ENSURING PATIENT ACCESS TO MORE FLEXIBLE

9 HEALTH PLANS.—Section 1332(b)(1)(B) of the Patient 

10 Protection and Affordable Care Act (42 U.S.C. 

11 18052(b)(1)(B)) is amended by striking ‘‘at least as af12 fordable’’ and inserting ‘‘of comparable affordability, in13 cluding for low-income individuals, individuals with serious 

14 health needs, and other vulnerable populations,’’. 

15 (e) APPLICABILITY.—The amendments made by this 

16 Act to section 1332 of the Patient Protection and Afford17 able Care Act (42 U.S.C. 18052)— 

18 (1) with respect to applications for waivers 

19 under such section 1332 submitted after the date of 

20 enactment of this Act and applications for such 

21 waivers submitted prior to such date of enactment 

22 and under review by the Secretary on the date of en23 actment, shall take effect on the date of enactment 

24 of this Act; and 


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1 (2) with respect to applications for waivers ap2 proved under such section 1332 before the date of 

3 enactment of this Act, shall not require reconsider4 ation of whether such applications meet the require5 ments of such section 1332, except that, at the re6 quest of a State, the Secretary shall recalculate the 

7 amount of funding provided under subsection (a)(3) 

8 of such section. 

9 SEC. 231. ENROLLMENT PERIODS. 

10 (a) EXCHANGES.—Paragraph (7) of section 1311(c) 

11 of the Patient Protection and Affordable Care Act (42 

12 U.S.C. 18031(c)), as added by section 106, is amended 

13 by adding at the end the following new subparagraph: 

14 ‘‘(B) ENROLLMENTS OTHER THAN DURING

15 INITIAL, OPEN, AND SPECIAL ENROLLMENT PE16 RIODS.—Beginning with plan year 2025, an Ex17 change may provide for enrollments during pe18 riods in addition to open enrollment periods de19 scribed in subparagraph (A) or paragraph (6) 

20 and special enrollment periods described in 

21 paragraph (6).’’. 

22 (b) HEALTH PLANS.—Subpart I of part A of title 

23 XXVII of the Public Health Service Act is amended by 

24 adding at the end the following new section: 


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1 ‘‘SEC. 2710. ENROLLMENT OUTSIDE OF INITIAL, OPEN, AND 

2 SPECIAL ENROLLMENT PERIOD. 

3 ‘‘Beginning with plan year 2025, a group health plan 

4 and a health insurance issuer offering group or individual 

5 health insurance coverage may provide for enrollment in 

6 such plan or coverage during periods in addition to initial, 

7 open, or special enrollment periods. In the case that an 

8 individual enrolls in such plan or coverage during a period 

9 pursuant to the previous sentence, the plan or issuer may 

10 charge the individual a one-time enrollment fee.’’. 

11 SEC. 232. STATE-OPERATED EXCHANGES FLEXIBILITY FOR 

12 OPEN ENROLLMENT PERIODS. 

13 Section 1311(c) of the Patient Protection and Afford14 able Care Act (42 U.S.C. 18031(c)) is amended— 

15 (1) in paragraph (6), by striking ‘‘The Sec16 retary’’ and inserting ‘‘Subject to paragraph (7), the 

17 Secretary’’; and 

18 (2) by adding at the end the following new 

19 paragraph: 

20 ‘‘(7) FLEXIBILITY FOR ENROLLMENT PERI21 ODS.— 

22 ‘‘(A) STATE-OPERATED EXCHANGES OPEN

23 ENROLLMENT PERIODS.—In the case of an Ex24 change operated by a State, beginning with 

25 plan years of 1 year after the date of enactment 

26 of this Act, the Exchange may provide for open 


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1 enrollment periods (after the initial enrollment 

2 period) every 12, 24, or 36 months, as deter3 mined by the State.’’. 

4 SEC. 233. PROMOTING HEALTH PLANS THAT COVER INDI5 VIDUALS IN MORE THAN ONE STATE. 

6 There are appropriated, out of amounts in the Treas7 ury not otherwise appropriated, $10,000,000 to be made 

8 available by no later than 1 year after the date of enact9 ment of this Act, to the Center for Medicare & Medicaid 

10 Innovation to fund new research or pilot programs dedi11 cated to pursuing viable methods of enrolling individuals 

12 in health insurance programs that cross State lines. 

13 TITLE III—COMPETITION, 

14 TRANSPARENCY AND AC15 COUNTABILITY 

16 Subtitle A—Provider and Insurer 

17 Competition 

18 SEC. 301. HOSPITAL CONSOLIDATION. 

19 (a) AUTHORIZATION OF APPROPRIATIONS.—There is 

20 authorized to be appropriated $160,000,000 to the Fed21 eral Trade Commission to hire staff to investigate, as con22 sistent with the Sherman Antitrust Act and other relevant 

23 Federal laws, anti-competitive mergers and practices 

24 under such laws to the extent such mergers and practices 

25 relate to providers of inpatient and outpatient health care 


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1 services, as defined by the Secretary of Health and 

2 Human Services. 

3 (b) MEDICARE ADVANTAGE RATES APPLIED TO CER4 TAIN HHI HOSPITALS.— 

5 (1) IN GENERAL.—Section 1866(a) of the So6 cial Security Act (42 U.S.C. 1395cc(a)) is amend7 ed— 

8 (A) in paragraph (1)— 

9 (i) in subparagraph (X), by striking 

10 ‘‘and’’ at the end; 

11 (ii) in subparagraph (Y), by striking 

12 the period at the end and inserting ‘‘; 

13 and’’; and 

14 (iii) by inserting after subparagraph 

15 (Y) the following new subparagraph: 

16 ‘‘(Z) subject to paragraph (4), in the case 

17 of a hospital located in a county whose popu18 lation density is above the median population 

19 density for all counties in the United States 

20 with respect to which there is a Herfindahl21 Hirschman Index (HHI) of greater than 4,000, 

22 to apply the average reimbursement rate with 

23 respect to individuals (regardless of whether 

24 such an individual is entitled to or eligible for 

25 benefits under this title, but excluding individVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00148 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 uals eligible for medical assistance under a 

2 State plan under title XIX) furnished items and 

3 services at such hospital that would be billable 

4 under this title for such items and services if 

5 furnished by such hospital to an individual en6 rolled under part C.’’; and 

7 (B) by adding at the end the following new 

8 paragraph: 

9 ‘‘(4)(A) The requirement under paragraph 

10 (1)(Z) shall not apply in the case of a hospital in a 

11 hospital referral region if— 

12 ‘‘(i) the HRR market share of such hos13 pital (as determined under subparagraph (B)) 

14 is less than 0.15; or 

15 ‘‘(ii) the hospital is located in a rural area 

16 (as defined in section 1886(d)(2)(D)). 

17 ‘‘(B) For purposes of subparagraph (A), the 

18 HRR market share of a hospital in a hospital refer19 ral region is equal to— 

20 ‘‘(i) the total revenue of the hospital, di21 vided by 

22 ‘‘(ii) the total revenue of all hospitals in 

23 the hospital referral region.’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply with respect to items 

3 and services furnished on or after January 1, 2025. 

4 (c) GRANTS FOR HOSPITAL INFRASTRUCTURE IM5 PROVEMENT.— 

6 (1) IN GENERAL.—The Secretary of Health and 

7 Human Services shall carry out a grant program 

8 under which the Secretary shall provide grants to el9 igible States, in accordance with this subsection. 

10 (2) USES.—An eligible State receiving a grant 

11 under this subsection may use such grant to improve 

12 the State hospital infrastructure and to supplement 

13 any other funds provided for a purpose authorized 

14 under a State or local hospital grant program under 

15 State law. 

16 (3) ELIGIBILITY.— 

17 (A) IN GENERAL.—An eligible State may 

18 receive not more than one grant under this sub19 section with respect to each qualifying criterion 

20 described in subparagraph (B) that is met by 

21 the State. 

22 (B) ELIGIBLE STATE.—For purposes of 

23 this subsection, the term ‘‘eligible State’’ means 

24 a State that meets any one or more of the fol25 lowing qualifying criteria: 


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1 (i) The State does not have in effect 

2 any State certificate of need law that re3 quires a health care provider to provide to 

4 a regulatory body a certification that the 

5 community needs the services provided by 

6 the health care provider. 

7 (ii) The State has in effect State 

8 scope of practice laws that— 

9 (I) allow advanced practice pro10 viders (such as nurse practitioners, 

11 advanced practice registered nurses, 

12 clinical nurse specialists, and physi13 cian assistants) to evaluate patients; 

14 diagnose, order, and interpret diag15 nostic tests; and initiate and manage 

16 treatments; or 

17 (II) provide that the only jus18 tification for limiting the scope of 

19 practice of a health care provider is 

20 safety to the public. 

21 (iii) The State does not have in effect 

22 any State laws that require managed care 

23 plans to accept into the network of such 

24 plan any qualified provider who is willing 


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1 to accept the terms and conditions of the 

2 managed care plan. 

3 (iv) The State does not have in effect 

4 any Certificate of Public Advantage laws 

5 that clearly articulate the State’s intent to 

6 displace competition in favor of regulation 

7 or that violate State or Federal antitrust 

8 laws. 

9 (v) The State does not have in effect 

10 any network adequacy laws regulating a 

11 health plan’s ability to deliver benefits by 

12 providing reasonable access to a sufficient 

13 number of in-network primary care and 

14 specialty physicians, as well as all health 

15 care services included under the terms of 

16 an insuree’s contract with a health insurer. 

17 (4) FUNDING.—There is authorized to be ap18 propriated to carry out this subsection 

19 $1,000,000,000 for each of the fiscal years 2025 

20 through 2034. Funds appropriated under this para21 graph shall remain available until expended. 

22 (d) CRITICAL ACCESS HOSPITAL REIMBURSEMENT

23 RATES.— 

24 (1) PART A.—Section 1814(l)(1) of the Social 

25 Security Act (42 U.S.C. 1395f(l)(1)) is amended by 


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1 inserting ‘‘(or, for 2025, 102, plus 1 percentage 

2 point for each subsequent year through 2033, and 

3 110 for each subsequent year thereafter)’’ after 

4 ‘‘101’’. 

5 (2) PART B.—Section 1834(g)(1) of such Act 

6 (42 U.S.C. 1395m(g)(1)) is amended by inserting 

7 ‘‘(or, for 2025, 102, plus 1 percentage point for each 

8 subsequent year through 2033, and 110 for each 

9 subsequent year thereafter)’’ after ‘‘101’’. 

10 SEC. 302. AUTHORITY OF FEDERAL TRADE COMMISSION 

11 OVER CERTAIN TAX-EXEMPT ORGANIZA12 TIONS. 

13 Section 4 of the Federal Trade Commission Act (15 

14 U.S.C. 44) is amended, in the undesignated paragraph re15 lating to the definition of the term ‘‘Corporation’’— 

16 (1) by striking ‘‘, and any’’ and inserting ‘‘, 

17 any’’; and 

18 (2) by inserting before the period at the end the 

19 following: ‘‘, and any organization described in sec20 tion 501(c)(3) of the Internal Revenue Code of 1986 

21 that is exempt from taxation under section 501(a) of 

22 such Code’’. 


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1 SEC. 303. LEVELING THE PLAYING FIELD BETWEEN PAYERS 

2 AND PROVIDERS. 

3 (a) EXEMPTION.—It shall not be a violation of the 

4 antitrust laws for one or more private health insurer 

5 issuers or their designated agents to jointly negotiate 

6 prices of particular hospital services with a hospital pro7 vider with regards to the reimbursement policies of the 

8 insurers for those services. 

9 (b) DEFINITIONS.—For purposes of this section: 

10 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

11 laws’’ has the meaning given it in subsection (a) of 

12 the 1st section of the Clayton Act (15 U.S.C. 12(a)), 

13 except that such term includes section 5 of the Fed14 eral Trade Commission Act (15 U.S.C. 45) to the 

15 extent such section 5 applies to unfair methods of 

16 competition. 

17 (2) HEALTH INSURANCE ISSUER.—The term 

18 ‘‘health insurance issuer’’ means an insurance com19 pany, insurance service, or insurance organization 

20 (including a health maintenance organization, as de21 fined in subparagraph (C)) which is licensed to en22 gage in the business of insurance in a State and 

23 which is subject to State law which regulates insur24 ance (within the meaning of section 514(b)(2) of the 

25 Employee Retirement Income Security Act of 1974 


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1 (29 U.S.C. 1144(b)(2)). Such term does not include 

2 a group health plan. 

3 (3) HEALTH MAINTENANCE ORGANIZATION.— 

4 The term ‘‘health maintenance organization’’ 

5 means— 

6 (A) a Federally qualified health mainte7 nance organization (as defined in section 

8 300e(a) of title 42 of the United States Code), 

9 (B) an organization recognized under State 

10 law as a health maintenance organization, or 

11 (C) a similar organization regulated under 

12 State law for solvency in the same manner and 

13 to the same extent as such a health mainte14 nance organization. 

15 (c) EFFECTIVE DATE.—This section shall take effect 

16 on the date of the enactment of this Act but shall not 

17 apply with respect to conduct that occurs before such date. 

18 SEC. 304. BANNING ANTICOMPETITIVE TERMS IN FACILITY 

19 AND INSURANCE CONTRACTS THAT LIMIT AC20 CESS TO HIGHER QUALITY, LOWER COST 

21 CARE. 

22 (a) IN GENERAL.—Section 2729B of the Public 

23 Health Service Act, as added by section 301, is amended 

24 by adding at the end the following: 


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1 ‘‘(b) PROTECTING HEALTH PLANS NETWORK DE2 SIGN FLEXIBILITY.— 

3 ‘‘(1) IN GENERAL.—A group health plan or a 

4 health insurance issuer offering group or individual 

5 health insurance coverage shall not enter into an 

6 agreement with a provider, network or association of 

7 providers, or other service provider offering access to 

8 a network of service providers if such agreement, di9 rectly or indirectly— 

10 ‘‘(A) restricts the group health plan or 

11 health insurance issuer from— 

12 ‘‘(i) directing or steering enrollees to 

13 other health care providers; or 

14 ‘‘(ii) offering incentives to encourage 

15 enrollees to utilize specific health care pro16 viders; 

17 ‘‘(B) requires the group health plan or 

18 health insurance issuer to enter into any addi19 tional contract with an affiliate of the provider, 

20 such as an affiliate of the provider, as a condi21 tion of entering into a contract with such pro22 vider; 

23 ‘‘(C) requires the group health plan or 

24 health insurance issuer to agree to payment 


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1 rates or other terms for any affiliate not party 

2 to the contract of the provider involved; or 

3 ‘‘(D) restricts other group health plans or 

4 health insurance issuers not party to the con5 tract from paying a lower rate for items or 

6 services than the contracting plan or issuer 

7 pays for such items or services. 

8 ‘‘(2) ADDITIONAL REQUIREMENT FOR SELF-IN9 SURED PLANS.—A self-insured group health plan 

10 shall not enter into an agreement with a provider, 

11 network or association of providers, third-party ad12 ministrator, or other service provider offering access 

13 to a network of providers if such agreement directly 

14 or indirectly requires the group health plan to cer15 tify, attest, or otherwise confirm in writing that the 

16 group health plan is bound by restrictive contracting 

17 terms between the service provider and a third-party 

18 administrator that the group health plan is not 

19 party to, without a disclosure that such terms exist. 

20 ‘‘(3) EXCEPTION FOR CERTAIN GROUP MODEL

21 ISSUERS.—Paragraph (1)(A) shall not apply to a 

22 group health plan or health insurance issuer offering 

23 group or individual health insurance coverage with 

24 respect to— 


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1 ‘‘(A) a health maintenance organization 

2 (as defined in section 2791(b)(3)), if such 

3 health maintenance organization operates pri4 marily through exclusive contracts with multi5 specialty physician groups, nor to any arrange6 ment between such a health maintenance orga7 nization and its affiliates; or 

8 ‘‘(B) a value-based network arrangement, 

9 such as an exclusive provider network, account10 able care organization, center of excellence, a 

11 provider sponsored health insurance issuer that 

12 operates primarily through aligned multi-spe13 cialty physician group practices or integrated 

14 health systems, or such other similar network 

15 arrangements as determined by the Secretary 

16 through rulemaking. 

17 ‘‘(4) ATTESTATION.—A group health plan or 

18 health insurance issuer offering group or individual 

19 health insurance coverage shall annually submit to, 

20 as applicable, the applicable authority described in 

21 section 2723 or the Secretary of Labor, an attesta22 tion that such plan or issuer is in compliance with 

23 the requirements of this subsection. 

24 ‘‘(c) MAINTENANCE OF EXISTING HIPAA, GINA, 

25 AND ADA PROTECTIONS.—Nothing in this section shall 


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1 modify, reduce, or eliminate the existing privacy protec2 tions and standards provided by reason of State and Fed3 eral law, including the requirements of parts 160 and 164 

4 of title 45, Code of Federal Regulations (or any successor 

5 regulations). 

6 ‘‘(d) REGULATIONS.—The Secretary, not later than 

7 1 year after the date of enactment of the Fair Care Act 

8 of 2024, shall promulgate regulations to carry out this sec9 tion. 

10 ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec11 tion shall be construed to limit network design or cost or 

12 quality initiatives by a group health plan or health insur13 ance issuer, including accountable care organizations, ex14 clusive provider organizations, networks that tier providers 

15 by cost or quality or steer enrollees to centers of excel16 lence, or other pay-for-performance programs. 

17 ‘‘(f) CLARIFICATION WITH RESPECT TO ANTITRUST

18 LAWS.—Compliance with this section does not constitute 

19 compliance with the antitrust laws, as defined in sub20 section (a) of the first section of the Clayton Act (15 

21 U.S.C. 12(a)).’’. 

22 (b) EFFECTIVE DATE.—Section 2729B of the Public 

23 Health Service Act (as added by section 301 and amended 

24 by subsection (a)) shall apply with respect to any contract 

25 entered into on or after the date that is 18 months after 


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1 the date of enactment of this Act. With respect to an ap2 plicable contract that is in effect on the date of enactment 

3 of this Act, such section 2729B shall apply on the earlier 

4 of the date of renewal of such contract or 3 years after 

5 such date of enactment. 

6 SEC. 305. REPEALING ELIGIBILITY OF CERTAIN ACOS. 

7 (a) IN GENERAL.—Section 1899(b)(1) of the Social 

8 Security Act (42 U.S.C. 1395jjj(b)(1)) is amended by 

9 striking subparagraphs (C) through (E). 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 subsection (a) shall take effect on January 1, 2025. 

12 SEC. 306. REPEAL OF HEALTH CARE REFORM PROVISIONS 

13 LIMITING MEDICARE EXCEPTION TO THE 

14 PROHIBITION ON CERTAIN PHYSICIAN RE15 FERRALS FOR HOSPITALS. 

16 Sections 6001 and 10601 of the Patient Protection 

17 and Affordable Care Act (Public Law 111–148; 124 Stat. 

18 684, 1005) and section 1106 of the Health Care and Edu19 cation Reconciliation Act of 2010 (Public Law 111–152; 

20 124 Stat. 1049) are repealed and the provisions of law 

21 amended by such sections are restored as if such sections 

22 had never been enacted. 


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1 SEC. 307. ALTERNATIVE PAYMENT MODEL FOR CERTAIN 

2 SHOPPABLE PROCEDURES. 

3 (a) IN GENERAL.—A group health plan and a health 

4 insurance issuer offering group or individual health insur5 ance coverage (as such terms are defined in section 2791 

6 of the Public Health Service Act (42 U.S.C. 300gg–91)) 

7 may elect, with respect to a plan year, to provide a set 

8 payment amount to an enrollee under such plan or cov9 erage for certain shoppable procedures (as defined in sub10 section (b)) in accordance with the provisions of this sec11 tion in lieu of otherwise providing coverage for such a pro12 cedure under such plan or coverage, but only if the en13 rollee so agrees to such set payment amount. 

14 (b) DEFINITION.—For purposes of this section, the 

15 term ‘‘shoppable procedure’’ means a procedure specified 

16 by the Secretary of Health and Human Services (in this 

17 section referred to as the ‘‘Secretary’’) with respect to 

18 which individuals may be expected to compare prices for 

19 such procedure of health care providers and facilities, in20 cluding primary and preventive services, prenatal care and 

21 childbirth, common surgeries that can be scheduled, and 

22 other similar services. 

23 (c) SET PAYMENT RULES.—A set payment described 

24 in subsection (a) under a group health plan or group or 

25 individual health insurance coverage offered by a health 

26 insurance issuer shall— 


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1 (1) be disclosed prior to beginning of each plan 

2 year such payment is in effect and shall not vary 

3 during such plan year; 

4 (2) be the same amount with respect to the 

5 same shoppable procedure furnished in a geographic 

6 area (as defined by the Secretary); 

7 (3) not be less than the median negotiated rate 

8 for all group health plans and health insurance cov9 erage offered in such area for such procedure; 

10 (4) be made available to an enrollee under such 

11 plan or such coverage regardless of the provider or 

12 facility furnishing the shoppable procedure; 

13 (5) represent the entirety of the payment obli14 gation of such plan or such issuer with respect to 

15 such procedure; and 

16 (6) may be retained by such enrollee to the ex17 tent that the amount of such payment exceeds the 

18 amount charged by such provider or facility for such 

19 procedure. 

20 (d) PROVISION OF PRICE INFORMATION.—Each 

21 health care provider and facility that may furnish a 

22 shoppable procedure during a year shall post in a public 

23 area a notice containing the prices that will be charged 

24 by such provider of facility with respect to each such pro25 cedure to individuals making payment for such services 


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1 pursuant to a set payment amount described in subsection 

2 (a). 

3 (e) EHB WAIVER AUTHORITY.—The Secretary may 

4 waive such provisions of section 1302(b) of the Patient 

5 Protection and Affordable Care Act (42 U.S.C. 18022(b)) 

6 with respect to a group health plan, health insurance 

7 issuer offering group or individual health insurance cov8 erage, and a plan year as the Secretary determines nec9 essary to allow for the provision of set payment amounts 

10 described in subsection (a). 

11 Subtitle B—Price Transparency 

12 SEC. 321. PRICE TRANSPARENCY REQUIREMENTS. 

13 (a) HOSPITALS.—Section 2718(e) of the Public 

14 Health Service Act (42 U.S.C. 300gg–18(e)) is amend15 ed— 

16 (1) by striking ‘‘Each hospital’’ and inserting 

17 the following: 

18 ‘‘(1) IN GENERAL.—Each hospital’’; 

19 (2) by inserting ‘‘, in a machine-readable for20 mat, via open application program interfaces 

21 (APIs)’’ after ‘‘a list’’; 

22 (3) by inserting ‘‘, along with such additional 

23 information as the Secretary may require with re24 spect to such charges for purposes of promoting 

25 public awareness of hospital pricing in advance of 


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1 receiving a hospital item or service’’ before the pe2 riod; and 

3 (4) by adding at the end the following: 

4 ‘‘(2) DEFINITION OF STANDARD CHARGES.— 

5 Notwithstanding any other provision of law, for pur6 poses of paragraph (1), the term ‘standard charges’ 

7 means the rates hospitals, including providers or en8 tities that contract with or practice at a hospital, 

9 charge for all items and services at a minimum, 

10 chargemaster rates, rates that hospitals negotiate 

11 with third party payers across all plans, including 

12 those related to a patient’s specific plan, discounted 

13 cash prices, and other rates determined by the Sec14 retary. 

15 ‘‘(3) ENFORCEMENT.—In addition to any other 

16 enforcement actions or penalties that may apply 

17 under subsection (b)(3) or another provision of law, 

18 a hospital that fails to provide the information re19 quired by this subsection and has not completed a 

20 corrective action plan to comply with the require21 ments of such subsection shall be subject to a civil 

22 monetary penalty of an amount not to exceed $300 

23 per day that the violation is ongoing as determined 

24 by the Secretary. Such penalty shall be imposed and 

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1 alties under subsection (a) of section 1128A of the 

2 Social Security Act are imposed and collected.’’. 

3 (b) TRANSPARENCY IN COVERAGE.—Section 

4 1311(e)(3) of the Patient Protection and Affordable Care 

5 Act (42 U.S.C. 18031(e)(3)) is amended— 

6 (1) in subparagraph (A)— 

7 (A) in clause (vii), by inserting before the 

8 period the following: ‘‘, including, for all items 

9 and services covered under the plan, aggregate 

10 information on specific payments the plan has 

11 made to out-of-network health care providers on 

12 behalf of plan enrollees’’; 

13 (B) by designating clause (ix) as clause 

14 (x); and 

15 (C) by inserting after clause (viii), the fol16 lowing: 

17 ‘‘(ix) Information on the specific nego18 tiated payment rates between the plan and 

19 health care providers for all items and 

20 services covered under the plan.’’; 

21 (2) in subparagraph (B)— 

22 (A) in the heading, by striking ‘‘USE’’ and 

23 inserting ‘‘DELIVERY METHODS AND USE’’; 

24 (B) by inserting ‘‘, as applicable,’’ after 

25 ‘‘English proficiency’’; and 


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1 (C) by inserting after the second sentence, 

2 the following: ‘‘The Secretary shall establish 

3 standards for electronic delivery and access to 

4 such information by individuals, free of charge, 

5 in machine readable format, through an Inter6 net website and via open APIs.’’; 

7 (3) in subparagraph (C)— 

8 (A) in the first sentence, by inserting ‘‘or 

9 out-of-network provider’’ after ‘‘item or service 

10 by a participating provider’’; 

11 (B) in the second sentence, by striking 

12 ‘‘through an Internet website’’ and inserting 

13 ‘‘free of charge, in machine readable format, 

14 through an Internet website, and via open 

15 APIs, in accordance with standards established 

16 by the Secretary,’’; and 

17 (C) by adding at the end the following: 

18 ‘‘Such information shall include specific nego19 tiated rates that allow for comparison between 

20 providers and across plans, and related to a pa21 tient’s specific plan, including after an enrollee 

22 has exceeded their deductible responsibility.’’; 

23 and 


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1 (4) in subparagraph (D) by striking ‘‘subpara2 graph (A)’’ and inserting ‘‘subparagraphs (A), (B), 

3 and (C)’’. 

4 SEC. 322. ENSURING ENROLLEE ACCESS TO COST-SHARING 

5 INFORMATION. 

6 (a) IN GENERAL.—Subpart II of part A of title 

7 XXVII of the Public Health Service Act (42 U.S.C. 

8 300gg–11 et seq.), as amended by the preceding sections, 

9 is further amended by adding at the end the following: 

10 ‘‘SEC. 2729F. PROVISION OF COST-SHARING INFORMATION. 

11 ‘‘(a) PROVIDER DISCLOSURES.—A provider that is 

12 in-network with respect to a group health plan or a health 

13 insurance issuer offering group or individual health insur14 ance coverage shall provide to an enrollee in the plan or 

15 coverage who submits a request for the information de16 scribed in paragraph (1) or (2), together with accurate 

17 and complete information about the enrollee’s coverage 

18 under the applicable plan or coverage— 

19 ‘‘(1) as soon as practicable and not later than 

20 2 business days after the enrollee requests such in21 formation, a good faith estimate of the expected en22 rollee cost-sharing for the provision of a particular 

23 health care service (including any service that is rea24 sonably expected to be provided in conjunction with 

25 such specific service); and 


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1 ‘‘(2) as soon as practicable and not later than 

2 2 business days after an enrollee requests such in3 formation, the contact information for any ancillary 

4 providers for a scheduled health care service. 

5 ‘‘(b) INSURER DISCLOSURES.—A group health plan 

6 or a health insurance issuer offering group or individual 

7 health insurance coverage shall provide an enrollee in the 

8 plan or coverage with a good faith estimate of the enroll9 ee’s cost-sharing (including deductibles, copayments, and 

10 coinsurance) for which the enrollee would be responsible 

11 for paying with respect to a specific health care service 

12 (including any service that is reasonably expected to be 

13 provided in conjunction with such specific service), as soon 

14 as practicable and not later than 2 business days after 

15 a request for such information by an enrollee. 

16 ‘‘(c) ENFORCEMENT.— 

17 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a 

18 health care provider that violates a requirement 

19 under subsection (a) shall be subject to a civil mone20 tary penalty of not more than $10,000 for each act 

21 constituting such violation. 

22 ‘‘(2) PROCEDURE.—The provisions of section 

23 1128A of the Social Security Act, other than sub24 sections (a) and (b) and the first sentence of sub25 section (c)(1) of such section, shall apply to civil 


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1 money penalties under this subsection in the same 

2 manner as such provisions apply to a penalty or pro3 ceeding under section 1128A of the Social Security 

4 Act.’’. 

5 (b) EFFECTIVE DATE.—Section 2729G of the Public 

6 Health Service Act, as added by subsection (a), shall apply 

7 with respect to plan years beginning on or after the date 

8 that is 18 months after the date of enactment of this Act. 

9 SEC. 323. ACCESS OF INDIVIDUALS TO PROTECTED HEALTH 

10 INFORMATION. 

11 The provisions of section 164.524 of title 45, Code 

12 of Federal Regulations, as in effect on the day before the 

13 date of the enactment of this Act, shall have the force and 

14 effect of law. 

15 SEC. 324. TIMELY BILLS FOR PATIENTS. 

16 (a) IN GENERAL.— 

17 (1) AMENDMENT.—Part P of title III of the 

18 Public Health Service Act (42 U.S.C. 280g et seq.) 

19 is amended by adding at the end the following: 

20 ‘‘SEC. 399V–7. TIMELY BILLS FOR PATIENTS. 

21 ‘‘(a) IN GENERAL.—The Secretary shall require— 

22 ‘‘(1) health care facilities, or in the case of 

23 practitioners providing services outside of such a fa24 cility, practitioners, to provide to patients a list of 

25 services rendered during the visit to such facility or 


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1 practitioner, and, in the case of a facility, the name 

2 of the provider for each such service, upon discharge 

3 or end of the visit or by postal or electronic commu4 nication as soon as practicable and not later than 5 

5 calendar days after discharge or date of visit; and 

6 ‘‘(2) health care facilities and practitioners to 

7 furnish all adjudicated bills to the patient as soon as 

8 practicable, but not later than 45 calendar days 

9 after discharge or date of visit. 

10 ‘‘(b) PAYMENT AFTER BILLING.—No patient may be 

11 required to pay a bill for health care services any earlier 

12 than 35 days after the postmark date of a bill for such 

13 services. 

14 ‘‘(c) EFFECT OF VIOLATION.— 

15 ‘‘(1) NOTIFICATION AND REFUND REQUIRE16 MENTS.— 

17 ‘‘(A) PROVIDER LISTS.—If a facility or 

18 practitioner fails to provide a patient a list as 

19 required under subsection (a)(1), such facility 

20 or practitioner shall report such failure to the 

21 Secretary. 

22 ‘‘(B) BILLING.—If a facility or practitioner 

23 bills a patient after the 45-calendar-day period 

24 described in subsection (a)(2), such facility or 

25 practitioner shall— 


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1 ‘‘(i) report such bill to the Secretary; 

2 and 

3 ‘‘(ii) refund the patient for the full 

4 amount paid in response to such bill with 

5 interest, at a rate determined by the Sec6 retary. 

7 ‘‘(2) CIVIL MONETARY PENALTIES.— 

8 ‘‘(A) IN GENERAL.—The Secretary may 

9 impose civil monetary penalties of up to 

10 $10,000 a day on any facility or practitioner 

11 that— 

12 ‘‘(i) fails to provide a list required 

13 under subsection (a)(1) more than 10 

14 times, beginning on the date of such tenth 

15 failure; 

16 ‘‘(ii) submits more than 10 bills out17 side of the period described in subsection 

18 (a)(2), beginning on the date on which 

19 such facility or practitioner sends the tenth 

20 such bill; 

21 ‘‘(iii) fails to report to the Secretary 

22 any failure to provide lists as required 

23 under paragraph (1)(A), beginning on the 

24 date that is 45 calendar days after dis25 charge or visit; or 


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1 ‘‘(iv) fails to send any bill as required 

2 under subsection (a)(2), beginning on the 

3 date that is 45 calendar days after the 

4 date of discharge or visit, as applicable. 

5 ‘‘(B) PROCEDURE.—The provisions of sec6 tion 1128A of the Social Security Act, other 

7 than subsections (a) and (b) and the first sen8 tence of subsection (c)(1) of such section, shall 

9 apply to civil money penalties under this sub10 section in the same manner as such provisions 

11 apply to a penalty or proceeding under section 

12 1128A of the Social Security Act. 

13 ‘‘(3) SAFE HARBOR.—The Secretary may ex14 empt a practitioner or facility from the penalties 

15 under paragraph (2)(A) or extend the period of time 

16 specified under subsection (a)(2) for compliance with 

17 such subsection if a practitioner or facility— 

18 ‘‘(A) makes a good-faith attempt to send a 

19 bill within 30 days but is unable to do so be20 cause of an incorrect address; or 

21 ‘‘(B) experiences extenuating cir22 cumstances (as defined by the Secretary), such 

23 as a hurricane or cyberattack, that may reason24 ably delay delivery of a timely bill.’’. 


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1 (2) RULEMAKING.—Not later than 1 year after 

2 the date of enactment of this Act, the Secretary 

3 shall promulgate final regulations to define the term 

4 ‘‘extenuating circumstance’’ for purposes of section 

5 399V–7(c)(3)(B) of the Public Health Service Act, 

6 as added by paragraph (1). 

7 (b) GROUP HEALTH PLAN AND HEALTH INSURANCE

8 ISSUER REQUIREMENTS.—Subpart II of part A of title 

9 XXVII of the Public Health Service Act (42 U.S.C. 

10 300gg–11), as amended by the preceding sections, is fur11 ther amended by adding at the end the following: 

12 ‘‘SEC. 2729D. TIMELY BILLS FOR PATIENTS. 

13 ‘‘(a) IN GENERAL.—A group health plan or health 

14 insurance issuer offering group or individual health insur15 ance coverage shall have in place business practices with 

16 respect to in-network facilities and practitioners to ensure 

17 that claims are adjudicated in order to facilitate facility 

18 and practitioner compliance with the requirements under 

19 section 399V–7(a). 

20 ‘‘(b) CLARIFICATION.—Nothing in subsection (a) pro21 hibits a provider and a group health plan or health insur22 ance issuer from establishing in a contract the timeline 

23 for submission by either party to the other party of billing 

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1 vider and the plan or issuer necessary for meeting the 

2 deadline described in section 399V–7(a)(2).’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 subsections (a) and (b) shall take effect 6 months after 

5 the date of enactment of this Act. 

6 SEC. 325. ADVISORY GROUP ON REDUCING BURDEN OF 

7 HOSPITAL ADMINISTRATIVE REQUIREMENTS. 

8 (a) IN GENERAL.—Not later than January 1, 2025, 

9 the Secretary of Health and Human Services shall convene 

10 an advisory group to provide, in accordance with this sec11 tion, recommendations on ways the Federal Government 

12 could reduce the burden of administrative requirements on 

13 hospitals. 

14 (b) RECOMMENDATIONS.—Not later than January 1, 

15 2026, the advisory board convened under this section 

16 shall— 

17 (1) submit to the Secretary of Health and 

18 Human Services recommendations described under 

19 subsection (a) for executive action and any rec20 ommendations for State actions for potential consid21 eration in making grants under section 2(c) to 

22 States; and 

23 (2) submit to Congress recommendations de24 scribed under subsection (a) for legislative proposals. 


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1 (c) MEMBERSHIP.—The advisory board under this 

2 section shall consist of the following members: 

3 (1) Three representatives of companies that 

4 have— 

5 (A) geographically distributed workforces; 

6 (B) at least 10,000 employees; and 

7 (C) no more than 10 percent of such em8 ployees in any single State. 

9 (2) Three representatives of health insurance 

10 issuers and health plans, consisting of— 

11 (A) one representative of for-profit health 

12 insurance issuers and health plans with at least 

13 20,000,000 enrollees in the employer-sponsored 

14 market; 

15 (B) one representative of non-profit health 

16 insurance issuers and health plans operating in 

17 at least 5 States; and 

18 (C) one representative of non-profit health 

19 insurance issuers and health plans operating in 

20 a rural State (as defined by the Census Bu21 reau). 

22 (3) Seven public policy experts in the field of 

23 hospital consolidation. 


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1 SEC. 326. DATA REPORTING TO IMPROVE THE TRANS2 PARENCY REGARDING HOW 340B HOSPITAL 

3 COVERED ENTITIES PROVIDE CARE FOR PA4 TIENTS. 

5 Section 340B of the Public Health Service Act (42 

6 U.S.C. 256b) is amended by adding at the end the fol7 lowing new subsection: 

8 ‘‘(f) DATA REPORTING TO IMPROVE THE TRANS9 PARENCY REGARDING HOW HOSPITAL COVERED ENTI10 TIES PROVIDE CARE FOR PATIENTS.— 

11 ‘‘(1) IN GENERAL.—Beginning on the date that 

12 is 14 months after the date of the enactment of this 

13 subsection, and annually thereafter, subject to sub14 paragraph (C), a covered entity described in sub15 paragraph (L) or (M) of subsection (a)(4), unless 

16 otherwise indicated, shall report on the following, 

17 with respect to the previous year, in such a manner 

18 and form as specified by the Secretary: 

19 ‘‘(A) The following information: 

20 ‘‘(i) With respect to such covered enti21 ty and with respect to each child site of 

22 such entity (as referenced in paragraph 

23 (11)), the number and percentage of indi24 viduals who are dispensed or administered 

25 drugs that are subject to an agreement 

26 under this section, organized by form of 


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1 health insurance coverage of such individ2 uals (including at least by the Medicare 

3 program under title XVIII of the Social 

4 Security Act, the Medicaid program under 

5 title XIX of such Act, health insurance 

6 coverage offered in the individual or group 

7 market or a group health plan (as such 

8 terms are defined in section 2791), and 

9 uninsured). 

10 ‘‘(ii) With respect to each such child 

11 site of such entity, the total costs incurred 

12 at each such site and the cost incurred at 

13 each such site for charity care as defined 

14 in line 23 of worksheet S–10 to the Medi15 care cost report or in any successor form. 

16 ‘‘(B) The aggregate amount of gross reim17 bursement received by each such covered entity 

18 (including child sites of such entity) described 

19 in such subparagraph (L) or (M) for all drugs 

20 purchased that are subject to an agreement 

21 under this section and the entity’s aggregate 

22 acquisition cost for such drugs. 

23 ‘‘(C) In the case of covered entity de24 scribed in subparagraph (L) of subsection 

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1 cation (and at least annually thereafter), the 

2 contract that is the basis for eligibility under 

3 the requirement under clause (i) of such sub4 paragraph and any modifications to such con5 tract for purposes of review by the Secretary. 

6 ‘‘(D) With respect to such covered entity 

7 and with respect to each child site of such enti8 ty, the name of all third-party vendors or other 

9 similar entities that the covered entity contracts 

10 with to provide services associated with the pro11 gram under this section. 

12 ‘‘(2) AVAILABILITY OF INFORMATION.— 

13 ‘‘(A) IN GENERAL.—The Secretary shall 

14 make data reported by covered entities under 

15 subparagraphs (A), (C), and (D) of paragraph 

16 (1) available on the public website of the De17 partment of Health and Human Services in an 

18 electronic and searchable format, which may in19 clude the 340B Office of Pharmacy Affairs In20 formation System or a successor to such sys21 tem. 

22 ‘‘(B) FORMAT.—Data made available 

23 under subparagraph (A) shall be made available 

24 in a manner that shows each category of data 

25 reported both in the aggregate and identified by 


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1 covered entities described in subparagraphs (L) 

2 and (M) of subsection (a)(4) and child sites of 

3 such covered entities. In carrying out this para4 graph, with respect to data reported pursuant 

5 to paragraph (1)(C), the Secretary shall ensure 

6 that any proprietary information shall be re7 dacted from contracts submitted pursuant to 

8 such paragraph (1)(C) before posting such 

9 data. 

10 ‘‘(3) INTERIM FINAL REGULATIONS.—The Sec11 retary shall issue interim final regulations no later 

12 than the date that is 6 months after the date of the 

13 enactment of this subsection, to carry out this sub14 section and shall finalize such regulations prior to 

15 the end of the moratorium period to which sub16 section (a)(11) applies. 

17 ‘‘(4) REPORTS TO CONGRESS.— 

18 ‘‘(A) OIG REPORT.—Not later than 2 

19 years after the date of the enactment of this 

20 subsection, the Office of the Inspector General 

21 shall submit to Congress a final report on the 

22 level of charity care provided by covered entities 

23 described in subparagraphs (L) and (M) of sub24 section (a)(4) and separately by child sites of 


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1 such covered entities, as reported in paragraph 

2 (1)(A). 

3 ‘‘(B) GAO REPORTS.— 

4 ‘‘(i) INITIAL REPORT.—Not later than 

5 1 year after the date of the enactment of 

6 this subsection, the Comptroller General of 

7 the United States shall submit to Congress 

8 a report— 

9 ‘‘(I) analyzing the State and local 

10 government contracts intended to sat11 isfy the requirement under subsection 

12 (a)(4)(L)(i) for a covered entity to 

13 qualify as an entity described in sub14 paragraph (L) of subsection (a)(4); 

15 ‘‘(II) assessing the amount of 

16 care such contracts obligate such enti17 ty to provide to low-income individuals 

18 ineligible for Medicare under title 

19 XVIII of the Social Security Act and 

20 Medicaid under title XIX of such Act; 

21 and 

22 ‘‘(III) analyzing how these con23 tracts define low-income individuals 

24 and whether the Secretary reviews 

25 such determinations. 


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1 ‘‘(ii) SUBSEQUENT REPORT.—Not 

2 later than 2 years after the date of the en3 actment of this subsection, the Comptroller 

4 General of the United States shall submit 

5 to Congress a final report on the informa6 tion collected under paragraph (1)(B) re7 garding the difference between the aggre8 gate gross reimbursement and aggregate 

9 acquisition costs received by each such cov10 ered entity (including child sites of such 

11 entity) for drugs subject to an agreement 

12 under this section.’’. 

13 SEC. 327. REQUIRING 340B DRUG DISCOUNT PROGRAM RE14 PORTS BY DSH HOSPITAL COVERED ENTITIES 

15 ON LOW-INCOME UTILIZATION RATE OF OUT16 PATIENT HOSPITAL SERVICES. 

17 (a) IN GENERAL.—Section 340B(d)(2) of the Public 

18 Health Service Act (42 U.S.C. 256b(d)(2)) is amended— 

19 (1) in subparagraph (B)(i), by inserting before 

20 the period at the end the following: ‘‘, including, 

21 with respect to such updates made on or after one 

22 year after the date of enactment of the Act, by re23 quiring covered entities described in subsection 

24 (a)(4)(L) to submit (and to so regularly update) in25 formation described in subparagraph (C)’’; and 


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1 (2) by adding at the end the following new sub2 paragraph: 

3 ‘‘(C) INFORMATION ON LOW-INCOME UTI4 LIZATION RATE OF OUTPATIENT HOSPITAL

5 SERVICES.— 

6 ‘‘(i) IN GENERAL.—For purposes of 

7 subparagraph (B)(i), the information de8 scribed in this subparagraph, with respect 

9 to a covered entity described in subsection 

10 (a)(4)(L) and an update under such sub11 paragraph (B)(i), is— 

12 ‘‘(I) the low-income outpatient 

13 utilization rate of such covered entity 

14 for the most recent fiscal year; and 

15 ‘‘(II) the low-income outpatient 

16 utilization rate of off-site outpatient 

17 facilities, clinics, eligible off-site loca18 tions, and associated sites of such en19 tity identified as child sites of such 

20 entity pursuant to the identification 

21 system under subparagraph (B)(iv) 

22 for the most recent fiscal year. 

23 ‘‘(ii) LOW-INCOME OUTPATIENT UTI24 LIZATION RATE DEFINED.—In this sub25 paragraph, the term ‘low-income outpatient 


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1 utilization rate’ has the meaning given the 

2 term ‘low-income utilization rate’ under 

3 paragraph (3) of section 1923(b) of the 

4 Social Security Act, except that— 

5 ‘‘(I) clauses (i) and (ii) of sub6 paragraph (A) of such paragraph 

7 shall be applied as if— 

8 ‘‘(aa) each reference to ‘pa9 tient services’ were a reference to 

10 ‘patient services furnished on an 

11 outpatient basis’; and 

12 ‘‘(bb) for purposes of clause 

13 (i)(II) of this subparagraph, each 

14 reference to ‘hospital’ were a ref15 erence to ‘off-site outpatient fa16 cilities, clinics, eligible off-site lo17 cations, and associated sites of 

18 the hospital that are identified as 

19 child sites of the hospital pursu20 ant to the identification system 

21 under section 340B(d)(2)(B)(iv) 

22 of the Public Health Service Act’; 

23 and 


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1 ‘‘(II) clauses (i) and (ii) of sub2 paragraph (B) of such paragraph 

3 shall be applied as if— 

4 ‘‘(aa) each reference to ‘in5 patient hospital services’ were a 

6 reference to ‘outpatient hospital 

7 services’; and 

8 ‘‘(bb) for purposes of clause 

9 (i)(II) each reference to ‘hos10 pital’s charges’ were a reference 

11 to ‘charges of the off-site out12 patient facilities, clinics, eligible 

13 off-site locations, and associated 

14 sites of the hospital that are 

15 identified as child sites of the 

16 hospital pursuant to the identi17 fication system under section 

18 340B(d)(2)(B)(iv) of the Public 

19 Health Service Act’.’’. 

20 (b) ANNUAL REPORTS.—Not later than 1 year after 

21 the date of enactment of this Act, and annually thereafter, 

22 the Administrator of the Health Resources and Services 

23 Administration shall submit to Congress a report on infor24 mation submitted by covered entities for the previous year 

25 pursuant to the amendments made by subsection (a). 


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1 SEC. 328. EMPLOYER BENEFITS REPORTS. 

2 (a) IN GENERAL.—Subject to subsection (b), for each 

3 plan year beginning on or after 1 year after the date of 

4 enactment of this Act, a group health plan and a health 

5 insurance issuer offering group health insurance coverage 

6 shall provide to each individual enrolled in such plan or 

7 such coverage for such plan year a notification containing 

8 the following: 

9 (1) The amount the sponsor of such group 

10 health plan expended with respect to such individual 

11 under such plan for such plan year (or, in the case 

12 of a health insurance issuer offering group health in13 surance coverage, the amount the employer of such 

14 individual contributed for such coverage for such in15 dividual for such plan year). 

16 (2) The amount the sponsor of such group 

17 health plan expended with respect to such individual 

18 under such plan for each previous plan year (or, in 

19 the case of a health insurance issuer offering group 

20 health insurance coverage, the amount the employer 

21 of such individual contributed for such coverage for 

22 such individual for each previous plan year), if appli23 cable. 

24 (b) LIMITATION.—Subsection (a) shall not apply to 

25 a group health plan, or a health insurance issuer offering 

26 group health insurance coverage, for a plan year if, for 


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1 such plan year, the number of individuals enrolled under 

2 such plan or such coverage was less than 100. 

3 (c) PENALTY.—In the case that the Secretary of 

4 Health and Human Services determines that a group 

5 health plan or a health insurance issuer offering group 

6 health insurance failed to provide the notice required 

7 under subsection (a), the Secretary may impose a civil 

8 monetary penalty on the sponsor of such plan or such 

9 issuer, as applicable, in an amount not to exceed $100 

10 per individual enrolled in such plan or such coverage per 

11 day that such sponsor or issuer failed to provide such noti12 fication to such individual. 

13 (d) DEFINITIONS.—In this section, the terms ‘‘group 

14 health plan’’, ‘‘group health insurance coverage’’, ‘‘health 

15 insurance issuer’’, and ‘‘sponsor’’ have the meaning given 

16 such terms in section 2791 of the Public Health Service 

17 Act (42 U.S.C. 300gg–91). 

18 SEC. 329. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

19 ON PROFIT- AND REVENUE-SHARING IN 

20 HEALTH CARE. 

21 (a) STUDY.—Not later than 1 year after the date of 

22 enactment of this Act, the Comptroller General of the 

23 United States shall conduct a study to— 

24 (1) describe what is known about profit- and 

25 revenue-sharing relationships in the commercial 


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1 health care markets, including those relationships 

2 that— 

3 (A) involve one or more— 

4 (i) physician groups that practice 

5 within a hospital included in the profit- or 

6 revenue-sharing relationship, or refer pa7 tients to such hospital; 

8 (ii) laboratory, radiology, or pharmacy 

9 services that are delivered to privately in10 sured patients of such hospital; 

11 (iii) surgical services; 

12 (iv) hospitals or group purchasing or13 ganizations; or 

14 (v) rehabilitation or physical therapy 

15 facilities or services; and 

16 (B) include revenue- or profit-sharing 

17 whether through a joint venture, management 

18 or professional services agreement, or other 

19 form of gain-sharing contract; 

20 (2) describe Federal oversight of such relation21 ships, including authorities of the Department of 

22 Health and Human Services and the Federal Trade 

23 Commission to review such relationships and their 

24 potential to increase costs for patients, and identify 

25 limitations in such oversight; and 


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1 (3) as appropriate, make recommendations to 

2 improve Federal oversight of such relationships. 

3 (b) REPORT.—Not later than 1 year after the date 

4 of enactment of this Act, the Comptroller General of the 

5 United States shall prepare and submit a report on the 

6 study conducted under subsection (a) to the Committee 

7 on Health, Education, Labor, and Pensions of the Senate 

8 and the Committee on Education and Labor and Com9 mittee on Energy and Commerce of the House of Rep10 resentatives. 

11 Subtitle C—Prescription Drug 

12 Competition and Innovation 

13 SEC. 341. EXPEDITED DEVELOPMENT AND PRIORITY RE14 VIEW FOR GENERIC COMPLEX DRUG PROD15 UCTS. 

16 Subchapter A of chapter V of the Federal Food, 

17 Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend18 ed by adding at the end the following: 

19 ‘‘SEC. 524C. EXPEDITED DEVELOPMENT AND PRIORITY RE20 VIEW FOR GENERIC COMPLEX DRUG PROD21 UCTS. 

22 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Secretary 

23 shall establish a program to expedite the development of, 

24 and provide priority review under section 505(j) for, ge25 neric complex drug products. 


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1 ‘‘(b) REQUEST FOR DESIGNATION.—A sponsor of a 

2 generic complex drug product may request that the Sec3 retary designate such product for expedited development 

4 and priority review under this section. 

5 ‘‘(c) DESIGNATION PROCESS.— 

6 ‘‘(1) IN GENERAL.—Not later than 60 calendar 

7 days after the receipt of a request under subsection 

8 (b), the Secretary shall determine whether the prod9 uct that is the subject of the request meets the cri10 teria under subsection (e) to be considered a generic 

11 complex drug product. If the Secretary determines 

12 that the product meets the criteria, the Secretary 

13 shall designate the product for expedited develop14 ment and priority review. 

15 ‘‘(2) REVIEW.—Review of a request under sub16 section (b) shall be undertaken by a team that is 

17 composed of experienced staff and senior managers 

18 of the Food and Drug Administration. 

19 ‘‘(3) WITHDRAWAL.—The Secretary may not 

20 withdraw a designation granted under this section 

21 on the basis of the criteria under subsection (e) no 

22 longer applying because of the subsequent clearance 

23 or approval of any other product. 

24 ‘‘(d) EXPEDITED DEVELOPMENT AND PRIORITY RE25 VIEW GUIDANCE.— 


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1 ‘‘(1) CONTENT.—Not later than 1 year after 

2 the date of enactment of this section, the Secretary 

3 shall issue guidance on the implementation of this 

4 section. Such guidance shall— 

5 ‘‘(A) set forth the process by which a per6 son may seek a designation under subsection 

7 (c); 

8 ‘‘(B) provide a template for requests under 

9 subsection (b); 

10 ‘‘(C) identify the criteria the Secretary will 

11 use in evaluating a request for designation 

12 under this section; and 

13 ‘‘(D) identify the criteria and processes the 

14 Secretary will use to expedite the development 

15 and review of products designated under this 

16 section. 

17 ‘‘(2) PROCESS.—Prior to finalizing the guid18 ance under paragraph (1), the Secretary shall seek 

19 public comment on a draft version of that guidance. 

20 ‘‘(e) GENERIC COMPLEX DRUG PRODUCT DE21 FINED.—In this section, the term ‘generic complex drug 

22 product’ means a product that represents a complex ther23 apy that consists of or includes a drug that has been ap24 proved under section 505(j) and that— 


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1 ‘‘(1)(A) contains complex active ingredients 

2 (such as peptides, polymeric compounds, complex 

3 mixtures of active ingredients, and naturally sourced 

4 ingredients); 

5 ‘‘(B) is composed of complex formulations (such 

6 as liposomes or colloids); 

7 ‘‘(C) requires a complex route of delivery (such 

8 as locally acting drugs such as dermatological prod9 ucts and complex ophthalmological products and otic 

10 dosage forms that are formulated as suspensions, 

11 emulsions, or gels); or 

12 ‘‘(D) involves a complex dosage form (such as 

13 transdermals, metered dose inhalers, or extended re14 lease injectables); 

15 ‘‘(2) presents as a complex drug-device com16 bination product (such as auto injectors or metered 

17 dose inhalers); or 

18 ‘‘(3) is a product that would benefit from early 

19 scientific engagement due to complexity or uncer20 tainty concerning the approval pathway under sec21 tion 505(j).’’. 

22 SEC. 342. PREVENTING BLOCKING OF GENERIC DRUGS. 

23 (a) IN GENERAL.—Section 505(j)(5)(B)(iv) of the 

24 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

25 355(j)(5)(B)(iv)) is amended— 


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1 (1) in subclause (I), by striking ‘‘180 days after 

2 the date’’ and all that follows through ‘‘by any first 

3 applicant’’ and inserting ‘‘180 days after the earlier 

4 of the dates described in items (aa) and (bb) of sub5 clause (II)’’; 

6 (2) by redesignating subclause (II) as subclause 

7 (III); and 

8 (3) by inserting after subclause (I) the fol9 lowing: 

10 ‘‘(II) DATES DESCRIBED.— 

11 ‘‘(aa) FIRST DATE.—The 

12 date described in this item is the 

13 date of the first commercial mar14 keting of the drug (including the 

15 commercial marketing of the list16 ed drug) by any first applicant. 

17 ‘‘(bb) SECOND DATE.—The 

18 date described in this item is the 

19 date on which all of the following 

20 conditions are first met, provided 

21 no application submitted by any 

22 first applicant is approved on or 

23 before such date: 

24 ‘‘(AA) An application 

25 for the drug submitted by 


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1 an applicant other than a 

2 first applicant has received 

3 tentative approval and could 

4 receive approval, if no first 

5 applicant were eligible for 

6 180-day exclusivity under 

7 this clause, and such appli8 cant has not entered into an 

9 agreement that would pre10 vent commercial marketing 

11 upon approval and has sub12 mitted a notification to the 

13 Secretary documenting that 

14 it has not entered into an 

15 agreement that would pre16 vent commercial marketing. 

17 ‘‘(BB) Thirty-three 

18 months have passed since 

19 the date of submission of an 

20 application for the drug by 

21 one first applicant, if there 

22 is only one first applicant, 

23 or, in the case of more than 

24 one first applicant, 33 

25 months have passed since 


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1 the date of submission of all 

2 such applications. 

3 ‘‘(CC) Approval of an 

4 application for the drug sub5 mitted by at least one first 

6 applicant would not be pre7 cluded under clause (iii).’’. 

8 (b) INFORMATION.—Not later than 60 days after the 

9 date of enactment of this Act, the Secretary of Health and 

10 Human Services (referred to in this subsection as the 

11 ‘‘Secretary’’) shall publish, as appropriate and available, 

12 information sufficient to allow applicants to assess wheth13 er the conditions described in subitems (AA) through (CC) 

14 of section 505(j)(5)(B)(iv)(II)(bb) of the Federal Food, 

15 Drug, and Cosmetic Act (as amended by subsection (a)) 

16 have been or will be satisfied for all applications where 

17 the exclusivity period under (iv)(I) of section 505(j)(5)(B) 

18 of the Federal Food, Drug, and Cosmetic Act (as so 

19 amended) has not expired, and shall provide updates to 

20 reflect the most recent information available to the Sec21 retary. 

22 SEC. 343. ENSURING TIMELY ACCESS TO GENERICS. 

23 Section 505(q) of the Federal Food, Drug, and Cos24 metic Act (21 U.S.C. 355(q)) is amended— 

25 (1) in paragraph (1)— 


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1 (A) in subparagraph (A)(i), by inserting ‘‘, 

2 10.31,’’ after ‘‘10.30’’; 

3 (B) in subparagraph (E)— 

4 (i) by striking ‘‘application and’’ and 

5 inserting ‘‘application or’’; 

6 (ii) by striking ‘‘If the Secretary’’ and 

7 inserting the following: 

8 ‘‘(i) IN GENERAL.—If the Secretary’’; 

9 (iii) by striking the second sentence 

10 and inserting the following: 

11 ‘‘(ii) PRIMARY PURPOSE OF DELAY12 ING.— 

13 ‘‘(I) IN GENERAL.—In deter14 mining whether a petition was sub15 mitted with the primary purpose of 

16 delaying an application, the Secretary 

17 may consider the following factors: 

18 ‘‘(aa) Whether the petition 

19 was submitted in accordance with 

20 paragraph (2)(B), based on when 

21 the petitioner knew or reasonably 

22 should have known the relevant 

23 information relied upon to form 

24 the basis of such petition. 


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1 ‘‘(bb) Whether the petitioner 

2 has submitted multiple or serial 

3 petitions or supplements to peti4 tions raising issues that reason5 ably could have been known to 

6 the petitioner at the time of sub7 mission of the earlier petition or 

8 petitions. 

9 ‘‘(cc) Whether the petition 

10 was submitted close in time to a 

11 known, first date upon which an 

12 application under subsection 

13 (b)(2) or (j) of this section or 

14 section 351(k) of the Public 

15 Health Service Act could be ap16 proved. 

17 ‘‘(dd) Whether the petition 

18 was submitted without relevant 

19 data or information in support of 

20 the scientific positions forming 

21 the basis of such petition. 

22 ‘‘(ee) Whether the petition 

23 raises the same or substantially 

24 similar issues as a prior petition 

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1 sponded substantively already, in2 cluding if the subsequent submis3 sion follows such response from 

4 the Secretary closely in time. 

5 ‘‘(ff) Whether the petition 

6 requests changing the applicable 

7 standards that other applicants 

8 are required to meet, including 

9 requesting testing, data, or label10 ing standards that are more on11 erous or rigorous than the stand12 ards the Secretary has deter13 mined to be applicable to the list14 ed drug, reference product, or pe15 titioner’s version of the same 

16 drug. 

17 ‘‘(gg) The petitioner’s record 

18 of submitting petitions to the 

19 Food and Drug Administration 

20 that have been determined by the 

21 Secretary to have been submitted 

22 with the primary purpose of 

23 delay. 

24 ‘‘(hh) Other relevant and 

25 appropriate factors, which the 


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1 Secretary shall describe in guid2 ance. 

3 ‘‘(II) GUIDANCE.—The Secretary 

4 may issue or update guidance, as ap5 propriate, to describe factors the Sec6 retary considers in accordance with 

7 subclause (I).’’; and 

8 (iv) by adding at the end the fol9 lowing: 

10 ‘‘(iii) REFERRAL TO THE FEDERAL

11 TRADE COMMISSION.—The Secretary shall 

12 establish procedures for referring to the 

13 Federal Trade Commission any petition or 

14 supplement to a petition that the Secretary 

15 determines was submitted with the primary 

16 purpose of delaying approval of an applica17 tion. Such procedures shall include notifi18 cation to the petitioner by the Secretary.’’; 

19 (C) by striking subparagraph (F); 

20 (D) by redesignating subparagraphs (G) 

21 through (I) as subparagraphs (F) through (H), 

22 respectively; and 

23 (E) in subparagraph (H), as so redesig24 nated, by striking ‘‘submission of this petition’’ 

25 and inserting ‘‘submission of this document’’; 


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1 (2) in paragraph (2)— 

2 (A) by redesignating subparagraphs (A) 

3 through (C) as subparagraphs (C) through (E), 

4 respectively; 

5 (B) by inserting before subparagraph (C), 

6 as so redesignated, the following: 

7 ‘‘(A) IN GENERAL.—A person shall submit 

8 a petition to the Secretary under paragraph (1) 

9 before filing a civil action in which the person 

10 seeks to set aside, delay, rescind, withdraw, or 

11 prevent submission, review, or approval of an 

12 application submitted under subsection (b)(2) 

13 or (j) of this section or section 351(k) of the 

14 Public Health Service Act. Such petition and 

15 any supplement to such a petition shall describe 

16 all information and arguments that form the 

17 basis of the relief requested in any civil action 

18 described in the previous sentence. 

19 ‘‘(B) TIMELY SUBMISSION OF CITIZEN PE20 TITION.—A petition and any supplement to a 

21 petition shall be submitted not later than 60 

22 days after the date on which the person first 

23 knew, or reasonably should have known, the in24 formation that forms the basis of the request 

25 made in the petition or supplement.’’; 


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1 (C) in subparagraph (C), as so redesig2 nated— 

3 (i) in the heading, by striking ‘‘WITH4 IN 150 DAYS’’; 

5 (ii) in clause (i), by striking ‘‘during 

6 the 150-day period referred to in para7 graph (1)(F),’’; and 

8 (iii) by amending clause (ii) to read as 

9 follows: 

10 ‘‘(ii) on or after the date that is 151 

11 days after the date of submission of the 

12 petition, the Secretary approves or has ap13 proved the application that is the subject 

14 of the petition without having made such a 

15 final decision.’’; 

16 (D) by amending subparagraph (D), as so 

17 redesignated, to read as follows: 

18 ‘‘(D) DISMISSAL OF CERTAIN CIVIL AC19 TIONS.— 

20 ‘‘(i) PETITION.—If a person files a 

21 civil action against the Secretary in which 

22 a person seeks to set aside, delay, rescind, 

23 withdraw, or prevent submission, review, or 

24 approval of an application submitted under 

25 subsection (b)(2) or (j) of this section or 


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1 section 351(k) of the Public Health Service 

2 Act without complying with the require3 ments of subparagraph (A), the court shall 

4 dismiss without prejudice the action for 

5 failure to exhaust administrative remedies. 

6 ‘‘(ii) TIMELINESS.—If a person files a 

7 civil action against the Secretary in which 

8 a person seeks to set aside, delay, rescind, 

9 withdraw, or prevent submission, review, or 

10 approval of an application submitted under 

11 subsection (b)(2) or (j) of this section or 

12 section 351(k) of the Public Health Service 

13 Act without complying with the require14 ments of subparagraph (B), the court shall 

15 dismiss with prejudice the action for fail16 ure to timely file a petition. 

17 ‘‘(iii) FINAL RESPONSE.—If a civil ac18 tion is filed against the Secretary with re19 spect to any issue raised in a petition time20 ly filed under paragraph (1) in which the 

21 petitioner requests that the Secretary take 

22 any form of action that could, if taken, set 

23 aside, delay, rescind, withdraw, or prevent 

24 submission, review, or approval of an appli25 cation submitted under subsection (b)(2) 


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1 or (j) of this section or section 351(k) of 

2 the Public Health Service Act before the 

3 Secretary has taken final agency action on 

4 the petition within the meaning of sub5 paragraph (C), the court shall dismiss 

6 without prejudice the action for failure to 

7 exhaust administrative remedies.’’; and 

8 (E) in clause (iii) of subparagraph (E), as 

9 so redesignated, by striking ‘‘as defined under 

10 subparagraph (2)(A)’’ and inserting ‘‘within the 

11 meaning of subparagraph (C)’’; and 

12 (3) in paragraph (4)— 

13 (A) by striking ‘‘EXCEPTIONS’’ and all that 

14 follows through ‘‘This subsection does’’ and in15 serting ‘‘EXCEPTIONS.—This subsection does’’; 

16 (B) by striking subparagraph (B); and 

17 (C) by redesignating clauses (i) and (ii) as 

18 subparagraphs (A) and (B), respectively, and 

19 adjusting the margins accordingly. 

20 SEC. 344. PREEMPTION OF STATE BARRIERS TO THE SUB21 STITUTION OF BIOSIMILAR PRODUCTS. 

22 No State, or any political subdivision thereof, may, 

23 under any circumstances, prohibit a pharmacy or phar24 macist from dispensing, in place of a biological reference 

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1 tration has designated as an interchangeable product for 

2 that biological reference product. 

3 SEC. 345. INCREASING PHARMACEUTICAL OPTIONS TO 

4 TREAT AN UNMET MEDICAL NEED. 

5 Subsection (b) of section 506 of the Federal Food, 

6 Drug, and Cosmetic Act (21 U.S.C. 356) is amended by 

7 adding at the end the following: 

8 ‘‘(4) UNMET MEDICAL NEED.—For purposes of 

9 paragraph (1), a drug to address an unmet medical 

10 need for a disease or condition shall be deemed to 

11 address such medical need if fewer than 3 available 

12 drugs exist for the treatment of such disease or con13 dition.’’. 

14 SEC. 346. CONDITIONAL APPROVAL OF NEW HUMAN DRUGS 

15 FOR INDIVIDUALS WITH RARE, PROGRES16 SIVE, AND SERIOUS DISEASES. 

17 (a) IN GENERAL.—Subchapter A of chapter V of the 

18 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 

19 et seq.), as amended by section 341, is further amended 

20 by adding at the end of the following: 

21 ‘‘SEC. 524D. CONDITIONAL APPROVAL OF HUMAN DRUGS 

22 FOR INDIVIDUALS WITH RARE, PROGRES23 SIVE, AND SERIOUS DISEASES. 

24 ‘‘(a) CONDITIONAL APPROVAL; PRIORITY REVIEW; 

25 OTHER DESIGNATIONS.— 


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1 ‘‘(1) IN GENERAL.—The sponsor of a drug may 

2 file with the Secretary an application for conditional 

3 approval of an eligible drug described in subsection 

4 (b). The Secretary shall approve or deny such appli5 cation in accordance with subsection (c). 

6 ‘‘(2) PRIORITY REVIEW.—The Secretary shall 

7 give priority review to an application for conditional 

8 approval of an eligible drug described in subsection 

9 (b). 

10 ‘‘(3) OTHER DESIGNATIONS.—If a drug that is 

11 granted conditional approval under this section is el12 igible for a special designation by the Secretary 

13 under this Act, including as a drug for a rare dis14 ease or condition under section 526, all applicable 

15 benefits of such other designation shall be available 

16 for use under such conditional approval, including 

17 any tax credits and waiving of fees under chapter 

18 VII. 

19 ‘‘(4) OTHER PROGRAMS.—A sponsor of a drug 

20 seeking conditional approval of such drug under this 

21 section may also seek designation, exclusivity, or ap22 proval, as applicable, of such drug under other appli23 cable provisions of this Act or the Public Health 

24 Service Act, subject to the requirements of such pro25 visions. 


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1 ‘‘(b) ELIGIBILITY.— 

2 ‘‘(1) IN GENERAL.—A drug may be eligible for 

3 conditional approval under this section if such drug 

4 is intended to treat a disease or condition that is— 

5 ‘‘(A) rapidly progressive, terminal, and has 

6 substantial unmet medical need, as determined 

7 by the Secretary; or 

8 ‘‘(B) a rare disease or condition (as de9 fined in section 526(a)(2)) that results in a 

10 substantially shortened lifespan, substantial re11 duction in quality of life, or other substantial 

12 adverse health effects, as determined by the 

13 Secretary. 

14 ‘‘(2) EXCLUSION FROM ELIGIBILITY.—A drug 

15 that is intended to treat or respond to a material 

16 threat identified by the Secretary of Homeland Secu17 rity under section 319F–2(c)(2)(A)(ii) of the Public 

18 Health Service Act shall not be eligible for condi19 tional approval under this section. 

20 ‘‘(c) STANDARD OF REVIEW FOR CONDITIONAL AP21 PROVAL.— 

22 ‘‘(1) REQUIREMENTS.—The Secretary shall 

23 only approve an application for conditional approval 

24 of a drug under this section if— 

25 ‘‘(A) the Secretary determines that— 


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1 ‘‘(i)(I) evidence of safety for the drug 

2 has been established by— 

3 ‘‘(aa) the completion of a phase 1 

4 clinical investigation of the drug (as 

5 described in section 312.21 of title 21, 

6 Code of Federal Regulations (or suc7 cessor regulations)); or 

8 ‘‘(bb) another demonstration of 

9 safety, as determined appropriate by 

10 the Secretary; and 

11 ‘‘(II) evidence of effectiveness in 

12 treating a given indication (which indica13 tion is congruent with the eligibility re14 quirements of subsection (b)), as estab15 lished by an ongoing or completed phase 2 

16 clinical investigation of the drug (as de17 scribed in section 312.21 of title 21, Code 

18 of Federal Regulations (or successor regu19 lations)); or 

20 ‘‘(ii) in the case of a drug that is in21 tended to treat a terminal pediatric rare 

22 disease or condition (as defined in section 

23 526(a)(2)) that does not predominately af24 fect adults— 


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1 ‘‘(I) evidence of safety for the 

2 drug has been established in accord3 ance with clause (i)(I); and 

4 ‘‘(II) the drug shows preliminary 

5 evidence of clinical effectiveness based 

6 upon studies in animal models; and 

7 ‘‘(B) the sponsor has provided a written 

8 affirmation of the sponsor’s intent to pursue 

9 under section 505 of this Act or section 351 of 

10 the Public Health Service Act approval of the 

11 drug, which affirmation shall include a justifica12 tion and a plan for pursuing such approval. 

13 ‘‘(2) ROLLING, REAL-TIME REVIEW.— 

14 ‘‘(A) IN GENERAL.—If the Secretary deter15 mines, after preliminary evaluation of data sub16 mitted by the sponsor, that a drug may meet 

17 the standard for conditional approval, the spon18 sor may submit portions of an application for 

19 conditional approval of a drug under this sec20 tion for evaluation by the Secretary before the 

21 sponsor submits a complete application, which 

22 submission shall include— 

23 ‘‘(i) a schedule for submission of in24 formation necessary to make the applica25 tion complete; and 


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1 ‘‘(ii) a payment of any fee that may 

2 be required under section 736. 

3 ‘‘(B) REVIEW.—The Secretary— 

4 ‘‘(i) shall evaluate each application 

5 submitted under subparagraph (A) to as6 sess whether such application is complete 

7 or ready to be filed; and 

8 ‘‘(ii) may commence review of portions 

9 of such application for approval. 

10 ‘‘(3) USE OF REAL-WORLD EVIDENCE.— 

11 ‘‘(A) IN GENERAL.—The Secretary shall 

12 allow the use of real-world evidence (as defined 

13 in section 505F(b)), including real-world data 

14 used to generate real-world evidence, and of ex15 ternal sources of data, including prospective or 

16 retrospective natural history data, to support an 

17 application for conditional approval under this 

18 section. 

19 ‘‘(B) DATA INTEGRITY REQUIREMENTS.— 

20 In using evidence described in subparagraph 

21 (A) to support an application for conditional 

22 approval under this section, the sponsor shall 

23 consider the guidance of the Food and Drug 

24 Administration entitled ‘Data Standards for 

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1 taining Real-World Data’ and dated December 

2 2023 (or successor guidance). 

3 ‘‘(d) FDA AUTHORITY TO WITHDRAW CONDITIONAL

4 APPROVAL.— 

5 ‘‘(1) IN GENERAL.—The Secretary may with6 draw the conditional approval of a drug under this 

7 section if— 

8 ‘‘(A) after adequate review of appropriate 

9 safety data, including data from an observa10 tional registry established under subsection (g), 

11 the Secretary determines that such data no 

12 longer supports conditional approval; 

13 ‘‘(B) the Secretary determines that the ap14 plication for conditional approval submitted 

15 under subsection (a)(1) contained an untrue 

16 statement of material fact; or 

17 ‘‘(C) the Secretary determines that the 

18 drug is no longer eligible under subsection (b). 

19 ‘‘(2) FDA EXAMINATION AUTHORITY.— 

20 ‘‘(A) IN GENERAL.—For purposes of deter21 mining whether to withdraw the conditional ap22 proval of a drug under paragraph (1), the Sec23 retary may— 

24 ‘‘(i) review any available clinical data 

25 made available through clinical trials or an 


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1 observational registry under subsection (g), 

2 applicable to such drug; and 

3 ‘‘(ii) determine whether the sponsor of 

4 such drug is in violation of a requirement 

5 established under paragraph (3) or (4) of 

6 section 505(o) or section 505–1 with re7 spect to the drug. 

8 ‘‘(B) TRANSPARENCY.— 

9 ‘‘(i) IN GENERAL.—The Secretary 

10 may require drug sponsors and observa11 tional registries under subsection (g) to 

12 submit the data described in subparagraph 

13 (A) for the purposes of the review under 

14 that subparagraph. 

15 ‘‘(ii) FINES.—The Secretary may levy 

16 fines on sponsors and observational reg17 istries that do not comply with a request 

18 for data under clause (i) within such rea19 sonable timeframe as is established by the 

20 Secretary. 

21 ‘‘(3) EFFECT OF WITHDRAWAL.— 

22 ‘‘(A) AVAILABILITY TO NEW PATIENTS.— 

23 ‘‘(i) IN GENERAL.—If a conditional 

24 approval is withdrawn under this sub25 section, the sponsor may not make the 


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1 drug available to any new patients, but 

2 may continue to make such drug available 

3 to patients who started taking the drug 

4 prior to the date of withdrawal. 

5 ‘‘(ii) EFFECT.—Nothing in this sub6 paragraph shall be construed to require— 

7 ‘‘(I) a patient to continue taking 

8 a conditionally approved drug if such 

9 patient decides to stop taking such 

10 drug; or 

11 ‘‘(II) the sponsor to ensure such 

12 drug continues to be manufactured 

13 after the date of withdrawal. 

14 ‘‘(B) CIVIL MONETARY PENALTY.—Any 

15 sponsor who makes available to new patients a 

16 drug for which conditional approval has been 

17 withdrawn under this subsection shall be sub18 ject to such civil monetary penalty as is deter19 mined by the Secretary. 

20 ‘‘(4) WITHDRAWAL NOTICE.—Upon deter21 mining to withdraw the conditional approval of a 

22 drug under paragraph (1), the Secretary shall sub23 mit written notice to the sponsor of such drug and 

24 such withdrawal shall be effective on the date that 


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1 is 14 days after the date of such submission of no2 tice. 

3 ‘‘(5) APPEALS.—Not later than 180 days after 

4 the date of enactment of this section, the Secretary, 

5 by rule, shall establish a process by which a sponsor 

6 of a drug for which conditional approval was with7 drawn under paragraph (1) may appeal such with8 drawal. 

9 ‘‘(6) AUTOMATIC WITHDRAWAL.— 

10 ‘‘(A) IN GENERAL.—If the sponsor of a 

11 drug that receives conditional approval under 

12 this section does not submit an application for 

13 renewal of such conditional approval under sub14 section (f)(2) by the deadline under that sub15 section, such conditional approval shall auto16 matically be withdrawn in accordance with 

17 paragraph (3) on the date on which such condi18 tional approval expires. 

19 ‘‘(B) MARKETING REQUIREMENT.—If any 

20 drug that receives conditional approval under 

21 this section is not brought to market within 1 

22 year of the date on which the conditional ap23 proval is granted, such conditional approval, 

24 along with any benefits described in subsection 


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1 (a)(3), shall automatically be withdrawn in ac2 cordance with paragraph (3) on such date. 

3 ‘‘(C) NO RIGHT TO APPEAL; EFFECT OF

4 AUTOMATIC WITHDRAWAL.— 

5 ‘‘(i) IN GENERAL.—A sponsor shall 

6 not have the right to appeal an automatic 

7 withdrawal under this paragraph. 

8 ‘‘(ii) EFFECT.—The Secretary shall 

9 have no means or power to prevent an 

10 automatic withdrawal under this para11 graph from occurring. 

12 ‘‘(e) LABELING; REVIEW OF MATERIALS.— 

13 ‘‘(1) IN GENERAL.—Sponsors may not make 

14 available to patients a drug conditionally approved 

15 under this section, unless— 

16 ‘‘(A) all labeling and advertising of such 

17 drug contains the statement ‘conditionally ap18 proved for a limited population’ in a prominent 

19 manner and adjacent to, and not more promi20 nent than— 

21 ‘‘(i) the proprietary name of such 

22 drug, if any; or 

23 ‘‘(ii) if there is no proprietary name, 

24 the established name of such drug, if any, 

25 as defined in section 502(e)(3), or, in the 


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1 case of a drug that is a biological product, 

2 the proper name, as defined by regulation; 

3 and 

4 ‘‘(B) the prescribing information for the 

5 drug required by section 201.57 of title 21, 

6 Code of Federal Regulations (or any successor 

7 regulation) includes the following statement: 

8 ‘This drug is conditionally approved for use in 

9 a limited and specific population. This drug has 

10 not received full approval by the Food and 

11 Drug Administration. Conditional approval of 

12 this drug may be withdrawn at short notice.’. 

13 ‘‘(2) SUBMISSION.—Not later than 45 days be14 fore such materials are distributed, all promotional, 

15 educational, and marketing materials for such drug 

16 shall be submitted to the Secretary for review. 

17 ‘‘(3) PUBLIC LIST.—The Secretary shall main18 tain a list of all drugs conditionally approved under 

19 this section on a publicly accessible website. Such 

20 website shall briefly describe what each conditionally 

21 approved drug is and list the 1 or more diseases or 

22 conditions for which the drug is indicated. 

23 ‘‘(f) RENEWAL OF CONDITIONAL APPROVAL; RE24 QUIREMENT TO BRING DRUG TO MARKET.— 


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1 ‘‘(1) DURATION; RENEWALS.—The conditional 

2 approval for a drug under this section is effective for 

3 a 2-year period. The sponsor may request renewal of 

4 such conditional approval for up to 3 subsequent 2- 

5 year periods. Conditional approval with respect to a 

6 drug shall not exceed a total of 8 years from the ini7 tial date the drug was granted conditional approval. 

8 ‘‘(2) APPLICATIONS FOR RENEWAL OF CONDI9 TIONAL APPROVAL.— 

10 ‘‘(A) IN GENERAL.—Except as provided in 

11 subparagraph (C), the sponsor of a drug seek12 ing a renewal of conditional approval for such 

13 drug under this subsection shall submit to the 

14 Secretary, not later than 180 days before the 

15 date on which such conditional approval expires, 

16 an application that contains the applicable in17 formation described in paragraph (3) in a 

18 standardized format determined by the Sec19 retary. 

20 ‘‘(B) PROCESS FOR GRANTING RENEW21 ALS.—Not later than 180 days after the date of 

22 enactment of this section, the Secretary, by 

23 rule, shall establish the process for granting a 

24 renewal under this subsection. 


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1 ‘‘(C) EXEMPTION FOR SMALL POPULATION

2 DISEASES.— 

3 ‘‘(i) IN GENERAL.—The Secretary 

4 shall exempt from the requirements of sub5 paragraph (A) and paragraph (3) an appli6 cation for a renewal of conditional approval 

7 for a drug under this subsection if the Sec8 retary determines that the population af9 fected by the disease or condition that the 

10 drug is intended to treat does not support 

11 additional preliminary evidence of effective12 ness (as defined in paragraph (3)(D)). 

13 ‘‘(ii) APPLICATION FOR EXEMP14 TION.—Sponsors may submit an applica15 tion for exemption under this subpara16 graph not later than 180 days before the 

17 date on which the conditional approval ex18 pires. 

19 ‘‘(iii) APPLICATION PROCESS.—Not 

20 later than 180 days after the date of en21 actment of this section, the Secretary shall 

22 establish a standardized application proc23 ess for purposes of this subparagraph. 

24 ‘‘(iv) DEADLINE.—The Secretary shall 

25 approve or deny an application under this 


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1 subparagraph before the date on which the 

2 conditional approval expires. 

3 ‘‘(v) APPEALS.—Not later than 180 

4 days after the date of enactment of this 

5 section, the Secretary shall establish a 

6 process under which a sponsor my appeal 

7 a denial of an application under this sub8 paragraph. 

9 ‘‘(3) ADDITIONAL PRELIMINARY EVIDENCE OF

10 EFFECTIVENESS.—The information described in this 

11 paragraph is the following: 

12 ‘‘(A) FOR THE FIRST APPROVAL RE13 NEWAL.—With respect to an application under 

14 paragraph (2) for the first renewal of condi15 tional approval for a drug under this sub16 section, additional preliminary evidence of effec17 tiveness of the drug, as compared to the evi18 dence provided in the initial application for con19 ditional approval for the drug under subsection 

20 (c). 

21 ‘‘(B) FOR THE SECOND APPROVAL RE22 NEWAL.—With respect to an application under 

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1 tiveness of the drug, as compared to the evi2 dence provided in the renewal application de3 scribed in subparagraph (A). 

4 ‘‘(C) FOR THE FINAL APPROVAL RE5 NEWAL.—With respect to an application under 

6 paragraph (2) for the third renewal of condi7 tional approval for a drug under this sub8 section, a written affirmation from the head of 

9 the drug’s review division of the Office of New 

10 Drugs or the Office of Therapeutic Products 

11 asserting that a third renewal is necessary— 

12 ‘‘(i) for patients who have benefitted 

13 from such drug to retain access to such 

14 drug; and 

15 ‘‘(ii) to generate additional prelimi16 nary evidence of effectiveness for the pur17 poses of attaining approval under section 

18 505 of this Act or section 351 of the Pub19 lic Health Service Act. 

20 ‘‘(D) DEFINITION.—In this paragraph, the 

21 term ‘preliminary evidence of effectiveness’ 

22 means— 

23 ‘‘(i) clinical evidence generated by an 

24 ongoing or completed clinical trial con25 ducted in accordance with section 11.22 of 


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1 title 42, Code of Federal Regulations (or 

2 successor regulations); 

3 ‘‘(ii) real-world evidence (as defined in 

4 section 505F(b)); or 

5 ‘‘(iii) evidence from an observational 

6 registry under subsection (g). 

7 ‘‘(4) DENIAL OF RENEWAL ON THE BASIS OF

8 DATA FRAUD.—The Secretary may deny the applica9 tion for renewal of conditional approval for a drug 

10 under this subsection if the Secretary, in conducting 

11 a review under subsection (d)(2), finds that the evi12 dence provided in such application under subpara13 graph (A) or (B) of paragraph (3) was fraudulently 

14 manipulated by the applicable observational registry 

15 and that such application substantially relies on 

16 such data. 

17 ‘‘(g) OBSERVATIONAL REGISTRIES.— 

18 ‘‘(1) ESTABLISHMENT.— 

19 ‘‘(A) IN GENERAL.—Subject to subpara20 graph (C), the sponsor of a drug conditionally 

21 approved under this section shall establish an 

22 observational registry, for patients who are or 

23 will be treated with such drug, that pertains to 

24 the disease or condition that the drug is in25 tended to treat. 


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1 ‘‘(B) REGISTRIES.—In establishing an ob2 servational registry for a drug under subpara3 graph (A), the sponsor may— 

4 ‘‘(i) establish a new observational reg5 istry; 

6 ‘‘(ii) use an existing observational reg7 istry that pertains to the disease or condi8 tion such drug is intended to treat; 

9 ‘‘(iii) combine 1 or more existing ob10 servational registries that pertain to the 

11 disease or condition such drug is intended 

12 to treat with a new observational registry; 

13 or 

14 ‘‘(iv) combine 2 or more existing ob15 servational registries that pertain to the 

16 disease or condition such drug is intended 

17 to treat. 

18 ‘‘(C) APPROVAL OF REGISTRY AND RIGHT

19 TO APPEAL.—Not later than 180 days after the 

20 date of enactment of this section, the Secretary 

21 shall establish— 

22 ‘‘(i) a process to approve or deny the 

23 establishment of an observational registry 

24 under subparagraph (A); and 


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1 ‘‘(ii) a process for sponsors that re2 ceived such a denial to appeal the denial. 

3 ‘‘(2) REQUIREMENT FOR PATIENTS TO ENROLL

4 IN OBSERVATIONAL REGISTRY.— 

5 ‘‘(A) IN GENERAL.—A drug conditionally 

6 approved under this section shall not be made 

7 available to a patient unless such patient is en8 rolled in the applicable observational registry 

9 described in paragraph (1). 

10 ‘‘(B) INFORMED CONSENT.— 

11 ‘‘(i) IN GENERAL.—Prior to enrolling 

12 in an observational registry under subpara13 graph (A), a patient shall provide informed 

14 consent in accordance with clause (ii). 

15 ‘‘(ii) APPLICATION OF CERTAIN RE16 QUIREMENTS.—The requirements for in17 formed consent under part 50 of sub18 chapter A of chapter I of title 21, Code of 

19 Federal Regulations (or successor regula20 tions), shall apply to enrollment an obser21 vational registry under this paragraph. 

22 ‘‘(3) SUBMISSION OF PATIENT DATA.— 

23 ‘‘(A) IN GENERAL.—The sponsor of a drug 

24 conditionally approved under this section shall 

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1 tient data to the applicable observational reg2 istry described in paragraph (1). 

3 ‘‘(B) SUBMISSION STANDARDS.—Not later 

4 than 180 days after the date of enactment of 

5 this section, the Secretary shall establish data 

6 submission standards for sponsors to comply 

7 with for purposes of subparagraph (A) to en8 sure that registry data is consistent and clini9 cally informed. 

10 ‘‘(4) REQUIREMENTS FOR REGISTRIES.—An ob11 servational registry described in paragraph (1) for a 

12 drug conditionally approved under this section may 

13 be operated by the sponsor of such drug or, at the 

14 sponsor’s discretion, a third party, for-profit organi15 zation, or nonprofit organization. 

16 ‘‘(5) RISK AND BENEFIT DATA.— 

17 ‘‘(A) IN GENERAL.—The sponsor of a drug 

18 conditionally approved under this section shall 

19 submit relevant risk and benefit data to the ap20 plicable observational registry described in 

21 paragraph (1). 

22 ‘‘(B) ONLINE PORTAL.—The Secretary 

23 shall operate an online portal on an existing 

24 website of the Secretary for sponsors to submit 

25 data described in subparagraph (A). 


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1 ‘‘(6) ACCESSIBILITY.— 

2 ‘‘(A) IN GENERAL.—An observational reg3 istry described in paragraph (1) shall— 

4 ‘‘(i) not later than 30 days after re5 ceipt of a request, provide patients (or 

6 their designated representatives) with ac7 cess to such patient’s personal registry in8 formation; and 

9 ‘‘(ii) provide approved researchers and 

10 medical professionals access to de-identi11 fied and aggregated data from the registry 

12 for the purposes of indication- and disease13 specific and translational research into 

14 conditions and diseases relating to the dis15 ease or condition that the drug tracked by 

16 the observational registry is intended to 

17 treat. 

18 ‘‘(B) APPROVED RESEARCHERS AND MED19 ICAL PROFESSIONALS.—Not later than 180 

20 days after the date of enactment of this section, 

21 the Secretary, by rule, shall establish a process 

22 for approving researchers and medical profes23 sionals for purposes of subparagraph (A)(ii). 

24 ‘‘(7) EFFECT.—Nothing in this section shall be 

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1 ity to require for a drug conditionally approved 

2 under this section any type of postapproval study 

3 under any other provision of law, including sections 

4 505(o)(3), 505B, and 506. 

5 ‘‘(h) PURSUIT OF A DIFFERENT INDICATION.— 

6 ‘‘(1) IN GENERAL.—In the case of a drug con7 ditionally approved under this section for which such 

8 approval was withdrawn under subsection (d), ex9 pired under subsection (f)(1), or was denied for re10 newal under subsection (f)(4), not later than 2 years 

11 after the date of withdrawal, expiration, or denial, as 

12 applicable, the sponsor of such drug shall have the 

13 opportunity to petition the Secretary to receive con14 ditional approval of such drug, in accordance with 

15 this section, for a different indication. 

16 ‘‘(2) PROCESS.—Not later than 180 days after 

17 the date of enactment of this section, the Secretary 

18 shall establish a process for petitions under para19 graph (1). 

20 ‘‘(i) TRANSITION TO OTHER FORMS OF APPROVAL.— 

21 ‘‘(1) IN GENERAL.—A drug that receives condi22 tional approval under this section may be granted 

23 approval under section 505 of this Act or section 

24 351 of the Public Health Service Act during the pe25 riod in which such conditional approval is in effect. 


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1 Effective on the date on which approval for such 

2 drug is granted under section 505 of this Act or sec3 tion 351 of the Public Health Service Act, such con4 ditional approval shall be automatically withdrawn in 

5 accordance with subsection (d)(3). 

6 ‘‘(2) CONSIDERATION OF CERTAIN EVI7 DENCE.—In determining whether to approve under 

8 section 505 of this Act or section 351 of the Public 

9 Health Service Act a drug that has received condi10 tional approval under this section, the Secretary may 

11 consider evidence from the observational registry for 

12 the drug under subsection (g). 

13 ‘‘(j) INFORMED CONSENT.— 

14 ‘‘(1) IN GENERAL.—Prior to being prescribed a 

15 drug conditionally approved under this section, a pa16 tient shall provide informed consent in accordance 

17 with paragraph (2). 

18 ‘‘(2) APPLICATION OF CERTAIN REQUIRE19 MENTS.—The requirements for informed consent 

20 under part 50 of subchapter A of chapter I of title 

21 21, Code of Federal Regulations (or successor regu22 lations), shall apply to drugs conditionally approved 

23 under this section. 

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1 ance with subsection (g) may obtain, and maintain 

2 records of, informed consent of a patient on behalf 

3 of the drug sponsor, in accordance with paragraph 

4 (2). 

5 ‘‘(4) COMMON RULE.—Drugs conditionally ap6 proved under this section shall comply with subpart 

7 A of part 46 of title 45, Code of Federal Regulations 

8 (commonly known as the ‘Common Rule’) (or suc9 cessor regulations), if applicable. 

10 ‘‘(k) LIMITATION ON LIABILITY.—With respect to 

11 any claim under State law relating to a drug made avail12 able pursuant to a grant of conditional approval under this 

13 section, no liability shall lie against a sponsor or manufac14 turer of the drug, or any health care provider who pre15 scribes or administers the drug, absent intentional wrong16 doing. 

17 ‘‘(l) REPORT TO CONGRESS.— 

18 ‘‘(1) IN GENERAL.—Not later than 2 years 

19 after the date of enactment of this section, and once 

20 every 2 years thereafter, the Secretary, in collabora21 tion with drug sponsors, shall submit a report to 

22 Congress on all drugs granted conditional approval 

23 under this section. Such report shall include— 

24 ‘‘(A) an estimated number of patients 

25 treated with each such drug, and the number of 


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1 patients tracked in an observational registry 

2 under subsection (g) with respect to each such 

3 drug, if applicable; 

4 ‘‘(B) a discussion, at an aggregate level, of 

5 the types and amounts of data obtained 

6 through observational registries under sub7 section (g), such as patient treatments and 

8 uses, length of use, side effects encountered, 

9 relevant biomarkers, scan results, cause of 

10 death and how long the patient lived, and ad11 verse drug effects; 

12 ‘‘(C) a list of all such drugs for which an 

13 application for approval under this section, or 

14 an application for an extension of conditional 

15 approval under this section, has been sub16 mitted; and 

17 ‘‘(D) the number of all applications grant18 ed and denied conditional approval under this 

19 section. 

20 ‘‘(2) SPONSOR PARTICIPATION.—Not later than 

21 180 days before the date on which the Secretary 

22 submits a report under paragraph (1), the sponsor 

23 of a drug conditionally approved under this section 

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1 scribed in subparagraphs (A) and (B) of paragraph 

2 (1), as applicable. 

3 ‘‘(3) NOTICE AUTHORITY.—The Secretary may 

4 notify sponsors of drugs conditionally approved 

5 under this section and observational registries under 

6 subsection (g) as necessary to complete a report 

7 under paragraph (1).’’. 

8 (b) CONFORMING AMENDMENT.—Section 505(a) of 

9 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

10 355(a)) is amended by inserting ‘‘, or there is in effect 

11 a conditional approval under section 524C with respect to 

12 such drug’’ before the period. 

13 (c) REIMBURSEMENT.— 

14 (1) PRIVATE HEALTH INSURERS.—Section 

15 2719A of the Public Health Service Act (42 U.S.C. 

16 300gg–19a) is amended by adding at the end the 

17 following: 

18 ‘‘(f) COVERAGE OF CERTAIN DRUGS.—A group 

19 health plan or health insurance issuer offering group or 

20 individual health insurance coverage shall provide coverage 

21 for, and shall not impose any cost sharing requirements 

22 for, drugs conditionally approved under section 524D of 

23 the Federal Food, Drug, and Cosmetic Act for patients 

24 who have the disease or condition the drug is intended 

25 to treat.’’. 


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1 (2) FEDERAL HEALTH CARE PROGRAMS.—The 

2 requirement under subsection (f) of section 2719A 

3 of the Public Health Service Act (as added by para4 graph (1)) shall apply with respect to coverage de5 terminations under a Federal health care program 

6 (as defined in section 1128B(f) of the Social Secu7 rity Act (42 U.S.C. 1320a–7b(f))) in the same man8 ner such requirement applies under such subsection 

9 (f). 

10 (3) CONFORMING AMENDMENT.—Section 

11 1927(k)(2)(A)(i) of the Social Security Act (42 

12 U.S.C. 1396r–8(k)(2)(A)(i)) is amended— 

13 (A) by striking ‘‘or which’’ and inserting ‘‘, 

14 which’’; and 

15 (B) by inserting ‘‘, or which is condi16 tionally approved under section 524D of such 

17 Act’’ before the semicolon. 

18 SEC. 347. CONSOLIDATING EXCLUSIVITY PERIODS FOR 

19 DRUGS TREATING RARE DISEASES AND CON20 DITIONS. 

21 (a) IN GENERAL.—Section 527(a) of the Federal 

22 Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)) is 

23 amended to read as follows: 

24 ‘‘(a) EXCLUSIVITY.— 


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1 ‘‘(1) IN GENERAL.—Except as provided in sub2 section (b), if the Secretary approves an application 

3 filed pursuant to section 505, or issues a license 

4 under section 351 of the Public Health Service Act, 

5 for a drug designated under section 526 for a rare 

6 disease or condition, the Secretary may not approve 

7 an application filed pursuant to section 505, or issue 

8 a license under section 351 of the Public Health 

9 Service Act, for the same drug for the same disease 

10 or condition for a person who is not the holder of 

11 such approved application or of such license until 

12 the expiration of the exclusivity period described in 

13 paragraph (2). 

14 ‘‘(2) EXCLUSIVITY PERIOD DESCRIBED.—The 

15 exclusivity period described in this paragraph, with 

16 respect to a drug designated under section 526 for 

17 a rare disease or condition, is— 

18 ‘‘(A) a single 7-year period of exclusivity 

19 with respect to the first designation of such 

20 drug under such section for that rare disease or 

21 condition; or 

22 ‘‘(B) in the case of a drug that has pre23 viously received a period of exclusivity under 

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1 tion of such drug under such section for any 

2 other rare disease or condition. 

3 ‘‘(3) LIMITATION.—In the case of a drug that 

4 has received two periods of exclusivity pursuant to 

5 paragraph (1), no additional exclusivity period under 

6 this section is available with respect to such drug, 

7 regardless of whether such drug has been designated 

8 under section 526 for a rare disease or condition 

9 that is distinct from the rare disease or condition for 

10 which such exclusivity periods were granted.’’. 

11 (b) CONFORMING AMENDMENTS.— 

12 (1) Section 505(j)(5)(B)(iv)(II)(dd)(AA) of the 

13 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

14 360cc) is amended by striking ‘‘7-year period’’ and 

15 inserting ‘‘period’’. 

16 (2) Section 505A(b)(1)(A)(ii) of the Federal 

17 Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is 

18 amended by striking ‘‘rather than seven years;’’ and 

19 inserting ‘‘, or three years and six months, rather 

20 than seven years or three years, respectively;’’. 

21 (3) Section 505A(c)(1)(A)(ii) of the Federal 

22 Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is 

23 amended by striking ‘‘rather than seven years;’’ and 

24 inserting ‘‘, or three years and six months, rather 

25 than seven years or three years, respectively;’’. 


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1 (4) Section 505E(a) of the Federal Food, Drug, 

2 and Cosmetic Act (21 U.S.C. 360cc) is amended by 

3 striking ‘‘7-year period’’ and inserting ‘‘exclusivity 

4 periods’’. 

5 (5) Section 527(b) of the Federal Food, Drug, 

6 and Cosmetic Act (21 U.S.C. 360cc) is amended by 

7 striking ‘‘the 7-year period’’ and inserting ‘‘any ex8 clusivity period’’. 

9 (6) Section 351(m)(2)(B) of the Public Health 

10 Service Act (42 U.S.C. 262) is amended by striking 

11 ‘‘rather than 7 years’’ and inserting ‘‘or 3 years and 

12 6 months, rather than 7 years or 3 years, respec13 tively’’. 

14 (7) Section 351(m)(3)(B) of the Public Health 

15 Service Act (42 U.S.C. 262) is amended by striking 

16 ‘‘rather than 7 years’’ and inserting ‘‘or 3 years and 

17 6 months, rather than 7 years or 3 years, respec18 tively’’. 

19 SEC. 348. EXCLUSIVITY PERIOD FOR BRAND NAME BIO20 LOGICAL PRODUCTS. 

21 (a) IN GENERAL.—Section 351(k)(7)(A) of the Pub22 lic Health Service Act (42 U.S.C. 262(k)(7)(A)) is amend23 ed by striking ‘‘12 years’’ and inserting ‘‘5 years’’. 

24 (b) CONFORMING CHANGES.—Paragraphs (2)(A) and 

25 (3)(A) of section 351(m) of the Public Health Service Act 


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1 (42 U.S.C. 262(m)) is amended by striking ‘‘12 years’’ 

2 each place it appears and inserting ‘‘5 years’’. 

3 (c) APPLICABILITY.—This section and the amend4 ments made by this section apply only with respect to a 

5 biological product for which the reference product (as such 

6 term is used in section 351 of the Public Health Service 

7 Act (42 U.S.C. 262)) is licensed under subsection (a) of 

8 such section on or after the date of enactment of this Act. 

9 SEC. 349. REGULATION OF MANUFACTURER-SPONSORED 

10 CO-PAY CONTRIBUTIONS. 

11 Notwithstanding any other provision of law, the Sec12 retary of Health and Human Services may establish a 

13 mechanism to regulate drug manufacturers’ financial con14 tributions to patient out-of-pocket costs, such as drug co15 pays. 

16 SEC. 350. ANTITRUST EXEMPTION FOR PRIVATE HEALTH 

17 INSURANCE ISSUERS TO NEGOTIATE WHOLE18 SALE ACQUISITION PRICES OF PRESCRIP19 TION DRUGS PURCHASED FROM DRUG MANU20 FACTURERS. 

21 (a) EXEMPTION.—It shall not be a violation of the 

22 antitrust laws for one or more private health insurance 

23 issuers or their designated agents to jointly negotiate 

24 wholesale acquisition prices of a prescription drug with a 

25 manufacturer of a prescription drug with regards to the 


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1 reimbursement policies of the insurers of the manufactur2 er’s drugs so long as no one single wholesale acquisition 

3 price is jointly determined between the insurance issuers 

4 or their designated agents. 

5 (b) DEFINITIONS.—For purposes of this section: 

6 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

7 laws’’ has the meaning given such term in subsection 

8 (a) of the 1st section of the Clayton Act (15 U.S.C. 

9 12(a)), except that such term includes section 5 of 

10 the Federal Trade Commission Act (15 U.S.C. 45) 

11 to the extent such section 5 applies to unfair meth12 ods of competition. 

13 (2) HEALTH INSURANCE ISSUER.—The term 

14 ‘‘health insurance issuer’’ means an insurance com15 pany, insurance service, or insurance organization 

16 (including a health maintenance organization) which 

17 is licensed to engage in the business of insurance in 

18 a State and which is subject to State law which reg19 ulates insurance (within the meaning of section 

20 514(b)(2) of the Employee Retirement Income Secu21 rity Act of 1974 (29 U.S.C. 1144(b)(2))). Such term 

22 does not include a group health plan. 

23 (3) HEALTH MAINTENANCE ORGANIZATION.— 

24 The term ‘‘health maintenance organization’’ 

25 means— 


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1 (A) a health maintenance organization (as 

2 defined in section 1301(a) of the Public Health 

3 Service Act (42 U.S.C. 300e(a)); 

4 (B) an organization recognized under State 

5 law as a health maintenance organization; or 

6 (C) a similar organization regulated under 

7 State law for solvency in the same manner and 

8 to the same extent as such a health mainte9 nance organization. 

10 (4) MANUFACTURER.—The term ‘‘manufac11 turer’’ means any person who is engaged in manu12 facturing, preparing, propagating, compounding, 

13 processing, packaging, repackaging, or labeling of a 

14 prescription drug. 

15 (5) PRESCRIPTION DRUG.—The term ‘‘prescrip16 tion drug’’ means any human drug required by Fed17 eral law or regulation to be dispensed only by a pre18 scription, including finished dosage forms and active 

19 ingredients subject to section 503(b) of the Federal 

20 Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)). 

21 (c) EFFECTIVE DATE.—This section shall not apply 

22 with respect to any conduct that occurs before the date 

23 of enactment of this Act. 


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1 SEC. 351. BIOLOGICAL PRODUCT INNOVATION. 

2 Section 351(j) of the Public Health Service Act (42 

3 U.S.C. 262(j)) is amended— 

4 (1) by striking ‘‘except that a product’’ and in5 serting ‘‘except that— 

6 ‘‘(1) a product’’; 

7 (2) by striking ‘‘Act.’’ and inserting ‘‘Act; and’’; 

8 and 

9 (3) by adding at the end the following: 

10 ‘‘(2) no requirement under such Act regarding 

11 an official compendium (as defined in section 201(j) 

12 of such Act), or other reference in such Act to an 

13 official compendium (as so defined), shall apply with 

14 respect to a biological product subject to regulation 

15 under this section.’’. 

16 SEC. 352. BIOSIMILAR BIOLOGICAL PRODUCTS. 

17 (a) IN GENERAL.—Section 351(k) of the Public 

18 Health Service Act (42 U.S.C. 262(k)) is amended— 

19 (1) in the subsection heading, by striking ‘‘OR

20 INTERCHANGEABLE’’; 

21 (2) in paragraph (2)— 

22 (A) by striking subparagraph (B); 

23 (B) by redesignating clauses (ii) and (iii) 

24 of subparagraph (A) as subparagraphs (B) and 

25 (C), respectively, and adjusting the margins ac26 cordingly; 


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1 (C) in subparagraph (A)— 

2 (i) in clause (i), by redesignating sub3 clauses (I) through (V) as clauses (i) 

4 through (v), respectively, and adjusting the 

5 margins accordingly; 

6 (ii) in clause (i), as so redesignated by 

7 clause (i) of this subparagraph, by redesig8 nating items (aa) through (cc) as sub9 clauses (I) through (III), respectively, and 

10 adjusting the margins accordingly; and 

11 (iii) by striking ‘‘(A) IN GENERAL’’ 

12 and all that follows through ‘‘An applica13 tion submitted under this subsection shall 

14 include information’’ and inserting the fol15 lowing: 

16 ‘‘(A) IN GENERAL.—An application sub17 mitted under this subsection shall include infor18 mation’’; 

19 (D) in subparagraph (B), as so redesig20 nated by subparagraph (B) of this paragraph, 

21 by striking ‘‘clause (i)(I)’’ and inserting ‘‘sub22 paragraph (A)(i)’’; and 

23 (E) in subparagraph (C), as so redesig24 nated by subparagraph (B) of this paragraph, 

25 by redesignating subclauses (I) through (III) as 


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1 clauses (i) through (iii), respectively, and by ad2 justing the margins accordingly; 

3 (3) by amending paragraph (4) to read as fol4 lows: 

5 ‘‘(4) INTERCHANGEABILITY.— 

6 ‘‘(A) IN GENERAL.—A biological product 

7 licensed under this subsection shall be deemed 

8 to be interchangeable with the reference prod9 uct. 

10 ‘‘(B) CONGRESSIONAL BRIEFING PRIOR TO

11 CERTAIN STUDY REQUIREMENTS.—The Sec12 retary may require the sponsor of an applica13 tion submitted under this section to conduct a 

14 study to evaluate the risk, in terms of safety, 

15 purity, or potency, of alternating or switching 

16 between the use of the biological product that 

17 is the subject of the application and the ref18 erence product, if, before requiring such a 

19 study, the Secretary first holds a private brief20 ing with the chair and ranking member of the 

21 Committee on Health, Education, Labor, and 

22 Pensions of the Senate and the chair and the 

23 ranking member of the Committee on Energy 

24 and Commerce of the House of Representatives, 

25 to explain why such a study is necessary for the 


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1 biological product, what information the Sec2 retary expects such a study to reveal, what al3 ternatives to such study have been considered, 

4 and why those alternatives are not sufficient.’’; 

5 (4) by striking paragraph (6); 

6 (5) in paragraph (8)(D)— 

7 (A) in clause (i), by striking ‘‘class; and’’ 

8 and inserting ‘‘class.’’; 

9 (B) by striking clause (ii); and 

10 (C) by striking ‘‘description of—’’ and all 

11 that follows through ‘‘criteria that the Sec12 retary’’ and inserting ‘‘description of the cri13 teria that the Secretary’’; and 

14 (6) in paragraph (9)(A)(iv), by striking ‘‘para15 graph (6) or’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) Section 351(i)(3) of the Public Health Serv18 ice Act (42 U.S.C. 262(i)(3)) is amended by striking 

19 ‘‘that is shown to meet the standards described in 

20 subsection (k)(4)’’ and inserting ‘‘licensed under 

21 subsection (k)’’. 

22 (2) Section 352A of the Public Health Service 

23 Act (42 U.S.C. 263–1) is amended by striking ‘‘and 

24 interchangeable biosimilar biological products’’ each 

25 place it appears. 


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1 (3) Section 744G(14) of the Federal Food, 

2 Drug, and Cosmetic Act (21 U.S.C. 379j–51(14)) is 

3 amended by striking ‘‘, including a supplement re4 questing that the Secretary determine that the bio5 similar biological product meets the standards for 

6 interchangeability described in section 351(k)(4) of 

7 the Public Health Service Act’’. 

8 (4) Section 505B(l) of the Federal Food, Drug, 

9 and Cosmetic Act (21 U.S.C. 355c(l)) is amended to 

10 read as follows: 

11 ‘‘(l) BIOSIMILAR BIOLOGICAL PRODUCTS.—A biologi12 cal product for which an application is submitted under 

13 section 351(k) of the Public Health Service Act shall be 

14 considered to have a new active ingredient for purposes 

15 of this section, except that a pediatric assessment shall 

16 not be required for a claimed indication in a relevant pedi17 atric population if the assessment would involve— 

18 ‘‘(1) a condition of use that has not been pre19 viously approved for the reference product; or 

20 ‘‘(2) a dosage form, strength, or route of ad21 ministration that differs from that of the reference 

22 product.’’. 

23 (c) APPLICATION.—The amendment made by sub24 section (a)(4) to section 351(k)(6) of the Public Health 

25 Service Act (42 U.S.C. 262(k)(6)) shall apply only with 


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1 respect to applications approved under section 351(k) of 

2 such Act on or after the date of enactment of this Act. 

3 Any period of exclusivity granted under section 351(k)(6) 

4 of such Act with respect to an application approved under 

5 such section 351(k) before the date of enactment of this 

6 Act shall apply in accordance with such section 351(k)(6), 

7 as in effect on the day before the date of enactment of 

8 this Act. 

9 SEC. 353. PROMPT APPROVAL OF DRUGS RELATED TO 

10 SAFETY INFORMATION. 

11 Section 505 of the Federal Food, Drug, and Cosmetic 

12 Act (21 U.S.C. 355) is amended by adding at the end the 

13 following: 

14 ‘‘(aa) PROMPT APPROVAL OF DRUGS WHEN SAFETY

15 INFORMATION IS ADDED TO LABELING.— 

16 ‘‘(1) GENERAL RULE.—A drug for which an ap17 plication has been submitted or approved under sub18 section (b)(2) or (j) shall not be considered ineligible 

19 for approval under this section or misbranded under 

20 section 502 on the basis that the labeling of the 

21 drug omits safety information, including contra22 indications, warnings, precautions, dosing, adminis23 tration, or other information pertaining to safety, 

24 when the omitted safety information is protected by 

25 exclusivity under clause (iii) or (iv) of subsection 


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1 (j)(5)(F), clause (iii) or (iv) of subsection (c)(3)(E), 

2 or section 527(a), or by an extension of such exclu3 sivity under section 505A or 505E. 

4 ‘‘(2) LABELING.—Notwithstanding clauses (iii) 

5 and (iv) of subsection (j)(5)(F), clauses (iii) and (iv) 

6 of subsection (c)(3)(E), or section 527, the Sec7 retary shall require that the labeling of a drug ap8 proved pursuant to an application submitted under 

9 subsection (b)(2) or (j) that omits safety information 

10 described in paragraph (1) include a statement of 

11 any appropriate safety information that the Sec12 retary considers necessary to assure safe use. 

13 ‘‘(3) AVAILABILITY AND SCOPE OF EXCLU14 SIVITY.—This subsection does not affect— 

15 ‘‘(A) the availability or scope of exclusivity 

16 or an extension of exclusivity described in sub17 paragraph (A) or (B) of section 505A(o)(3); 

18 ‘‘(B) the question of the eligibility for ap19 proval under this section of any application de20 scribed in subsection (b)(2) or (j) that omits 

21 any other aspect of labeling protected by exclu22 sivity under— 

23 ‘‘(i) clause (iii) or (iv) of subsection 

24 (j)(5)(F); 


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1 ‘‘(ii) clause (iii) or (iv) of subsection 

2 (c)(3)(E); or 

3 ‘‘(iii) section 527(a); or 

4 ‘‘(C) except as expressly provided in para5 graphs (1) and (2), the operation of this section 

6 or section 527.’’. 

7 SEC. 354. CONGRESSIONAL REVIEW OF THE FOOD AND 

8 DRUG ADMINISTRATION RULEMAKING. 

9 (a) CONGRESSIONAL REVIEW.—Part I of title 5, 

10 United States Code, is amended by inserting after chapter 

11 8 the following: 

12 ‘‘CHAPTER 8a—CONGRESSIONAL REVIEW 

13 OF FOOD AND DRUG ADMINISTRATION 

14 RULEMAKING 

‘‘Sec. 

‘‘810. Applicability. 

‘‘811. Congressional review. 

‘‘812. Congressional approval procedure for major rules. 

‘‘813. Congressional disapproval procedure for nonmajor rules. 

‘‘814. Definitions. 

‘‘815. Judicial review. 

‘‘816. Exemption for monetary policy. 

‘‘817. Effective date of certain rules. 

‘‘818. Regulatory cut-go requirement. 

‘‘819. Review of rules currently in effect. 

15 ‘‘§ 810. Applicability 

16 ‘‘This chapter applies in lieu of chapter 8 with respect 

17 to the Food and Drug Administration. 

18 ‘‘§ 811. Congressional review 

19 ‘‘(a)(1)(A) Before a rule may take effect, the Food 

20 and Drug Administration shall satisfy the requirements 


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1 of section 818 and shall publish in the Federal Register 

2 a list of information on which the rule is based, including 

3 data, scientific and economic studies, and cost-benefit 

4 analyses, and identify how the public can access such in5 formation online, and shall submit to each House of the 

6 Congress and to the Comptroller General a report con7 taining— 

8 ‘‘(i) a copy of the rule; 

9 ‘‘(ii) a concise general statement relating to the 

10 rule; 

11 ‘‘(iii) a classification of the rule as a major or 

12 nonmajor rule, including an explanation of the clas13 sification specifically addressing each criteria for a 

14 major rule contained within sections 814(2)(A), 

15 814(2)(B), and 814(2)(C); 

16 ‘‘(iv) a list of any other related regulatory ac17 tions intended to implement the same statutory pro18 vision or regulatory objective as well as the indi19 vidual and aggregate economic effects of those ac20 tions; and 

21 ‘‘(v) the proposed effective date of the rule. 

22 ‘‘(B) On the date of the submission of the report 

23 under subparagraph (A), the Food and Drug Administra24 tion shall submit to the Comptroller General and make 

25 available to each House of Congress— 


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1 ‘‘(i) a complete copy of the cost-benefit analysis 

2 of the rule, if any, including an analysis of any jobs 

3 added or lost, differentiating between public and pri4 vate sector jobs; 

5 ‘‘(ii) the Food and Drug Administration’s ac6 tions pursuant to sections 603, 604, 605, 607, and 

7 609 of this title; 

8 ‘‘(iii) the Food and Drug Administration’s ac9 tions pursuant to sections 202, 203, 204, and 205 

10 of the Unfunded Mandates Reform Act of 1995; and 

11 ‘‘(iv) any other relevant information or require12 ments under any other Act and any relevant Execu13 tive orders. 

14 ‘‘(C) Upon receipt of a report submitted under sub15 paragraph (A), each House shall provide copies of the re16 port to the chairman and ranking member of each stand17 ing committee with jurisdiction under the rules of the 

18 House of Representatives or the Senate to report a bill 

19 to amend the provision of law under which the rule is 

20 issued. 

21 ‘‘(2)(A) The Comptroller General shall provide a re22 port on each major rule to the committees of jurisdiction 

23 by the end of 15 calendar days after the submission or 

24 publication date. The report of the Comptroller General 

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1 istration’s compliance with procedural steps required by 

2 paragraph (1)(B) and an assessment of whether the major 

3 rule imposes any new limits or mandates on private-sector 

4 activity. 

5 ‘‘(B) The Food and Drug Administration shall co6 operate with the Comptroller General by providing infor7 mation relevant to the Comptroller General’s report under 

8 subparagraph (A). 

9 ‘‘(3) A major rule relating to a report submitted 

10 under paragraph (1) shall take effect upon enactment of 

11 a joint resolution of approval described in section 812 or 

12 as provided for in the rule following enactment of a joint 

13 resolution of approval described in section 812, whichever 

14 is later. 

15 ‘‘(4) A nonmajor rule shall take effect as provided 

16 by section 813 after submission to Congress under para17 graph (1). 

18 ‘‘(5) If a joint resolution of approval relating to a 

19 major rule is not enacted within the period provided in 

20 subsection (b)(2), then a joint resolution of approval relat21 ing to the same rule may not be considered under this 

22 chapter in the same Congress by either the House of Rep23 resentatives or the Senate. 


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1 ‘‘(b)(1) A major rule shall not take effect unless the 

2 Congress enacts a joint resolution of approval described 

3 under section 812. 

4 ‘‘(2) If a joint resolution described in subsection (a) 

5 is not enacted into law by the end of 70 session days or 

6 legislative days, as applicable, beginning on the date on 

7 which the report referred to in section 811(a)(1)(A) is re8 ceived by Congress (excluding days either House of Con9 gress is adjourned for more than 3 days during a session 

10 of Congress), then the rule described in that resolution 

11 shall be deemed not to be approved and such rule shall 

12 not take effect. 

13 ‘‘(c)(1) Notwithstanding any other provision of this 

14 section (except subject to paragraph (3)), a major rule 

15 may take effect for one 90-calendar-day period if the 

16 President makes a determination under paragraph (2) and 

17 submits written notice of such determination to the Con18 gress. 

19 ‘‘(2) Paragraph (1) applies to a determination made 

20 by the President by Executive order that the major rule 

21 should take effect because such rule is— 

22 ‘‘(A) necessary because of an imminent threat 

23 to health or safety or other emergency; 

24 ‘‘(B) necessary for the enforcement of criminal 

25 laws; 


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1 ‘‘(C) necessary for national security; or 

2 ‘‘(D) issued pursuant to any statute imple3 menting an international trade agreement. 

4 ‘‘(3) An exercise by the President of the authority 

5 under this subsection shall have no effect on the proce6 dures under section 812. 

7 ‘‘(d)(1) In addition to the opportunity for review oth8 erwise provided under this chapter, in the case of any rule 

9 for which a report was submitted in accordance with sub10 section (a)(1)(A) during the period beginning on the date 

11 occurring— 

12 ‘‘(A) in the case of the Senate, 60 session days; 

13 or 

14 ‘‘(B) in the case of the House of Representa15 tives, 60 legislative days, 

16 before the date the Congress is scheduled to adjourn a 

17 session of Congress through the date on which the same 

18 or succeeding Congress first convenes its next session, sec19 tions 812 and 813 shall apply to such rule in the suc20 ceeding session of Congress. 

21 ‘‘(2)(A) In applying sections 812 and 813 for pur22 poses of such additional review, a rule described under 

23 paragraph (1) shall be treated as though— 

24 ‘‘(i) such rule were published in the Federal 

25 Register on— 


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1 ‘‘(I) in the case of the Senate, the 15th 

2 session day; or 

3 ‘‘(II) in the case of the House of Rep4 resentatives, the 15th legislative day, 

5 after the succeeding session of Congress first con6 venes; and 

7 ‘‘(ii) a report on such rule were submitted to 

8 Congress under subsection (a)(1) on such date. 

9 ‘‘(B) Nothing in this paragraph shall be construed 

10 to affect the requirement under subsection (a)(1) that a 

11 report shall be submitted to Congress before a rule can 

12 take effect. 

13 ‘‘(3) A rule described under paragraph (1) shall take 

14 effect as otherwise provided by law (including other sub15 sections of this section). 

16 ‘‘§ 812. Congressional approval procedure for major 

17 rules 

18 ‘‘(a)(1) For purposes of this section, the term ‘joint 

19 resolution’ means only a joint resolution addressing a re20 port classifying a rule as major pursuant to section 

21 811(a)(1)(A)(iii) that— 

22 ‘‘(A) bears no preamble; 

23 ‘‘(B) bears the following title (with blanks filled 

24 as appropriate): ‘Approving the rule submitted by 

25 lll relating to lll.’; 


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1 ‘‘(C) includes after its resolving clause only the 

2 following (with blanks filled as appropriate): ‘That 

3 Congress approves the rule submitted by lll re4 lating to lll.’; and 

5 ‘‘(D) is introduced pursuant to paragraph (2). 

6 ‘‘(2) After a House of Congress receives a report 

7 classifying a rule as major pursuant to section 

8 811(a)(1)(A)(iii), the majority leader of that House (or 

9 his or her respective designee) shall introduce (by request, 

10 if appropriate) a joint resolution described in paragraph 

11 (1)— 

12 ‘‘(A) in the case of the House of Representa13 tives, within 3 legislative days; and 

14 ‘‘(B) in the case of the Senate, within 3 session 

15 days. 

16 ‘‘(3) A joint resolution described in paragraph (1) 

17 shall not be subject to amendment at any stage of pro18 ceeding. 

19 ‘‘(b) A joint resolution described in subsection (a) 

20 shall be referred in each House of Congress to the commit21 tees having jurisdiction over the provision of law under 

22 which the rule is issued. 

23 ‘‘(c) In the Senate, if the committee or committees 

24 to which a joint resolution described in subsection (a) has 

25 been referred have not reported it at the end of 15 session 


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1 days after its introduction, such committee or committees 

2 shall be automatically discharged from further consider3 ation of the resolution and it shall be placed on the cal4 endar. A vote on final passage of the resolution shall be 

5 taken on or before the close of the 15th session day after 

6 the resolution is reported by the committee or committees 

7 to which it was referred, or after such committee or com8 mittees have been discharged from further consideration 

9 of the resolution. 

10 ‘‘(d)(1) In the Senate, when the committee or com11 mittees to which a joint resolution is referred have re12 ported, or when a committee or committees are discharged 

13 (under subsection (c)) from further consideration of a 

14 joint resolution described in subsection (a), it is at any 

15 time thereafter in order (even though a previous motion 

16 to the same effect has been disagreed to) for a motion 

17 to proceed to the consideration of the joint resolution, and 

18 all points of order against the joint resolution (and against 

19 consideration of the joint resolution) are waived. The mo20 tion is not subject to amendment, or to a motion to post21 pone, or to a motion to proceed to the consideration of 

22 other business. A motion to reconsider the vote by which 

23 the motion is agreed to or disagreed to shall not be in 

24 order. If a motion to proceed to the consideration of the 

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1 main the unfinished business of the Senate until disposed 

2 of. 

3 ‘‘(2) In the Senate, debate on the joint resolution, 

4 and on all debatable motions and appeals in connection 

5 therewith, shall be limited to not more than 2 hours, which 

6 shall be divided equally between those favoring and those 

7 opposing the joint resolution. A motion to further limit 

8 debate is in order and not debatable. An amendment to, 

9 or a motion to postpone, or a motion to proceed to the 

10 consideration of other business, or a motion to recommit 

11 the joint resolution is not in order. 

12 ‘‘(3) In the Senate, immediately following the conclu13 sion of the debate on a joint resolution described in sub14 section (a), and a single quorum call at the conclusion of 

15 the debate if requested in accordance with the rules of the 

16 Senate, the vote on final passage of the joint resolution 

17 shall occur. 

18 ‘‘(4) Appeals from the decisions of the Chair relating 

19 to the application of the rules of the Senate to the proce20 dure relating to a joint resolution described in subsection 

21 (a) shall be decided without debate. 

22 ‘‘(e) In the House of Representatives, if any com23 mittee to which a joint resolution described in subsection 

24 (a) has been referred has not reported it to the House 

25 at the end of 15 legislative days after its introduction, 


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1 such committee shall be discharged from further consider2 ation of the joint resolution, and it shall be placed on the 

3 appropriate calendar. On the second and fourth Thursdays 

4 of each month it shall be in order at any time for the 

5 Speaker to recognize a Member who favors passage of a 

6 joint resolution that has appeared on the calendar for at 

7 least 5 legislative days to call up that joint resolution for 

8 immediate consideration in the House without intervention 

9 of any point of order. When so called up a joint resolution 

10 shall be considered as read and shall be debatable for 1 

11 hour equally divided and controlled by the proponent and 

12 an opponent, and the previous question shall be considered 

13 as ordered to its passage without intervening motion. It 

14 shall not be in order to reconsider the vote on passage. 

15 If a vote on final passage of the joint resolution has not 

16 been taken by the third Thursday on which the Speaker 

17 may recognize a Member under this subsection, such vote 

18 shall be taken on that day. 

19 ‘‘(f)(1) If, before passing a joint resolution described 

20 in subsection (a), one House receives from the other a 

21 joint resolution having the same text, then— 

22 ‘‘(A) the joint resolution of the other House 

23 shall not be referred to a committee; and 

24 ‘‘(B) the procedure in the receiving House shall 

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1 ceived from the other House until the vote on pas2 sage, when the joint resolution received from the 

3 other House shall supplant the joint resolution of 

4 the receiving House. 

5 ‘‘(2) This subsection shall not apply to the House of 

6 Representatives if the joint resolution received from the 

7 Senate is a revenue measure. 

8 ‘‘(g) If either House has not taken a vote on final 

9 passage of the joint resolution by the last day of the period 

10 described in section 811(b)(2), then such vote shall be 

11 taken on that day. 

12 ‘‘(h) This section and section 813 are enacted by 

13 Congress— 

14 ‘‘(1) as an exercise of the rulemaking power of 

15 the Senate and House of Representatives, respec16 tively, and as such is deemed to be part of the rules 

17 of each House, respectively, but applicable only with 

18 respect to the procedure to be followed in that 

19 House in the case of a joint resolution described in 

20 subsection (a) and superseding other rules only 

21 where explicitly so; and 

22 ‘‘(2) with full recognition of the Constitutional 

23 right of either House to change the rules (so far as 

24 they relate to the procedure of that House) at any 


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1 time, in the same manner and to the same extent as 

2 in the case of any other rule of that House. 

3 ‘‘§ 813. Congressional disapproval procedure for 

4 nonmajor rules 

5 ‘‘(a) For purposes of this section, the term ‘joint res6 olution’ means only a joint resolution introduced in the 

7 period beginning on the date on which the report referred 

8 to in section 811(a)(1)(A) is received by Congress and 

9 ending 60 days thereafter (excluding days either House 

10 of Congress is adjourned for more than 3 days during a 

11 session of Congress), the matter after the resolving clause 

12 of which is as follows: ‘That Congress disapproves the 

13 nonmajor rule submitted by the lll relating to 

14 lll, and such rule shall have no force or effect.’ (The 

15 blank spaces being appropriately filled in). 

16 ‘‘(b) A joint resolution described in subsection (a) 

17 shall be referred to the committees in each House of Con18 gress with jurisdiction. 

19 ‘‘(c) In the Senate, if the committee to which is re20 ferred a joint resolution described in subsection (a) has 

21 not reported such joint resolution (or an identical joint 

22 resolution) at the end of 15 session days after the date 

23 of introduction of the joint resolution, such committee may 

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1 bers of the Senate, and such joint resolution shall be 

2 placed on the calendar. 

3 ‘‘(d)(1) In the Senate, when the committee to which 

4 a joint resolution is referred has reported, or when a com5 mittee is discharged (under subsection (c)) from further 

6 consideration of a joint resolution described in subsection 

7 (a), it is at any time thereafter in order (even though a 

8 previous motion to the same effect has been disagreed to) 

9 for a motion to proceed to the consideration of the joint 

10 resolution, and all points of order against the joint resolu11 tion (and against consideration of the joint resolution) are 

12 waived. The motion is not subject to amendment, or to 

13 a motion to postpone, or to a motion to proceed to the 

14 consideration of other business. A motion to reconsider the 

15 vote by which the motion is agreed to or disagreed to shall 

16 not be in order. If a motion to proceed to the consideration 

17 of the joint resolution is agreed to, the joint resolution 

18 shall remain the unfinished business of the Senate until 

19 disposed of. 

20 ‘‘(2) In the Senate, debate on the joint resolution, 

21 and on all debatable motions and appeals in connection 

22 therewith, shall be limited to not more than 10 hours, 

23 which shall be divided equally between those favoring and 

24 those opposing the joint resolution. A motion to further 

25 limit debate is in order and not debatable. An amendment 


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1 to, or a motion to postpone, or a motion to proceed to 

2 the consideration of other business, or a motion to recom3 mit the joint resolution is not in order. 

4 ‘‘(3) In the Senate, immediately following the conclu5 sion of the debate on a joint resolution described in sub6 section (a), and a single quorum call at the conclusion of 

7 the debate if requested in accordance with the rules of the 

8 Senate, the vote on final passage of the joint resolution 

9 shall occur. 

10 ‘‘(4) Appeals from the decisions of the Chair relating 

11 to the application of the rules of the Senate to the proce12 dure relating to a joint resolution described in subsection 

13 (a) shall be decided without debate. 

14 ‘‘(e) In the Senate, the procedure specified in sub15 section (c) or (d) shall not apply to the consideration of 

16 a joint resolution respecting a nonmajor rule— 

17 ‘‘(1) after the expiration of the 60 session days 

18 beginning with the applicable submission or publica19 tion date; or 

20 ‘‘(2) if the report under section 811(a)(1)(A) 

21 was submitted during the period referred to in sec22 tion 811(d)(1), after the expiration of the 60 session 

23 days beginning on the 15th session day after the 

24 succeeding session of Congress first convenes. 


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1 ‘‘(f) If, before the passage by one House of a joint 

2 resolution of that House described in subsection (a), that 

3 House receives from the other House a joint resolution 

4 described in subsection (a), then the following procedures 

5 shall apply: 

6 ‘‘(1) The joint resolution of the other House 

7 shall not be referred to a committee. 

8 ‘‘(2) With respect to a joint resolution described 

9 in subsection (a) of the House receiving the joint 

10 resolution— 

11 ‘‘(A) the procedure in that House shall be 

12 the same as if no joint resolution had been re13 ceived from the other House; but 

14 ‘‘(B) the vote on final passage shall be on 

15 the joint resolution of the other House. 

16 ‘‘§ 814. Definitions 

17 ‘‘For purposes of this chapter: 

18 ‘‘(1) The term ‘major rule’ means any rule of 

19 the Food and Drug Administration, including an in20 terim final rule, that the Administrator of the Office 

21 of Information and Regulatory Affairs of the Office 

22 of Management and Budget finds has resulted in or 

23 is likely to result in— 


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1 ‘‘(A) an annual cost on the economy of 

2 $100,000,000 or more, adjusted annually for 

3 inflation; 

4 ‘‘(B) a major increase in costs or prices for 

5 consumers, individual industries, Federal, 

6 State, or local government agencies, or geo7 graphic regions; or 

8 ‘‘(C) significant adverse effects on competi9 tion, employment, investment, productivity, in10 novation, or on the ability of United States11 based enterprises to compete with foreign-based 

12 enterprises in domestic and export markets. 

13 ‘‘(2) The term ‘nonmajor rule’ means any rule 

14 of the Food and Drug Administration that is not a 

15 major rule. 

16 ‘‘(3) The term ‘rule’ has the meaning given 

17 such term in section 551, except that such term does 

18 not include— 

19 ‘‘(A) any rule of particular applicability; 

20 ‘‘(B) any rule relating to agency manage21 ment or personnel; or 

22 ‘‘(C) any rule of agency organization, pro23 cedure, or practice that does not substantially 

24 affect the rights or obligations of non-agency 

25 parties. 


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1 ‘‘(4) The term ‘submission date or publication 

2 date’, except as otherwise provided in this chapter, 

3 means— 

4 ‘‘(A) in the case of a major rule, the date 

5 on which the Congress receives the report sub6 mitted under section 811(a)(1); and 

7 ‘‘(B) in the case of a nonmajor rule, the 

8 later of— 

9 ‘‘(i) the date on which the Congress 

10 receives the report submitted under section 

11 811(a)(1); and 

12 ‘‘(ii) the date on which the nonmajor 

13 rule is published in the Federal Register, if 

14 so published. 

15 ‘‘§ 815. Judicial review 

16 ‘‘(a) No determination, finding, action, or omission 

17 under this chapter shall be subject to judicial review. 

18 ‘‘(b) Notwithstanding subsection (a), a court may de19 termine whether the Food and Drug Administration has 

20 completed the necessary requirements under this chapter 

21 for a rule to take effect. 

22 ‘‘(c) The enactment of a joint resolution of approval 

23 under section 812 shall not be interpreted to serve as a 

24 grant or modification of statutory authority by Congress 

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1 fect any claim, whether substantive or procedural, against 

2 any alleged defect in a rule, and shall not form part of 

3 the record before the court in any judicial proceeding con4 cerning a rule except for purposes of determining whether 

5 or not the rule is in effect. 

6 ‘‘§ 816. Exemption for monetary policy 

7 ‘‘Nothing in this chapter shall apply to rules that con8 cern monetary policy proposed or implemented by the 

9 Board of Governors of the Federal Reserve System or the 

10 Federal Open Market Committee. 

11 ‘‘§ 817. Effective date of certain rules 

12 ‘‘Notwithstanding section 811, any rule other than a 

13 major rule which the Food and Drug Administration for 

14 good cause finds (and incorporates the finding and a brief 

15 statement of reasons therefore in the rule issued) that no16 tice and public procedure thereon are impracticable, un17 necessary, or contrary to the public interest, shall take ef18 fect at such time as the Food and Drug Administration 

19 determines. 

20 ‘‘§ 818. Regulatory cut-go requirement 

21 ‘‘In making any new rule, the Food and Drug Admin22 istration shall identify a rule or rules that may be amend23 ed or repealed to completely offset any annual costs of 

24 the new rule to the United States economy. Before the 

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1 tion shall make each such repeal or amendment. In mak2 ing such an amendment or repeal, the Food and Drug Ad3 ministration shall comply with the requirements of sub4 chapter II of chapter 5, but the Food and Drug Adminis5 tration may consolidate proceedings under subchapter II 

6 (of chapter 5) with proceedings on the new rule. 

7 ‘‘§ 819. Review of rules currently in effect 

8 ‘‘(a) ANNUAL REVIEW.—Beginning on the date that 

9 is 6 months after the date of enactment of this section 

10 and annually thereafter for the 9 years following, the Food 

11 and Drug Administration shall designate not less than 10 

12 percent of eligible rules made by the Food and Drug Ad13 ministration for review, and shall submit a report includ14 ing each such eligible rule in the same manner as a report 

15 under section 811(a)(1). Section 811, section 812, and 

16 section 813 shall apply to each such rule, subject to sub17 section (c) of this section. No eligible rule previously des18 ignated may be designated again. 

19 ‘‘(b) SUNSET FOR ELIGIBLE RULES NOT EX20 TENDED.—Beginning after the date that is 10 years after 

21 the date of enactment of this section, if Congress has not 

22 enacted a joint resolution of approval for that eligible rule, 

23 that eligible rule shall not continue in effect. 


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1 ‘‘(c) CONSOLIDATION; SEVERABILITY.—In applying 

2 sections 811, 812, and 813 to eligible rules under this sec3 tion, the following shall apply: 

4 ‘‘(1) The words ‘take effect’ shall be read as 

5 ‘continue in effect’. 

6 ‘‘(2) Except as provided in paragraph (3), a 

7 single joint resolution of approval shall apply to all 

8 eligible rules in a report designated for a year, and 

9 the matter after the resolving clause of that joint 

10 resolution is as follows: ‘That Congress approves the 

11 rules submitted by the ll for the year ll.’ (The 

12 blank spaces being appropriately filled in). 

13 ‘‘(3) It shall be in order to consider any amend14 ment that provides for specific conditions on which 

15 the approval of a particular eligible rule included in 

16 the joint resolution is contingent. 

17 ‘‘(4) A member of either House may move that 

18 a separate joint resolution be required for a specified 

19 rule. 

20 ‘‘(d) DEFINITION.—In this section, the term ‘eligible 

21 rule’ means a rule that is in effect as of the date of enact22 ment of this section.’’. 

23 (b) BUDGETARY EFFECTS OF RULES SUBJECT TO

24 SECTION 922 OF TITLE 5, UNITED STATES CODE.—Sec25 tion 257(b)(2) of the Balanced Budget and Emergency 


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1 Deficit Control Act of 1985 is amended by adding at the 

2 end the following new subparagraph: 

3 ‘‘(E) BUDGETARY EFFECTS OF RULES

4 SUBJECT TO SECTION 922 OF TITLE 5, UNITED

5 STATES CODE.—Any rules subject to the con6 gressional approval procedure set forth in sec7 tion 922 of chapter 8 of title 5, United States 

8 Code, affecting budget authority, outlays, or re9 ceipts shall be assumed to be effective unless it 

10 is not approved in accordance with such sec11 tion.’’. 

12 (c) GOVERNMENT ACCOUNTABILITY OFFICE STUDY

13 OF RULES.— 

14 (1) IN GENERAL.—The Comptroller General of 

15 the United States shall conduct a study to deter16 mine, as of the date of the enactment of this Act— 

17 (A) how many rules (as such term is de18 fined in section 814 of title 5, United States 

19 Code) of the Food and Drug Administration 

20 were in effect; 

21 (B) how many major rules (as such term 

22 is defined in section 814 of title 5, United 

23 States Code) of the Food and Drug Administra24 tion were in effect; and 


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1 (C) the total estimated economic cost im2 posed by all such rules. 

3 (2) REPORT.—Not later than 1 year after the 

4 date of the enactment of this Act, the Comptroller 

5 General of the United States shall submit a report 

6 to Congress that contains the findings of the study 

7 conducted under paragraph (1). 

8 (d) EFFECTIVE DATE.—Subsections (a) and (b), and 

9 the amendments made by such sections, shall take effect 

10 beginning on the date that is 1 year after the date of en11 actment of this Act. 

12 SEC. 355. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

13 OF RULES. 

14 (a) IN GENERAL.—The Comptroller General of the 

15 United States shall conduct a study to determine, as of 

16 the date of the enactment of this Act— 

17 (1) how many rules (as such term is defined in 

18 section 804 of title 5, United States Code) were in 

19 effect; 

20 (2) how many major rules (as such term is de21 fined in section 804 of title 5, United States Code) 

22 were in effect; and 

23 (3) the total estimated economic cost imposed 

24 by all such rules. 


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1 (b) REPORT.—Not later than 1 year after the date 

2 of the enactment of this Act, the Comptroller General of 

3 the United States shall submit a report to Congress that 

4 contains the findings of the study conducted under sub5 section (a). 

6 Subtitle D—Prescription Drug and 

7 Pharmacy Benefit Manager 

8 Transparency 

9 SEC. 361. PATENT DISCLOSURE REQUIREMENTS. 

10 (a) IN GENERAL.—Section 351 of the Public Health 

11 Service Act (42 U.S.C. 262) is amended by adding at the 

12 end the following: 

13 ‘‘(o) ADDITIONAL REQUIREMENTS WITH RESPECT

14 TO PATENTS.— 

15 ‘‘(1) APPROVED APPLICATION HOLDER LISTING

16 REQUIREMENTS.— 

17 ‘‘(A) IN GENERAL.—Beginning on the date 

18 of enactment of this subsection, within 30 days 

19 of approval of an application under subsection 

20 (a) or (k), the holder of such approved applica21 tion shall submit to the Secretary a list of each 

22 patent required to be disclosed (as described in 

23 paragraph (3)). 

24 ‘‘(B) PREVIOUSLY APPROVED OR LI25 CENSED BIOLOGICAL PRODUCTS.— 


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1 ‘‘(i) PRODUCTS APPROVED UNDER

2 SECTION 351 OF THE PHSA.—Not later 

3 than 30 days after the date of enactment 

4 of the Fair Care Act of 2024, the holder 

5 of a biological product license that was ap6 proved under subsection (a) or (k) before 

7 the date of enactment of such Act shall 

8 submit to the Secretary a list of each pat9 ent required to be disclosed (as described 

10 in paragraph (3)). 

11 ‘‘(ii) PRODUCTS APPROVED UNDER

12 SECTION 505 OF THE FFDCA.—Not later 

13 than 30 days after March 23, 2021, the 

14 holder of an approved application for a bio15 logical product under section 505 of the 

16 Federal Food, Drug, and Cosmetic Act 

17 that is deemed to be a license for the bio18 logical product under this section on 

19 March 23, 2021, shall submit a list of each 

20 patent required to be disclosed (as de21 scribed in paragraph (3)). 

22 ‘‘(C) UPDATES.—The holder of a biological 

23 product license approved under subsection (a) 

24 or (k) shall submit to the Secretary a list that 

25 includes— 


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1 ‘‘(i) any patent first required to be 

2 disclosed (as described in paragraph (3)) 

3 after the submission under subparagraph 

4 (A) or (B), as applicable, within 30 days of 

5 the earlier of— 

6 ‘‘(I) the date of issuance of such 

7 patent by the United States Patent 

8 and Trademark Office; or 

9 ‘‘(II) the date of approval of a 

10 supplemental application for the bio11 logical product; and 

12 ‘‘(ii) any patent, or any claim with re13 spect to a patent, included on the list pur14 suant to this paragraph with respect to the 

15 biological product subsequently determined 

16 to be invalid or unenforceable, within 30 

17 days of a determination of patent inva18 lidity. 

19 ‘‘(2) PUBLICATION OF INFORMATION.— 

20 ‘‘(A) IN GENERAL.—Within 1 year of the 

21 date of enactment of the Fair Care Act of 

22 2024, the Secretary shall publish and make 

23 available to the public a single, easily search24 able, list that includes— 


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1 ‘‘(i) the official and proprietary name 

2 of each biological product licensed under 

3 subsection (a) or (k), and of each biological 

4 product application approved under section 

5 505 of the Federal Food, Drug, and Cos6 metic Act and deemed to be a license for 

7 the biological product under this section on 

8 March 23, 2021; 

9 ‘‘(ii) with respect to each biological 

10 product described in clause (i), each patent 

11 submitted in accordance with paragraph 

12 (1); 

13 ‘‘(iii) the date of licensure and appli14 cation number for each such biological 

15 product; 

16 ‘‘(iv) the marketing status, dosage 

17 form, route of administration, strength, 

18 and, if applicable, reference product, for 

19 each such biological product; 

20 ‘‘(v) the licensure status for each such 

21 biological product, including whether the li22 cense at the time of listing is approved, 

23 withdrawn, or revoked; 

24 ‘‘(vi) any period of any exclusivity 

25 under subsection (k)(7)(A) or subsection 


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1 (k)(7)(B) of this section or section 527 of 

2 the Federal Food, Drug, and Cosmetic 

3 Act, and any extension of such period in 

4 accordance with subsection (m) of this sec5 tion with respect to each such biological 

6 product, and the date on which such exclu7 sivity expires; 

8 ‘‘(vii) information regarding any de9 termination related to biosimilarity or 

10 interchangeability for each such biological 

11 product; and 

12 ‘‘(viii) information regarding approved 

13 indications for each such biological prod14 uct, in such manner as the Secretary de15 termines appropriate. 

16 ‘‘(B) UPDATES.—Every 30 days after the 

17 publication of the first list under subparagraph 

18 (A), the Secretary shall revise the list to in19 clude— 

20 ‘‘(i)(I) each biological product licensed 

21 under subsection (a) or (k) during the 30- 

22 day period; and 

23 ‘‘(II) with respect to each biological 

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1 formation described in clauses (i) through 

2 (viii) of subparagraph (A); and 

3 ‘‘(ii) any updates to information pre4 viously published in accordance with sub5 paragraph (A). 

6 ‘‘(3) PATENTS REQUIRED TO BE DISCLOSED.— 

7 In this section, a ‘patent required to be disclosed’ is 

8 any patent for which the holder of a biological prod9 uct license approved under subsection (a) or (k), or 

10 a biological product application approved under sec11 tion 505 of the Federal Food, Drug, and Cosmetic 

12 Act and deemed to be a license for a biological prod13 uct under this section on March 23, 2021, believes 

14 a claim of patent infringement could reasonably be 

15 asserted by the holder, or by a patent owner that 

16 has granted an exclusive license to the holder with 

17 respect to the biological product that is the subject 

18 of such license, if a person not licensed by the holder 

19 engaged in the making, using, offering to sell, sell20 ing, or importing into the United States of the bio21 logical product that is the subject of such license.’’. 

22 (b) DISCLOSURE OF PATENTS.—Section 

23 351(l)(3)(A)(i) of the Public Health Service Act (42 

24 U.S.C. 262(l)(3)(A)(i)) is amended by inserting ‘‘included 


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1 in the list provided by the reference product sponsor under 

2 subsection (o)(1)’’ after ‘‘a list of patents’’. 

3 (c) RESTRICTION ON CLAIMS OF PATENT INFRINGE4 MENT.—Section 271(e) of title 35, United States Code, 

5 is amended by adding at the end the following: 

6 ‘‘(7) The owner of a patent that should have 

7 been included in the list described in section 

8 351(o)(1) of the Public Health Service Act (42 

9 U.S.C. 262(o)(1)), including any updates required 

10 under subparagraph (C) of that section, but was not 

11 timely included in such list, may not bring an action 

12 under this section for infringement of the patent.’’. 

13 (d) REGULATIONS.—The Secretary of Health and 

14 Human Services may promulgate regulations to carry out 

15 subsection (o) of section 351 of the Public Health Service 

16 Act (42 U.S.C. 262), as added by subsection (a). 

17 (e) RULE OF CONSTRUCTION.—Nothing in this Act, 

18 including an amendment made by this Act, shall be con19 strued to require or allow the Secretary of Health and 

20 Human Services to delay the licensing of a biological prod21 uct under section 351 of the Public Health Service Act 

22 (42 U.S.C. 262). 


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1 SEC. 362. REQUIREMENTS WITH RESPECT TO PRESCRIP2 TION DRUG BENEFITS. 

3 (a) IN GENERAL.—Subpart II of part A of title 

4 XXVII of the Public Health Service Act (42 U.S.C. 

5 300gg–11 et seq.) is amended by adding at the end the 

6 following: 

7 ‘‘SEC. 2729A. REQUIREMENTS WITH RESPECT TO PRESCRIP8 TION DRUG BENEFITS. 

9 ‘‘A group health plan or a health insurance issuer of10 fering group or individual health insurance coverage shall 

11 not, and shall ensure that any entity that provides phar12 macy benefits management services under a contract with 

13 any such health plan or health insurance coverage does 

14 not, receive from a drug manufacturer a reduction in price 

15 or other remuneration with respect to any prescription 

16 drug received by an enrollee in the plan or coverage and 

17 covered by the plan or coverage, unless— 

18 ‘‘(1) any such reduction in price is reflected at 

19 the point of sale to the enrollee; and 

20 ‘‘(2) any such other remuneration is a flat fee21 based service fee that a manufacturer of prescription 

22 drugs pays to a pharmacy benefit manager for serv23 ices rendered to the manufacturer that relate to ar24 rangements by the pharmacy benefit manager to 

25 provide pharmacy benefit management services to a 

26 health plan or health insurance issuer, if certain 


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1 conditions established by the Secretary are met, in2 cluding requirements that the fees are transparent 

3 to the health plan or health insurance issuer.’’. 

4 (b) EFFECTIVE DATE.—Section 2729A of the Public 

5 Health Service Act, as added by subsection (a), shall take 

6 effect on January 1, 2025. 

7 SEC. 363. PBM TRANSPARENCY AND ELIMINATION OF DIR 

8 FEES. 

9 (a) PROHIBITING MEDICARE PDP SPONSORS AND

10 MA–PD ORGANIZATIONS FROM RETROACTIVELY REDUC11 ING PAYMENT ON CLEAN CLAIMS SUBMITTED BY PHAR12 MACIES.— 

13 (1) IN GENERAL.—Section 1860D–12(b)(4)(A) 

14 of the Social Security Act (42 U.S.C. 1395w– 

15 112(b)(4)(A)) is amended by adding at the end the 

16 following new clause: 

17 ‘‘(iv) PROHIBITING RETROACTIVE RE18 DUCTIONS IN PAYMENTS ON CLEAN

19 CLAIMS.—Each contract entered into with 

20 a PDP sponsor under this part with re21 spect to a prescription drug plan offered 

22 by such sponsor shall provide that after 

23 the date of receipt of a clean claim sub24 mitted by a pharmacy, the PDP sponsor 

25 (or an agent of the PDP sponsor) may not 


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1 retroactively reduce payment on such claim 

2 directly or indirectly through aggregated 

3 effective rate or otherwise except in the 

4 case such claim is found to not be a clean 

5 claim (such as in the case of a claim lack6 ing required substantiating documentation) 

7 during the course of a routine audit as 

8 permitted pursuant to written agreement 

9 between the PDP sponsor (or such an 

10 agent) and such pharmacy. The previous 

11 sentence shall not prohibit any retroactive 

12 increase in payment to a pharmacy pursu13 ant to a written agreement between a PDP 

14 sponsor (or an agent of such sponsor) and 

15 such pharmacy.’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by subsection (a) shall apply with respect to con18 tracts entered into on or after January 1, 2025. 

19 (b) ELIMINATION OF DIR FEES.— 

20 (1) PHARMACY BENEFITS MANAGER STAND21 ARDS UNDER THE MEDICARE PROGRAM FOR PRE22 SCRIPTION DRUG PLANS AND MA–PD PLANS.— 

23 (A) IN GENERAL.—Section 1860D–12(b) 

24 of the Social Security Act (42 U.S.C. 1395w– 


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1 112(b)) is amended by adding at the end the 

2 following new paragraph: 

3 ‘‘(7) PHARMACY BENEFITS MANAGER TRANS4 PARENCY REQUIREMENTS.—Each contract entered 

5 into with a PDP sponsor under this part with re6 spect to a prescription drug plan offered by such 

7 sponsor or with an MA organization offering an 

8 MA–PD plan under part C shall provide that the 

9 sponsor or organization, respectively, may not enter 

10 into a contract with any pharmacy benefits manager 

11 (referred to in this paragraph as a ‘PBM’) to man12 age the prescription drug coverage provided under 

13 such plan, or to control the costs of the prescription 

14 drug coverage under such plan, unless the PBM ad15 heres to the following criteria when handling person16 ally identifiable utilization and claims data or other 

17 sensitive patient data: 

18 ‘‘(A) The PBM may not transmit any per19 sonally identifiable utilization, protected health 

20 information, or claims data, with respect to a 

21 plan enrollee, to a pharmacy owned by a PBM 

22 if the plan enrollee has not voluntarily elected 

23 in writing or via secure electronic means to fill 

24 that particular prescription at the PBM-owned 

25 pharmacy. 


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1 ‘‘(B) The PBM may not require that a 

2 plan enrollee use a retail pharmacy, mail order 

3 pharmacy, specialty pharmacy, or other phar4 macy entity providing pharmacy services in 

5 which the PBM has an ownership interest or 

6 that has an ownership interest in the PBM, or 

7 provide an incentive to a plan enrollee to en8 courage the enrollee to use a retail pharmacy, 

9 mail order pharmacy, specialty pharmacy, or 

10 other pharmacy entity providing pharmacy serv11 ices in which the PBM has an ownership inter12 est or that has an ownership interest in the 

13 PBM, if the incentive is applicable only to such 

14 pharmacies.’’. 

15 (B) REGULAR UPDATE OF PRESCRIPTION

16 DRUG PRICING STANDARD.—Paragraph (6) of 

17 section 1860D–12(b) of the Social Security Act 

18 (42 U.S.C. 1395w–112(b)) is amended to read 

19 as follows: 

20 ‘‘(6) REGULAR UPDATE OF PRESCRIPTION

21 DRUG PRICING STANDARD.— 

22 ‘‘(A) IN GENERAL.—If the PDP sponsor of 

23 a prescription drug plan (or MA organization 

24 offering an MA–PD plan) uses a standard for 

25 reimbursement (as described in subparagraph 


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1 (B)) of pharmacies based on the cost of a drug, 

2 each contract entered into with such sponsor 

3 under this part (or organization under part C) 

4 with respect to the plan shall provide that the 

5 sponsor (or organization) shall— 

6 ‘‘(i) update such standard not less fre7 quently than once every 7 days, beginning 

8 with an initial update on January 1 of 

9 each year, to accurately reflect the market 

10 price of acquiring the drug; 

11 ‘‘(ii) disclose to applicable pharmacies 

12 and the contracting entities of such phar13 macies the sources used for making any 

14 such update immediately without require15 ment of request; 

16 ‘‘(iii) if the source for such a standard 

17 for reimbursement is not publicly available, 

18 disclose to the applicable pharmacies and 

19 the respective contracting entities of such 

20 pharmacies all individual drug prices to be 

21 so updated in advance of the use of such 

22 prices for the reimbursement of claims; 

23 ‘‘(iv) establish a process to appeal, in24 vestigate, and resolve disputes regarding 

25 individual drug prices that are less than 


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1 the pharmacy acquisition price for such 

2 drug, which must be adjudicated within 7 

3 days of the pharmacy filing its appeal; and 

4 ‘‘(v) provide all such pricing data in 

5 an .xml spreadsheet format or a com6 parable easily accessible and complete 

7 spreadsheet format. 

8 ‘‘(B) PRESCRIPTION DRUG PRICING

9 STANDARD DEFINED.—For purposes of sub10 paragraph (A), a standard for reimbursement 

11 of a pharmacy is any methodology or formula 

12 for varying the pricing of a drug or drugs dur13 ing the term of the pharmacy reimbursement 

14 contract that is based on the cost of the drug 

15 involved, including drug pricing references and 

16 amounts that are based upon average wholesale 

17 price, wholesale average cost, average manufac18 turer price, average sales price, maximum al19 lowable cost (MAC), or other costs, whether 

20 publicly available or not.’’. 

21 (C) EFFECTIVE DATE.—The amendments 

22 made by this section shall apply to plan years 

23 beginning on or after January 1, 2025. 

24 (2) REGULAR UPDATE OF PRESCRIPTION DRUG

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1 MACY PROGRAM.—Section 1074g(d) of title 10, 

2 United States Code, is amended by adding at the 

3 end the following new paragraph: 

4 ‘‘(3) To the extent practicable, with respect to the 

5 TRICARE retail pharmacy program described in sub6 section (a)(2)(E)(ii), the Secretary shall ensure that a con7 tract entered into with a TRICARE managed care support 

8 contractor includes requirements described in section 

9 1860D–12(b)(6) of the Social Security Act (42 U.S.C. 

10 1395w–112(b)(6)) to ensure the provision of information 

11 regarding the pricing standard for prescription drugs.’’. 

12 (3) PRESCRIPTION DRUG TRANSPARENCY IN

13 THE FEDERAL EMPLOYEES HEALTH BENEFITS PRO14 GRAM.— 

15 (A) IN GENERAL.—Section 8902 of title 5, 

16 United States Code, is amended by adding at 

17 the end the following new subsections: 

18 ‘‘(p) A contract may not be made or a plan approved 

19 under this chapter under which a carrier has an agree20 ment with a pharmacy benefits manager (in this sub21 section referred to as a ‘PBM’) to manage prescription 

22 drug coverage or to control the costs of the prescription 

23 drug coverage unless the carrier and PBM adhere to the 

24 following criteria: 


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1 ‘‘(1) The PBM may not transmit any personally 

2 identifiable utilization, protected health information, 

3 or claims data with respect to an individual enrolled 

4 under such contract or plan to a pharmacy owned by 

5 the PBM if the individual has not voluntarily elected 

6 in writing or via secure electronic means to fill that 

7 particular prescription at such a pharmacy. 

8 ‘‘(2) The PBM may not require that an indi9 vidual enrolled under such contract or plan use a re10 tail pharmacy, mail order pharmacy, specialty phar11 macy, or other pharmacy entity providing pharmacy 

12 services in which the PBM has an ownership interest 

13 or that has an ownership interest in the PBM or 

14 provide an incentive to a plan enrollee to encourage 

15 the enrollee to use a retail pharmacy, mail order 

16 pharmacy, specialty pharmacy, or other pharmacy 

17 entity providing pharmacy services in which the 

18 PBM has an ownership interest or that has an own19 ership interest in the PBM, if the incentive is appli20 cable only to such pharmacies. 

21 ‘‘(q)(1) If a contract made or plan approved under 

22 this chapter provides for a standard for reimbursement 

23 (as described in paragraph (2)) with respect to a prescrip24 tion drug plan, such contract or plan shall provide that 

25 the applicable carrier— 


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1 ‘‘(A) update such standard not less frequently 

2 than once every 7 days, beginning with an initial up3 date on January 1 of each year, to accurately reflect 

4 the market price of acquiring the drug; 

5 ‘‘(B) disclose to applicable pharmacies and the 

6 contracting entities of such pharmacies the sources 

7 used for making any such update immediately with8 out requirement of request; 

9 ‘‘(C) if the source for such a standard for reim10 bursement is not publicly available, disclose to the 

11 applicable pharmacies and contracting entities of 

12 such pharmacies all individual drug prices to be so 

13 updated in advance of the use of such prices for the 

14 reimbursement of claims; 

15 ‘‘(D) establish a process to appeal, investigate, 

16 and resolve disputes regarding individual drug prices 

17 that are less than the pharmacy acquisition price for 

18 such drug, which must be adjudicated within 7 days 

19 of the pharmacy filing its appeal; and 

20 ‘‘(E) provide all such pricing data in an .xml 

21 spreadsheet format or a comparable easily accessible 

22 and complete spreadsheet format. 

23 ‘‘(2) For purposes of paragraph (1), a standard for 

24 reimbursement of a pharmacy is any methodology or for25 mula for varying the pricing of a drug or drugs during 


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1 the term of the pharmacy reimbursement contract that is 

2 based on the cost of the drug involved, including drug pric3 ing references and amounts that are based upon average 

4 wholesale price, wholesale average cost, average manufac5 turer price, average sales price, maximum allowable cost, 

6 or other costs, whether publicly available or not.’’. 

7 (B) APPLICATION.—The amendment made 

8 by subparagraph (A) shall apply to any contract 

9 entered into under section 8902 of title 5, 

10 United States Code, on or after the date of en11 actment of this section. 

12 SEC. 364. HEALTH PLAN OVERSIGHT OF PHARMACY BEN13 EFIT MANAGER SERVICES. 

14 Subpart II of part A of title XXVII of the Public 

15 Health Service Act (42 U.S.C. 300gg–11 et seq.), as 

16 amended by the preceding sections, is further amended by 

17 adding at the end the following: 

18 ‘‘SEC. 2729E. HEALTH PLAN OVERSIGHT OF PHARMACY 

19 BENEFIT MANAGER SERVICES. 

20 ‘‘(a) IN GENERAL.—A group health plan or health 

21 insurance issuer offering group health insurance coverage 

22 or an entity or subsidiary providing pharmacy benefits 

23 management services shall not enter into a contract with 

24 a drug manufacturer, distributor, wholesaler, subcon25 tractor, rebate aggregator, or any associated third party 


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1 that limits the disclosure of information to plan sponsors 

2 in such a manner that prevents the plan or coverage, or 

3 an entity or subsidiary providing pharmacy benefits man4 agement services on behalf of a plan or coverage from 

5 making the reports described in subsection (b). 

6 ‘‘(b) REPORTS TO GROUP PLAN SPONSORS.— 

7 ‘‘(1) IN GENERAL.—Beginning with the first 

8 plan year that begins after the date of enactment of 

9 the Fair Care Act of 2024, not less frequently than 

10 once every 6 months, a health insurance issuer offer11 ing group health insurance coverage or an entity 

12 providing pharmacy benefits management services 

13 on behalf of a group health plan shall submit to the 

14 plan sponsor (as defined in section 3(16)(B) of the 

15 Employee Retirement Income Security Act of 1974) 

16 of such group health plan or health insurance cov17 erage a report in accordance with this subsection 

18 and make such report available to the plan sponsor 

19 in a machine-readable format. Each such report 

20 shall include, with respect to the applicable group 

21 health plan or health insurance coverage— 

22 ‘‘(A) information collected from drug man23 ufacturers by such issuer or entity on the total 

24 amount of copayment assistance dollars paid, or 

25 copayment cards applied, that were funded by 


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1 the drug manufacturer with respect to the en2 rollees in such plan or coverage; 

3 ‘‘(B) a list of each covered drug dispensed 

4 during the reporting period, including, with re5 spect to each such drug during the reporting 

6 period— 

7 ‘‘(i) the brand name, chemical entity, 

8 and National Drug Code; 

9 ‘‘(ii) the number of enrollees for 

10 whom the drug was filled during the plan 

11 year, the total number of prescription fills 

12 for the drug (including original prescrip13 tions and refills), and the total number of 

14 dosage units of the drug dispensed across 

15 the plan year, including whether the dis16 pensing channel was by retail, mail order, 

17 or specialty pharmacy; 

18 ‘‘(iii) the wholesale acquisition cost, 

19 listed as cost per days supply and cost per 

20 pill, or in the case of a drug in another 

21 form, per dose; 

22 ‘‘(iv) the total out-of-pocket spending 

23 by enrollees on such drug, including en24 rollee spending through copayments, coin25 surance, and deductibles; and 


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1 ‘‘(v) for any drug for which gross 

2 spending of the group health plan or 

3 health insurance coverage exceeded 

4 $10,000 during the reporting period— 

5 ‘‘(I) a list of all other available 

6 drugs in the same therapeutic cat7 egory or class, including brand name 

8 drugs and biological products and ge9 neric drugs or biosimilar biological 

10 products that are in the same thera11 peutic category or class; and 

12 ‘‘(II) the rationale for preferred 

13 formulary placement of a particular 

14 drug or drugs in that therapeutic cat15 egory or class; 

16 ‘‘(C) a list of each therapeutic category or 

17 class of drugs that were dispensed under the 

18 health plan or health insurance coverage during 

19 the reporting period, and, with respect to each 

20 such therapeutic category or class of drugs, 

21 during the reporting period— 

22 ‘‘(i) total gross spending by the plan, 

23 before manufacturer rebates, fees, or other 

24 manufacturer remuneration; 


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1 ‘‘(ii) the number of enrollees who 

2 filled a prescription for a drug in that cat3 egory or class; 

4 ‘‘(iii) if applicable to that category or 

5 class, a description of the formulary tiers 

6 and utilization mechanisms (such as prior 

7 authorization or step therapy) employed 

8 for drugs in that category or class; 

9 ‘‘(iv) the total out-of-pocket spending 

10 by enrollees, including enrollee spending 

11 through copayments, coinsurance, and 

12 deductibles; and 

13 ‘‘(v) for each therapeutic category or 

14 class under which 3 or more drugs are in15 cluded on the formulary of such plan or 

16 coverage— 

17 ‘‘(I) the amount received, or ex18 pected to be received, from drug man19 ufacturers in rebates, fees, alternative 

20 discounts, or other remuneration— 

21 ‘‘(aa) to be paid by drug 

22 manufacturers for claims in23 curred during the reporting pe24 riod; or 


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1 ‘‘(bb) that is related to utili2 zation of drugs, in such thera3 peutic category or class; 

4 ‘‘(II) the total net spending, after 

5 deducting rebates, price concessions, 

6 alternative discounts or other remu7 neration from drug manufacturers, by 

8 the health plan or health insurance 

9 coverage on that category or class of 

10 drugs; and 

11 ‘‘(III) the net price per course of 

12 treatment or 30-day supply incurred 

13 by the health plan or health insurance 

14 coverage and its enrollees, after man15 ufacturer rebates, fees, and other re16 muneration for drugs dispensed within 

17 such therapeutic category or class 

18 during the reporting period; 

19 ‘‘(D) total gross spending on prescription 

20 drugs by the plan or coverage during the re21 porting period, before rebates and other manu22 facturer fees or remuneration; 

23 ‘‘(E) total amount received, or expected to 

24 be received, by the health plan or health insur25 ance coverage in drug manufacturer rebates, 


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1 fees, alternative discounts, and all other remu2 neration received from the manufacturer or any 

3 third party, other than the plan sponsor, re4 lated to utilization of drug or drug spending 

5 under that health plan or health insurance cov6 erage during the reporting period; 

7 ‘‘(F) the total net spending on prescription 

8 drugs by the health plan or health insurance 

9 coverage during the reporting period; and 

10 ‘‘(G) amounts paid directly or indirectly in 

11 rebates, fees, or any other type of remuneration 

12 to brokers, consultants, advisors, or any other 

13 individual or firm who referred the group health 

14 plan’s or health insurance issuer’s business to 

15 the pharmacy benefit manager. 

16 ‘‘(2) PRIVACY REQUIREMENTS.—Health insur17 ance issuers offering group health insurance cov18 erage and entities providing pharmacy benefits man19 agement services on behalf of a group health plan 

20 shall provide information under paragraph (1) in a 

21 manner consistent with the privacy, security, and 

22 breach notification regulations promulgated under 

23 section 264(c) of the Health Insurance Portability 

24 and Accountability Act of 1996 (or successor regula25 tions), and shall restrict the use and disclosure of 


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1 such information according to such privacy regula2 tions. 

3 ‘‘(3) DISCLOSURE AND REDISCLOSURE.— 

4 ‘‘(A) LIMITATION TO BUSINESS ASSOCI5 ATES.—A group health plan receiving a report 

6 under paragraph (1) may disclose such informa7 tion only to business associates of such plan as 

8 defined in section 160.103 of title 45, Code of 

9 Federal Regulations (or successor regulations). 

10 ‘‘(B) CLARIFICATION REGARDING PUBLIC

11 DISCLOSURE OF INFORMATION.—Nothing in 

12 this section prevents a health insurance issuer 

13 offering group health insurance coverage or an 

14 entity providing pharmacy benefits management 

15 services on behalf of a group health plan from 

16 placing reasonable restrictions on the public dis17 closure of the information contained in a report 

18 described in paragraph (1), except that such 

19 issuer or entity may not restrict disclosure of 

20 such report to governmental agencies pursuant 

21 to an investigation or enforcement action. 

22 ‘‘(C) LIMITED FORM OF REPORT.—The 

23 Secretary shall define through rulemaking a 

24 limited form of the report under paragraph (1) 

25 required of plan sponsors who are drug manuVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00290 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 facturers, drug wholesalers, or other direct par2 ticipants in the drug supply chain, in order to 

3 prevent anti-competitive behavior. 

4 ‘‘(c) LIMITATIONS ON SPREAD PRICING.— 

5 ‘‘(1) PRESCRIPTION DRUG TRANSACTIONS WITH

6 PHARMACIES INDEPENDENT OF THE ISSUER OR

7 PHARMACY BENEFITS MANAGER.—If the pharmacy 

8 that dispenses a prescription drug to an enrollee in 

9 a group health plan or group or individual health in10 surance coverage is not wholly or partially owned by 

11 such plan, such issuer, or an entity providing phar12 macy benefit management services under such plan 

13 or coverage, such plan, issuer, or entity shall not 

14 charge the plan, issuer, or enrollee a price for such 

15 prescription drug that exceeds the price paid to the 

16 pharmacy. 

17 ‘‘(2) INTRA-COMPANY PRESCRIPTION DRUG

18 TRANSACTIONS.—If the mail order, specialty, or re19 tail pharmacy that dispenses a prescription drug to 

20 an enrollee in a group health plan or health insur21 ance coverage is wholly or partially owned by, and 

22 submits claims to, such health insurance issuer or 

23 an entity providing pharmacy benefit management 

24 services under a group health plan or group or indi25 vidual health insurance coverage, the price charged 


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1 for such drug by such pharmacy to such group 

2 health plan or health insurance issuer offering group 

3 or individual health insurance coverage may not ex4 ceed the lesser of— 

5 ‘‘(A) the amount paid to the pharmacy for 

6 acquisition of the drug; or 

7 ‘‘(B) the median price charged to the 

8 group health plan or health insurance issuer 

9 when the same drug is dispensed to enrollees in 

10 the plan or coverage by other similarly situated 

11 pharmacies not wholly or partially owned by the 

12 health insurance issuer or entity providing 

13 pharmacy benefits management services, as de14 scribed in paragraph (1). 

15 ‘‘(3) SUPPLEMENTARY REPORTING FOR INTRA16 COMPANY PRESCRIPTION DRUG TRANSACTIONS.—A 

17 health insurance issuer of group health insurance 

18 coverage or an entity providing pharmacy benefits 

19 management services under a group health plan or 

20 group health insurance coverage that conducts 

21 transactions with a wholly or partially owned phar22 macy, as described in paragraph (2), shall submit, 

23 together with the report under subsection (b), a sup24 plementary report every 6 months to the plan spon25 sor that includes— 


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1 ‘‘(A) an explanation of any benefit design 

2 parameters that encourage enrollees in the plan 

3 or coverage to fill prescriptions at mail order, 

4 specialty, or retail pharmacies that are wholly 

5 or partially owned by that issuer or entity; 

6 ‘‘(B) the percentage of total prescriptions 

7 charged to the plan, coverage, or enrollees in 

8 the plan or coverage, that were dispensed by 

9 mail order, specialty, or retail pharmacies that 

10 are wholly or partially owned by the issuer or 

11 entity providing pharmacy benefits management 

12 services; and 

13 ‘‘(C) a list of all drugs dispensed by such 

14 wholly or partially-owned pharmacy and 

15 charged to the plan or coverage, or enrollees of 

16 the plan or coverage, during the applicable 

17 quarter, and, with respect to each drug— 

18 ‘‘(i) the amount charged per course of 

19 treatment or 30-day supply with respect to 

20 enrollees in the plan or coverage, including 

21 amounts charged to the plan or coverage 

22 and amounts charged to the enrollee; 

23 ‘‘(ii) the median amount charged to 

24 the plan or coverage, per course of treat25 ment or 30-day supply, including amounts 


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1 paid by the enrollee, when the same drug 

2 is dispensed by other pharmacies that are 

3 not wholly or partially owned by the issuer 

4 or entity and that are included in the 

5 pharmacy network of that plan or cov6 erage; 

7 ‘‘(iii) the interquartile range of the 

8 costs, per course of treatment or 30-day 

9 supply, including amounts paid by the en10 rollee, when the same drug is dispensed by 

11 other pharmacies that are not wholly or 

12 partially owned by the issuer or entity and 

13 that are included in the pharmacy network 

14 of that plan or coverage; and 

15 ‘‘(iv) the lowest cost per course of 

16 treatment or 30-day supply, for such drug, 

17 including amounts charged to the plan or 

18 issuer and enrollee, that is available from 

19 any pharmacy included in the network of 

20 the plan or coverage. 

21 ‘‘(d) FULL REBATE PASS-THROUGH TO PLAN.— 

22 ‘‘(1) IN GENERAL.—A pharmacy benefits man23 ager, a third-party administrator of a group health 

24 plan, a health insurance issuer offering group health 

25 insurance coverage, or an entity providing pharmacy 


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1 benefits management services under such health 

2 plan or health insurance coverage shall remit 100 

3 percent of rebates, fees, alternative discounts, and 

4 all other remuneration received from a pharma5 ceutical manufacturer, distributor or any other third 

6 party, that are related to utilization of drugs under 

7 such health plan or health insurance coverage, to the 

8 group health plan. 

9 ‘‘(2) FORM AND MANNER OF REMITTANCE.— 

10 Such rebates, fees, alternative discounts, and other 

11 remuneration shall be— 

12 ‘‘(A) remitted to the group health plan in 

13 a timely fashion after the period for which such 

14 rebates, fees, or other remuneration is cal15 culated, and in no case later than 90 days after 

16 the end of such period; 

17 ‘‘(B) fully disclosed and enumerated to the 

18 group health plan sponsor, as described in 

19 (b)(1); 

20 ‘‘(C) available for audit by the plan spon21 sor, or a third party designated by a plan spon22 sor no less than once per plan year; and 

23 ‘‘(D) returned to the issuer or entity pro24 viding pharmaceutical benefit management 

25 services by the group health plan if audits by 


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1 such issuer or entity indicate that the amounts 

2 received are incorrect after such amounts have 

3 been paid to the group health plan. 

4 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A phar5 macy benefits manager, a third-party administrator 

6 of a group health plan, a health insurance issuer of7 fering group health insurance coverage, or an entity 

8 providing pharmacy benefits management services 

9 under such health plan or health insurance coverage 

10 shall make rebate contracts with drug manufactur11 ers available for audit by such plan sponsor or des12 ignated third party, subject to confidentiality agree13 ments to prevent re-disclosure of such contracts. 

14 ‘‘(e) ENFORCEMENT.— 

15 ‘‘(1) IN GENERAL.—The Secretary, in consulta16 tion with the Secretary of Labor and the Secretary 

17 of the Treasury, shall enforce this section. 

18 ‘‘(2) FAILURE TO PROVIDE TIMELY INFORMA19 TION.—A health insurance issuer or an entity pro20 viding pharmacy benefit management services that 

21 violates subsection (a), fails to provide information 

22 required under subsection (b), engages in spread 

23 pricing as defined in subsection (c), or fails to com24 ply with the requirements of subsection (d), or a 

25 drug manufacturer that fails to provide information 


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1 under subsection (b)(1)(A), in a timely manner shall 

2 be subject to a civil monetary penalty in the amount 

3 of $10,000 for each day during which such violation 

4 continues or such information is not disclosed or re5 ported. 

6 ‘‘(3) FALSE INFORMATION.—A health insurance 

7 issuer, entity providing pharmacy benefit manage8 ment services, or drug manufacturer that knowingly 

9 provides false information under this section shall be 

10 subject to a civil money penalty in an amount not 

11 to exceed $100,000 for each item of false informa12 tion. Such civil money penalty shall be in addition to 

13 other penalties as may be prescribed by law. 

14 ‘‘(4) PROCEDURE.—The provisions of section 

15 1128A of the Social Security Act, other than sub16 section (a) and (b) and the first sentence of sub17 section (c)(1) of such section shall apply to civil 

18 monetary penalties under this subsection in the 

19 same manner as such provisions apply to a penalty 

20 or proceeding under section 1128A of the Social Se21 curity Act. 

22 ‘‘(5) SAFE HARBOR.—The Secretary may waive 

23 penalties under paragraph (2), or extend the period 

24 of time for compliance with a requirement of this 

25 section, for an entity in violation of this section that 


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1 has made a good-faith effort to comply with this sec2 tion. 

3 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec4 tion shall be construed to prohibit payments to entities 

5 offering pharmacy benefits management services for bona 

6 fide services using a fee structure not contemplated by this 

7 section, provided that such fees are transparent to group 

8 health plans and health insurance issuers. 

9 ‘‘(g) DEFINITIONS.—In this section— 

10 ‘‘(1) the term ‘similarly situated pharmacy’ 

11 means, with respect to a particular pharmacy, an12 other pharmacy that is approximately the same size 

13 (as measured by the number of prescription drugs 

14 dispensed), and that serves patients in the same geo15 graphical area, whether through physical locations or 

16 mail order; and 

17 ‘‘(2) the term ‘wholesale acquisition cost’ has 

18 the meaning given such term in section 

19 1847A(c)(6)(B) of the Social Security Act.’’. 

20 SEC. 365. STUDY BY COMPTROLLER GENERAL OF UNITED 

21 STATES. 

22 (a) IN GENERAL.—The Comptroller General of the 

23 United States (referred to in this section as the ‘‘Comp24 troller General’’) shall, in consultation with appropriate 


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1 stakeholders, conduct a study on the role of pharmacy 

2 benefit managers. 

3 (b) PERMISSIBLE EXAMINATION.—In conducting the 

4 study required under subsection (a), the Comptroller Gen5 eral may examine various qualitative and quantitative as6 pects of the role of pharmacy benefit managers, such as 

7 the following: 

8 (1) The role that pharmacy benefit managers 

9 play in the pharmaceutical supply chain. 

10 (2) The state of competition among pharmacy 

11 benefit managers, including the market share for the 

12 Nation’s largest pharmacy benefit managers. 

13 (3) The use of rebates and fees by pharmacy 

14 benefit managers, including— 

15 (A) the extent to which rebates are passed 

16 on to health plans and whether such rebates are 

17 passed on to individuals enrolled in such plans; 

18 (B) the extent to which rebates are kept by 

19 such pharmacy benefit managers; and 

20 (C) the role of any fees charged by such 

21 pharmacy benefit managers. 

22 (4) Whether pharmacy benefit managers struc23 ture their formularies in favor of high-rebate pre24 scription drugs over lower-cost, lower-rebate alter25 natives. 


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1 (5) The average prior authorization approval 

2 time for pharmacy benefit managers. 

3 (6) Factors affecting the use of step therapy by 

4 pharmacy benefit managers. 

5 (c) REPORT.—Not later than 3 years after the date 

6 of enactment of this Act, the Comptroller General shall 

7 submit to the Secretary of Health and Human Services, 

8 the Committee on Health, Education, Labor, and Pen9 sions of the Senate, and the Committee on Energy and 

10 Commerce of the House of Representatives a report con11 taining the results of the study conducted under sub12 section (a), including policy recommendations. 

13 Subtitle E—Medicare and Medicaid 

14 Prescription Drug Reforms 

15 SEC. 371. MEDICARE PART D MODERNIZATION REDESIGN. 

16 (a) BENEFIT STRUCTURE REDESIGN.—Section 

17 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w– 

18 102(b)) is amended— 

19 (1) in paragraph (2)— 

20 (A) in subparagraph (A), in the matter 

21 preceding clause (i), by inserting ‘‘for a year 

22 preceding 2025 and for costs above the annual 

23 deductible specified in paragraph (1) and up to 

24 the annual out-of-pocket threshold specified in 


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1 paragraph (4)(B) for 2025 and each subsequent 

2 year’’ after ‘‘paragraph (3)’’; 

3 (B) in subparagraph (C)— 

4 (i) in clause (i), in the matter pre5 ceding subclause (I), by inserting ‘‘for a 

6 year preceding 2025,’’ after ‘‘paragraph 

7 (4),’’; and 

8 (ii) in clause (ii)(III), by striking 

9 ‘‘and each subsequent year’’ and inserting 

10 ‘‘, 2021, 2022, 2023, and 2024’’; and 

11 (C) in subparagraph (D)— 

12 (i) in clause (i)— 

13 (I) in the matter preceding sub14 clause (I), by inserting ‘‘for a year 

15 preceding 2025,’’ after ‘‘paragraph 

16 (4),’’; and 

17 (II) in subclause (I)(bb), by 

18 striking ‘‘a year after 2018’’ and in19 serting ‘‘each of years 2018 through 

20 2024’’; and 

21 (ii) in clause (ii)(V), by striking 

22 ‘‘2019 and each subsequent year’’ and in23 serting ‘‘each of years 2019 through 

24 2024’’; 

25 (2) in paragraph (3)(A)— 


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1 (A) in the matter preceding clause (i), by 

2 inserting ‘‘for a year preceding 2025,’’ after 

3 ‘‘and (4),’’; and 

4 (B) in clause (ii), by striking ‘‘for a subse5 quent year’’ and inserting ‘‘for each of years 

6 2007 through 2024’’; 

7 (3) in paragraph (4)— 

8 (A) in subparagraph (A)— 

9 (i) in clause (i)— 

10 (I) by redesignating subclauses 

11 (I) and (II) as items (aa) and (bb), 

12 respectively, and indenting appro13 priately; 

14 (II) in the matter preceding item 

15 (aa), as redesignated by subclause (I), 

16 by striking ‘‘is equal to the greater 

17 of—’’ and inserting ‘‘is equal to— 

18 ‘‘(I) for a year preceding 2025, 

19 the greater of—’’; 

20 (III) by striking the period at the 

21 end of item (bb), as redesignated by 

22 subclause (I), and inserting ‘‘; and’’; 

23 and 

24 (IV) by adding at the end the fol25 lowing: 


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1 ‘‘(II) for 2025 and each suc2 ceeding year, $0.’’; and 

3 (ii) in clause (ii)— 

4 (I) by striking ‘‘clause (i)(I)’’ and 

5 inserting ‘‘clause (i)(I)(aa)’’; and 

6 (II) by adding at the end the fol7 lowing new sentence: ‘‘The Secretary 

8 shall continue to calculate the dollar 

9 amounts specified in clause (i)(I)(aa), 

10 including with the adjustment under 

11 this clause, after 2024 for purposes of 

12 section 1860D–14(a)(1)(D)(iii).’’; 

13 (B) in subparagraph (B)— 

14 (i) in clause (i)— 

15 (I) in subclause (V), by striking 

16 ‘‘or’’ at the end; 

17 (II) in subclause (VI)— 

18 (aa) by striking ‘‘for a sub19 sequent year’’ and inserting ‘‘for 

20 2021 through 2024’’; and 

21 (bb) by striking the period 

22 at the end and inserting a semi23 colon; and 

24 (III) by adding at the end the 

25 following new subclauses: 


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1 ‘‘(VII) for 2025, is equal to 

2 $3,100; or 

3 ‘‘(VIII) for a subsequent year, is 

4 equal to the amount specified in this 

5 subparagraph for the previous year, 

6 increased by the annual percentage in7 crease described in paragraph (6) for 

8 the year involved.’’; and 

9 (ii) in clause (ii), by striking ‘‘clause 

10 (i)(II)’’ and inserting ‘‘clause (i)’’; 

11 (C) in subparagraph (C)(i), by striking 

12 ‘‘and for amounts’’ and inserting ‘‘and for a 

13 year preceding 2025 for amounts’’; and 

14 (D) in subparagraph (E), by striking ‘‘In 

15 applying’’ and inserting ‘‘For each of 2011 

16 through 2024, in applying’’. 

17 (b) REDUCTION IN BENEFICIARY COINSURANCE.— 

18 (1) IN GENERAL.—Section 1860D–2(b)(2)(A) 

19 of the Social Security Act (42 U.S.C. 1395w– 

20 102(b)(2)(A)), as amended by subsection (a), is 

21 amended— 

22 (A) by redesignating clauses (i) and (ii) as 

23 subclauses (I) and (II) and moving such sub24 clauses 2 ems to the right; 


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1 (B) by striking ‘‘25 PERCENT COINSUR2 ANCE.—Subject to’’ and inserting ‘‘COINSUR3 ANCE.— 

4 ‘‘(i) IN GENERAL.—Subject to’’; 

5 (C) in each of subclauses (I) and (II), as 

6 redesignated by subparagraph (A), by striking 

7 ‘‘25 percent’’ and inserting ‘‘the applicable per8 centage (as defined in clause (ii))’’; and 

9 (D) by adding at the end the following new 

10 clause: 

11 ‘‘(ii) APPLICABLE PERCENTAGE DE12 FINED.—For purposes of clause (i), the 

13 term ‘applicable percentage’ means— 

14 ‘‘(I) for a year preceding 2025, 

15 25 percent; and 

16 ‘‘(II) for 2025 and each subse17 quent year, 20 percent.’’. 

18 (2) CONFORMING AMENDMENT.—Section 

19 1860D–14(a)(2)(D) of the Social Security Act (42 

20 U.S.C. 1395w–114(a)(2)(D)) is amended by striking 

21 ‘‘25 percent’’ and inserting ‘‘the applicable percent22 age’’. 

23 (c) DECREASING REINSURANCE PAYMENT

24 AMOUNT.—Section 1860D–15(b) of the Social Security 

25 Act (42 U.S.C. 1395w–115(b)) is amended— 


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1 (1) in paragraph (1)— 

2 (A) by striking ‘‘equal to 80 percent’’ and 

3 inserting ‘‘equal to— 

4 ‘‘(A) for a year preceding 2025, 80 per5 cent’’; 

6 (B) in subparagraph (A), as added by 

7 paragraph (1), by striking the period at the end 

8 and inserting ‘‘; and’’; and 

9 (C) by adding at the end the following new 

10 subparagraph: 

11 ‘‘(B) for 2025 and each subsequent year, 

12 the sum of— 

13 ‘‘(i) an amount equal to the applicable 

14 percentage specified in paragraph (5)(A) of 

15 such allowable reinsurance costs attrib16 utable to that portion of gross prescription 

17 drug costs as specified in paragraph (3) in18 curred in the coverage year after such indi19 vidual has incurred costs that exceed the 

20 annual out-of-pocket threshold specified in 

21 section 1860D–2(b)(4)(B) with respect to 

22 applicable drugs (as defined in section 

23 1860D–14B(g)(2)); and 

24 ‘‘(ii) an amount equal to the applica25 ble percentage specified in paragraph 


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1 (5)(B) of allowable reinsurance costs at2 tributable to that portion of gross prescrip3 tion drug costs as specified in paragraph 

4 (3) incurred in the coverage year after 

5 such individual has incurred costs that ex6 ceed the annual out-of-pocket threshold 

7 specified in section 1860D–2(b)(4)(B) with 

8 respect to covered part D drugs that are 

9 not applicable drugs (as so defined).’’; and 

10 (2) by adding at the end the following new 

11 paragraph: 

12 ‘‘(5) APPLICABLE PERCENTAGE SPECIFIED.— 

13 For purposes of paragraph (1)(B), the applicable 

14 percentage specified in this paragraph is— 

15 ‘‘(A) with respect to applicable drugs (as 

16 defined in section 1860D–14B(g)(2))— 

17 ‘‘(i) for 2025, 60 percent; 

18 ‘‘(ii) for 2026, 40 percent; and 

19 ‘‘(iii) for 2027 and each subsequent 

20 year, 20 percent; and 

21 ‘‘(B) with respect to covered part D drugs 

22 that are not applicable drugs (as so defined)— 

23 ‘‘(i) for 2025, 80 percent; 

24 ‘‘(ii) for 2026, 60 percent; and 


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1 ‘‘(iii) for 2027 and each subsequent 

2 year, 40 percent.’’. 

3 (d) MANUFACTURER DISCOUNT PROGRAM DURING

4 INITIAL AND CATASTROPHIC PHASES OF COVERAGE.— 

5 (1) IN GENERAL.—Part D of title XVIII of the 

6 Social Security Act is amended by inserting after 

7 section 1860D–14A (42 U.S.C. 1495w–114) the fol8 lowing new section: 

9 ‘‘SEC. 1860D–14B. MANUFACTURER DISCOUNT PROGRAM. 

10 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab11 lish a manufacturer discount program (in this section re12 ferred to as the ‘program’). Under the program, the Sec13 retary shall enter into agreements described in subsection 

14 (b) with manufacturers and provide for the performance 

15 of the duties described in subsection (c). The Secretary 

16 shall establish a model agreement for use under the pro17 gram by not later than January 1, 2025, in consultation 

18 with manufacturers, and allow for comment on such model 

19 agreement. 

20 ‘‘(b) TERMS OF AGREEMENT.— 

21 ‘‘(1) IN GENERAL.— 

22 ‘‘(A) AGREEMENT.—An agreement under 

23 this section shall require the manufacturer to 

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1 ufacturer that are dispensed on or after Janu2 ary 1, 2025. 

3 ‘‘(B) PROVISION OF DISCOUNTED PRICES

4 AT THE POINT-OF-SALE.—The discounted prices 

5 described in subparagraph (A) shall be provided 

6 to the applicable beneficiary at the pharmacy or 

7 by the mail order service at the point-of-sale of 

8 an applicable drug. 

9 ‘‘(2) PROVISION OF APPROPRIATE DATA.—Each 

10 manufacturer with an agreement in effect under this 

11 section shall collect and have available appropriate 

12 data, as determined by the Secretary, to ensure that 

13 it can demonstrate to the Secretary compliance with 

14 the requirements under the program. 

15 ‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR

16 ADMINISTRATION OF PROGRAM.—Each manufac17 turer with an agreement in effect under this section 

18 shall comply with requirements imposed by the Sec19 retary or a third party with a contract under sub20 section (d)(3), as applicable, for purposes of admin21 istering the program, including any determination 

22 under subparagraph (A) of subsection (c)(1) or pro23 cedures established under such subsection (c)(1). 

24 ‘‘(4) LENGTH OF AGREEMENT.— 


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1 ‘‘(A) IN GENERAL.—An agreement under 

2 this section shall be effective for an initial pe3 riod of not less than 12 months and shall be 

4 automatically renewed for a period of not less 

5 than 1 year unless terminated under subpara6 graph (B). 

7 ‘‘(B) TERMINATION.— 

8 ‘‘(i) BY THE SECRETARY.—The Sec9 retary may provide for termination of an 

10 agreement under this section for a knowing 

11 and willful violation of the requirements of 

12 the agreement or other good cause shown. 

13 Such termination shall not be effective ear14 lier than 30 days after the date of notice 

15 to the manufacturer of such termination. 

16 The Secretary shall provide, upon request, 

17 a manufacturer with a hearing concerning 

18 such a termination, and such hearing shall 

19 take place prior to the effective date of the 

20 termination with sufficient time for such 

21 effective date to be repealed if the Sec22 retary determines appropriate. 

23 ‘‘(ii) BY A MANUFACTURER.—A man24 ufacturer may terminate an agreement 

25 under this section for any reason. Any 


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1 such termination shall be effective, with re2 spect to a plan year— 

3 ‘‘(I) if the termination occurs be4 fore January 30 of a plan year, as of 

5 the day after the end of the plan year; 

6 and 

7 ‘‘(II) if the termination occurs on 

8 or after January 30 of a plan year, as 

9 of the day after the end of the suc10 ceeding plan year. 

11 ‘‘(iii) EFFECTIVENESS OF TERMI12 NATION.—Any termination under this sub13 paragraph shall not affect discounts for 

14 applicable drugs of the manufacturer that 

15 are due under the agreement before the ef16 fective date of its termination. 

17 ‘‘(iv) NOTICE TO THIRD PARTY.—The 

18 Secretary shall provide notice of such ter19 mination to a third party with a contract 

20 under subsection (d)(3) within not less 

21 than 30 days before the effective date of 

22 such termination. 

23 ‘‘(5) EFFECTIVE DATE OF AGREEMENT.—An 

24 agreement under this section shall take effect on a 


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1 date determined appropriate by the Secretary, which 

2 may be at the start of a calendar quarter. 

3 ‘‘(c) DUTIES DESCRIBED.—The duties described in 

4 this subsection are the following: 

5 ‘‘(1) ADMINISTRATION OF PROGRAM.—Admin6 istering the program, including— 

7 ‘‘(A) the determination of the amount of 

8 the discounted price of an applicable drug of a 

9 manufacturer; 

10 ‘‘(B) the establishment of procedures 

11 under which discounted prices are provided to 

12 applicable beneficiaries at pharmacies or by 

13 mail order service at the point-of-sale of an ap14 plicable drug; 

15 ‘‘(C) the establishment of procedures to 

16 ensure that, not later than the applicable num17 ber of calendar days after the dispensing of an 

18 applicable drug by a pharmacy or mail order 

19 service, the pharmacy or mail order service is 

20 reimbursed for an amount equal to the dif21 ference between— 

22 ‘‘(i) the negotiated price of the appli23 cable drug; and 

24 ‘‘(ii) the discounted price of the appli25 cable drug; 


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1 ‘‘(D) the establishment of procedures to 

2 ensure that the discounted price for an applica3 ble drug under this section is applied before any 

4 coverage or financial assistance under other 

5 health benefit plans or programs that provide 

6 coverage or financial assistance for the pur7 chase or provision of prescription drug coverage 

8 on behalf of applicable beneficiaries as the Sec9 retary may specify; and 

10 ‘‘(E) providing a reasonable dispute resolu11 tion mechanism to resolve disagreements be12 tween manufacturers, applicable beneficiaries, 

13 and the third party with a contract under sub14 section (d)(3). 

15 ‘‘(2) MONITORING COMPLIANCE.— 

16 ‘‘(A) IN GENERAL.—The Secretary shall 

17 monitor compliance by a manufacturer with the 

18 terms of an agreement under this section. 

19 ‘‘(B) NOTIFICATION.—If a third party 

20 with a contract under subsection (d)(3) deter21 mines that the manufacturer is not in compli22 ance with such agreement, the third party shall 

23 notify the Secretary of such noncompliance for 

24 appropriate enforcement under subsection (e). 


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1 ‘‘(3) COLLECTION OF DATA FROM PRESCRIP2 TION DRUG PLANS AND MA–PD PLANS.—The Sec3 retary may collect appropriate data from prescrip4 tion drug plans and MA–PD plans in a timeframe 

5 that allows for discounted prices to be provided for 

6 applicable drugs under this section. 

7 ‘‘(d) ADMINISTRATION.— 

8 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

9 the Secretary shall provide for the implementation of 

10 this section, including the performance of the duties 

11 described in subsection (c). 

12 ‘‘(2) LIMITATION.—In providing for the imple13 mentation of this section, the Secretary shall not re14 ceive or distribute any funds of a manufacturer 

15 under the program. 

16 ‘‘(3) CONTRACT WITH THIRD PARTIES.—The 

17 Secretary shall enter into a contract with 1 or more 

18 third parties to administer the requirements estab19 lished by the Secretary in order to carry out this 

20 section. At a minimum, the contract with a third 

21 party under the preceding sentence shall require 

22 that the third party— 

23 ‘‘(A) receive and transmit information be24 tween the Secretary, manufacturers, and other 


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1 individuals or entities the Secretary determines 

2 appropriate; 

3 ‘‘(B) receive, distribute, or facilitate the 

4 distribution of funds of manufacturers to ap5 propriate individuals or entities in order to 

6 meet the obligations of manufacturers under 

7 agreements under this section; 

8 ‘‘(C) provide adequate and timely informa9 tion to manufacturers, consistent with the 

10 agreement with the manufacturer under this 

11 section, as necessary for the manufacturer to 

12 fulfill its obligations under this section; and 

13 ‘‘(D) permit manufacturers to conduct 

14 periodic audits, directly or through contracts, of 

15 the data and information used by the third 

16 party to determine discounts for applicable 

17 drugs of the manufacturer under the program. 

18 ‘‘(4) PERFORMANCE REQUIREMENTS.—The 

19 Secretary shall establish performance requirements 

20 for a third party with a contract under paragraph 

21 (3) and safeguards to protect the independence and 

22 integrity of the activities carried out by the third 

23 party under the program under this section. 


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1 ‘‘(5) ADMINISTRATION.—Chapter 35 of title 44, 

2 United States Code, shall not apply to the program 

3 under this section. 

4 ‘‘(6) FUNDING.—For purposes of carrying out 

5 this section, the Secretary shall provide for the 

6 transfer, from the Federal Supplementary Medical 

7 Insurance Trust Fund under section 1841 to the 

8 Centers for Medicare & Medicaid Services Program 

9 Management Account, of $4,000,000 for each of fis10 cal years 2024 through 2027, to remain available 

11 until expended.’’. 

12 ‘‘(e) ENFORCEMENT.— 

13 ‘‘(1) AUDITS.—Each manufacturer with an 

14 agreement in effect under this section shall be sub15 ject to periodic audit by the Secretary. 

16 ‘‘(2) CIVIL MONEY PENALTY.— 

17 ‘‘(A) IN GENERAL.—The Secretary shall 

18 impose a civil money penalty on a manufacturer 

19 that fails to provide applicable beneficiaries dis20 counts for applicable drugs of the manufacturer 

21 in accordance with such agreement for each 

22 such failure in an amount the Secretary deter23 mines is commensurate with the sum of— 

24 ‘‘(i) the amount that the manufac25 turer would have paid with respect to such 


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1 discounts under the agreement, which will 

2 then be used to pay the discounts which 

3 the manufacturer had failed to provide; 

4 and 

5 ‘‘(ii) 25 percent of such amount. 

6 ‘‘(B) APPLICATION.—The provisions of 

7 section 1128A (other than subsections (a) and 

8 (b)) shall apply to a civil money penalty under 

9 this paragraph in the same manner as such 

10 provisions apply to a penalty or proceeding 

11 under section 1128A(a). 

12 ‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF

13 OTHER COVERED PART D DRUGS.—Nothing in this sec14 tion shall prevent an applicable beneficiary from pur15 chasing a covered part D drug that is not an applicable 

16 drug (including a generic drug or a drug that is not on 

17 the formulary of the prescription drug plan or MA–PD 

18 plan that the applicable beneficiary is enrolled in). 

19 ‘‘(g) DEFINITIONS.—In this section: 

20 ‘‘(1) APPLICABLE BENEFICIARY.—The term 

21 ‘applicable beneficiary’ means an individual who, on 

22 the date of dispensing a covered part D drug— 

23 ‘‘(A) is enrolled in a prescription drug plan 

24 or an MA–PD plan; 


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1 ‘‘(B) is not enrolled in a qualified retiree 

2 prescription drug plan; and 

3 ‘‘(C) has incurred costs for covered part D 

4 drugs in the year that are above the annual de5 ductible specified in section 1860D–2(b)(1) for 

6 such year. 

7 ‘‘(2) APPLICABLE DRUG.—The term ‘applicable 

8 drug’ means, with respect to an applicable bene9 ficiary, a covered part D drug— 

10 ‘‘(A) approved under a new drug applica11 tion under section 505(c) of the Federal Food, 

12 Drug, and Cosmetic Act or, in the case of a bio13 logic product, licensed under section 351 of the 

14 Public Health Service Act (including a product 

15 licensed under subsection (k) of such section 

16 351); and 

17 ‘‘(B)(i) if the PDP sponsor of the prescrip18 tion drug plan or the MA organization offering 

19 the MA–PD plan uses a formulary, which is on 

20 the formulary of the prescription drug plan or 

21 MA–PD plan that the applicable beneficiary is 

22 enrolled in; 

23 ‘‘(ii) if the PDP sponsor of the prescrip24 tion drug plan or the MA organization offering 

25 the MA–PD plan does not use a formulary, for 


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1 which benefits are available under the prescrip2 tion drug plan or MA–PD plan that the appli3 cable beneficiary is enrolled in; or 

4 ‘‘(iii) is provided through an exception or 

5 appeal. 

6 ‘‘(3) APPLICABLE NUMBER OF CALENDAR

7 DAYS.—The term ‘applicable number of calendar 

8 days’ means— 

9 ‘‘(A) with respect to claims for reimburse10 ment submitted electronically, 14 days; and 

11 ‘‘(B) with respect to claims for reimburse12 ment submitted otherwise, 30 days. 

13 ‘‘(4) DISCOUNTED PRICE.— 

14 ‘‘(A) IN GENERAL.—The term ‘discounted 

15 price’ means— 

16 ‘‘(i) with respect to an applicable drug 

17 dispensed for an applicable beneficiary who 

18 has incurred costs that are below the an19 nual out-of-pocket threshold specified in 

20 section 1860D–2(b)(4)(B) for the year, 93 

21 percent of the negotiated price of the ap22 plicable drug of a manufacturer; and 

23 ‘‘(ii) with respect to an applicable 

24 drug dispensed for an applicable bene25 ficiary who has incurred costs for covered 


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1 part D drugs in the year that are equal to 

2 or exceed the annual out-of-pocket thresh3 old specified in section 1860D–2(b)(4)(B) 

4 for the year, 86 percent of the negotiated 

5 price of the applicable drug of a manufac6 turer. 

7 ‘‘(B) CLARIFICATION.—Nothing in this 

8 section shall be construed as affecting the re9 sponsibility of an applicable beneficiary for pay10 ment of a dispensing fee for an applicable drug. 

11 ‘‘(C) CLARIFICATION FOR CERTAIN

12 CLAIMS.—With respect to the amount of the ne13 gotiated price of an individual claim for an ap14 plicable drug with respect to an applicable bene15 ficiary, the manufacturer of the applicable drug 

16 shall provide— 

17 ‘‘(i) the discounted price under clause 

18 (i) of subparagraph (A) only on the portion 

19 of the negotiated price of the applicable 

20 drug that falls above the deductible speci21 fied in section 1860D–2(b)(1) for the year 

22 and below the annual out-of-pocket thresh23 old specified in section 1860D–2(b)(4)(B) 

24 for the year; and 


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1 ‘‘(ii) the discounted price under clause 

2 (ii) of subparagraph (A) only on the por3 tion of the negotiated price of the applica4 ble drug that falls at or above such annual 

5 out-of-pocket threshold. 

6 ‘‘(5) MANUFACTURER.—The term ‘manufac7 turer’ means any entity which is engaged in the pro8 duction, preparation, propagation, compounding, 

9 conversion, or processing of prescription drug prod10 ucts, either directly or indirectly by extraction from 

11 substances of natural origin, or independently by 

12 means of chemical synthesis, or by a combination of 

13 extraction and chemical synthesis. Such term does 

14 not include a wholesale distributor of drugs or a re15 tail pharmacy licensed under State law. 

16 ‘‘(6) NEGOTIATED PRICE.—The term ‘nego17 tiated price’ has the meaning given such term in sec18 tion 1860D–2(d)(1)(B), except that such negotiated 

19 price shall not include any dispensing fee for the ap20 plicable drug. 

21 ‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG

22 PLAN.—The term ‘qualified retiree prescription drug 

23 plan’ has the meaning given such term in section 

24 1860D–22(a)(2).’’. 


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1 (2) SUNSET OF MEDICARE COVERAGE GAP DIS2 COUNT PROGRAM.—Section 1860D–14A of the So3 cial Security Act (42 U.S.C. 1395–114a) is amend4 ed— 

5 (A) in subsection (a), in the first sentence, 

6 by striking ‘‘The Secretary’’ and inserting 

7 ‘‘Subject to subsection (h), the Secretary’’; and 

8 (B) by adding at the end the following new 

9 subsection: 

10 ‘‘(h) SUNSET OF PROGRAM.— 

11 ‘‘(1) IN GENERAL.—The program shall not 

12 apply to applicable drugs dispensed on or after Jan13 uary 1, 2025, and, subject to paragraph (2), agree14 ments under this section shall be terminated as of 

15 such date. 

16 ‘‘(2) CONTINUED APPLICATION FOR APPLICA17 BLE DRUGS DISPENSED PRIOR TO SUNSET.—The 

18 provisions of this section (including all responsibil19 ities and duties) shall continue to apply after Janu20 ary 1, 2025, with respect to applicable drugs dis21 pensed prior to such date.’’. 

22 (3) INCLUSION OF ACTUARIAL VALUE OF MANU23 FACTURER DISCOUNTS IN BIDS.—Section 1860D–11 

24 of the Social Security Act (42 U.S.C. 1395w–111) 

25 is amended— 


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1 (A) in subsection (b)(2)(C)(iii)— 

2 (i) by striking ‘‘assumptions regarding 

3 the reinsurance’’ and inserting ‘‘assump4 tions regarding— 

5 ‘‘(I) the reinsurance’’; and 

6 (ii) by adding at the end the fol7 lowing: 

8 ‘‘(II) for 2025 and each subse9 quent year, the manufacturer dis10 counts provided under section 1860D– 

11 14B subtracted from the actuarial 

12 value to produce such bid; and’’; and 

13 (B) in subsection (c)(1)(C)— 

14 (i) by striking ‘‘an actuarial valuation 

15 of the reinsurance’’ and inserting ‘‘an ac16 tuarial valuation of— 

17 ‘‘(i) the reinsurance’’; 

18 (ii) in clause (i), as added by clause 

19 (i) of this subparagraph, by adding ‘‘and’’ 

20 at the end; and 

21 (iii) by adding at the end the fol22 lowing: 

23 ‘‘(ii) for 2025 and each subsequent 

24 year, the manufacturer discounts provided 

25 under section 1860D–14B;’’. 


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1 (4) CLARIFICATION REGARDING EXCLUSION OF

2 MANUFACTURER DISCOUNTS FROM TROOP.—Section 

3 1860D–2(b)(4) of the Social Security Act (42 

4 U.S.C. 1395w–102(b)(4)) is amended— 

5 (A) in subparagraph (C), by inserting ‘‘and 

6 subject to subparagraph (F)’’ after ‘‘subpara7 graph (E)’’; and 

8 (B) by adding at the end the following new 

9 subparagraph: 

10 ‘‘(F) CLARIFICATION REGARDING EXCLU11 SION OF MANUFACTURER DISCOUNTS.—In ap12 plying subparagraph (A), incurred costs shall 

13 not include any manufacturer discounts pro14 vided under section 1860D–14B.’’. 

15 (e) DETERMINATION OF ALLOWABLE REINSURANCE

16 COSTS.—Section 1860D–15(b) of the Social Security Act 

17 (42 U.S.C. 1395w–115(b)) is amended— 

18 (1) in paragraph (2)— 

19 (A) by striking ‘‘COSTS.—For purposes’’ 

20 and inserting ‘‘COSTS.— 

21 ‘‘(A) IN GENERAL.—Subject to subpara22 graph (B), for purposes’’; and 

23 (B) by adding at the end the following new 

24 subparagraph: 


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1 ‘‘(B) INCLUSION OF MANUFACTURER DIS2 COUNTS ON APPLICABLE DRUGS.—For purposes 

3 of applying subparagraph (A), the term ‘allow4 able reinsurance costs’ shall include the portion 

5 of the negotiated price (as defined in section 

6 1860D–14B(g)(6)) of an applicable drug (as 

7 defined in section 1860D–14B(g)(2)) that was 

8 paid by a manufacturer under the manufacturer 

9 discount program under section 1860D–14B.’’; 

10 and 

11 (2) in paragraph (3)— 

12 (A) in the first sentence, by striking ‘‘For 

13 purposes’’ and inserting ‘‘Subject to paragraph 

14 (2)(B), for purposes’’; and 

15 (B) in the second sentence, by inserting 

16 ‘‘or, in the case of an applicable drug, by a 

17 manufacturer’’ after ‘‘by the individual or 

18 under the plan’’. 

19 (f) UPDATING RISK ADJUSTMENT METHODOLOGIES

20 TO ACCOUNT FOR PART D MODERNIZATION REDE21 SIGN.—Section 1860D–15(c) of the Social Security Act 

22 (42 U.S.C. 1395w–115(c)) is amended by adding at the 

23 end the following new paragraph: 

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1 TION REDESIGN.—The Secretary shall update the 

2 risk adjustment methodologies used to adjust bid 

3 amounts pursuant to this subsection as appropriate 

4 to take into account changes in benefits under this 

5 part pursuant to the amendments made by section 

6 371 of the Fair Care Act of 2024.’’. 

7 (g) CONDITIONS FOR COVERAGE OF DRUGS UNDER

8 THIS PART.—Section 1860D–43 of the Social Security 

9 Act (42 U.S.C. 1395w–153) is amended— 

10 (1) in subsection (a)— 

11 (A) in paragraph (2), by striking ‘‘and’’ at 

12 the end; 

13 (B) in paragraph (3), by striking the pe14 riod at the end and inserting a semicolon; and 

15 (C) by adding at the end the following new 

16 paragraphs: 

17 ‘‘(4) participate in the manufacturer discount 

18 program under section 1860D–14B; 

19 ‘‘(5) have entered into and have in effect an 

20 agreement described in subsection (b) of such sec21 tion 1860D–14B with the Secretary; and 

22 ‘‘(6) have entered into and have in effect, under 

23 terms and conditions specified by the Secretary, a 

24 contract with a third party that the Secretary has 


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1 entered into a contract with under subsection (d)(3) 

2 of such section 1860D–14B.’’; 

3 (2) by striking subsection (b) and inserting the 

4 following: 

5 ‘‘(b) EFFECTIVE DATE.—Paragraphs (1) through (3) 

6 of subsection (a) shall apply to covered part D drugs dis7 pensed under this part on or after January 1, 2011, and 

8 before January 1, 2025, and paragraphs (4) through (6) 

9 of such subsection shall apply to covered part D drugs 

10 dispensed on or after January 1, 2025.’’; and 

11 (3) in subsection (c), by striking paragraph (2) 

12 and inserting the following: 

13 ‘‘(2) the Secretary determines that in the period 

14 beginning on January 1, 2011, and ending on De15 cember 31, 2011 (with respect to paragraphs (1) 

16 through (3) of subsection (a)), or the period begin17 ning on January 1, 2025, and ending December 31, 

18 2025 (with respect to paragraphs (4) through (6) of 

19 such subsection), there were extenuating cir20 cumstances.’’. 

21 (h) CONFORMING AMENDMENTS.— 

22 (1) Section 1860D–2 of the Social Security Act 

23 (42 U.S.C. 1395w–102) is amended— 

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1 ing ‘‘or for a year preceding 2025 an increase 

2 in the initial’’; 

3 (B) in subsection (c)(1)(C)— 

4 (i) in the subparagraph heading, by 

5 striking ‘‘AT INITIAL COVERAGE LIMIT’’; 

6 and 

7 (ii) by inserting ‘‘for a year preceding 

8 2025 or the annual out-of-pocket threshold 

9 specified in subsection (b)(4)(B) for the 

10 year for 2025 and each subsequent year’’ 

11 after ‘‘subsection (b)(3) for the year’’ each 

12 place it appears; and 

13 (C) in subsection (d)(1)(A), by striking ‘‘or 

14 an initial’’ and inserting ‘‘or for a year pre15 ceding 2025 an initial’’. 

16 (2) Section 1860D–4(a)(4)(B)(i) of the Social 

17 Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) is 

18 amended by striking ‘‘the initial’’ and inserting ‘‘for 

19 a year preceding 2025, the initial’’. 

20 (3) Section 1860D–14(a) of the Social Security 

21 Act (42 U.S.C. 1395w–114(a)) is amended— 

22 (A) in paragraph (1)— 

23 (i) in subparagraph (C), by striking 

24 ‘‘The continuation’’ and inserting ‘‘For a 

25 year preceding 2025, the continuation’’; 


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1 (ii) in subparagraph (D)(iii), by strik2 ing ‘‘1860D–2(b)(4)(A)(i)(I)’’ and insert3 ing ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’; and 

4 (iii) in subparagraph (E), by striking 

5 ‘‘The elimination’’ and inserting ‘‘For a 

6 year preceding 2025, the elimination’’; and 

7 (B) in paragraph (2)— 

8 (i) in subparagraph (C), by striking 

9 ‘‘The continuation’’ and inserting ‘‘For a 

10 year preceding 2025, the continuation’’; 

11 and 

12 (ii) in subparagraph (E)— 

13 (I) by inserting ‘‘for a year pre14 ceding 2025,’’ after ‘‘subsection (c)’’; 

15 and 

16 (II) by striking ‘‘1860D– 

17 2(b)(4)(A)(i)(I)’’ and inserting 

18 ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’. 

19 (4) Section 1860D–21(d)(7) of the Social Secu20 rity Act (42 U.S.C. 1395w–131(d)(7)) is amended 

21 by striking ‘‘section 1860D–2(b)(B)(4)(B)(i)’’ and 

22 inserting ‘‘section 1860D–2(b)(B)(4)(C)(i)’’. 

23 (5) Section 1860D–22(a)(2)(A) of the Social 

24 Security Act (42 U.S.C. 1395w–132(a)(2)(A)) is 

25 amended— 


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1 (A) by striking ‘‘the value of any discount’’ 

2 and inserting the following: ‘‘the value of— 

3 ‘‘(i) for years prior to 2025, any dis4 count’’; 

5 (B) in clause (i), as inserted by subpara6 graph (A) of this paragraph, by striking the pe7 riod at the end and inserting ‘‘; and’’; and 

8 (C) by adding at the end the following new 

9 clause: 

10 ‘‘(ii) for 2025 and each subsequent 

11 year, any discount provided pursuant to 

12 section 1860D–14B.’’. 

13 (6) Section 1860D–41(a)(6) of the Social Secu14 rity Act (42 U.S.C. 1395w–151(a)(6)) is amended— 

15 (A) by inserting ‘‘for a year before 2025’’ 

16 after ‘‘1860D–2(b)(3)’’; and 

17 (B) by inserting ‘‘for such year’’ before the 

18 period. 

19 (i) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to plan year 2025 and subsequent 

21 plan years. 


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1 SEC. 372. MAXIMUM MONTHLY CAP ON COST-SHARING PAY2 MENTS UNDER PRESCRIPTION DRUG PLANS 

3 AND MA–PD PLANS. 

4 (a) IN GENERAL.—Section 1860D–2(b) of the Social 

5 Security Act (42 U.S.C. 1395w–102(b)), as amended by 

6 section 121, is amended— 

7 (1) in paragraph (2)— 

8 (A) in subparagraph (A), by striking ‘‘and 

9 (D)’’ and inserting ‘‘, (D), and (E)’’; and 

10 (B) by adding at the end the following new 

11 subparagraph: 

12 ‘‘(E) MAXIMUM MONTHLY CAP ON COST13 SHARING PAYMENTS.— 

14 ‘‘(i) IN GENERAL.—For plan years be15 ginning on or after January 1, 2025, the 

16 Secretary shall, through notice and com17 ment rulemaking, establish a process under 

18 which each PDP sponsor offering a pre19 scription drug plan and each MA organiza20 tion offering an MA–PD plan shall provide 

21 to any enrollee, including an enrollee who 

22 is a subsidy eligible individual (as defined 

23 in paragraph (3) of section 1860D–14(a)), 

24 the option to elect with respect to a plan 

25 year to have their monthly cost-sharing 


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1 payments under the plan capped in accord2 ance with this subparagraph. 

3 ‘‘(ii) DETERMINATION OF MAXIMUM

4 MONTHLY CAP.—For each month in the 

5 plan year after an enrollee in a prescrip6 tion drug plan or an MA–PD plan has 

7 made an election pursuant to clause (i), 

8 the PDP sponsor or MA organization shall 

9 determine a maximum monthly cap (as de10 fined in clause (iv)) for such enrollee. 

11 ‘‘(iii) BENEFICIARY MONTHLY PAY12 MENTS.—With respect to an enrollee who 

13 has made an election pursuant to clause 

14 (i), for each month described in clause (ii), 

15 the PDP sponsor or MA organization shall 

16 bill such enrollee an amount (not to exceed 

17 the maximum monthly cap) for the out-of18 pocket costs of such enrollee in such 

19 month. 

20 ‘‘(iv) MAXIMUM MONTHLY CAP DE21 FINED.—In this subparagraph, the term 

22 ‘maximum monthly cap’ means, with re23 spect to an enrollee— 


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1 ‘‘(I) for the first month in which 

2 this subparagraph applies, an amount 

3 determined by calculating— 

4 ‘‘(aa) the annual out-of5 pocket threshold specified in 

6 paragraph (4)(B) minus the in7 curred costs of the enrollee as de8 scribed in paragraph (4)(C); di9 vided by 

10 ‘‘(bb) the number of months 

11 remaining in the plan year; and 

12 ‘‘(II) for a subsequent month, an 

13 amount determined by calculating— 

14 ‘‘(aa) the sum of any re15 maining out-of-pocket costs owed 

16 by the enrollee from a previous 

17 month that have not yet been 

18 billed to the enrollee and any ad19 ditional costs incurred by the en20 rollee; divided by 

21 ‘‘(bb) the number of months 

22 remaining in the plan year. 

23 ‘‘(v) ADDITIONAL REQUIREMENTS.— 

24 The following requirements shall apply 

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1 tion pursuant to clause (i) under this sub2 paragraph: 

3 ‘‘(I) SECRETARIAL RESPONSIBIL4 ITIES.—The Secretary shall provide 

5 information to part D eligible individ6 uals on the option to make such elec7 tion through educational materials, in8 cluding through the notices provided 

9 under section 1804(a). 

10 ‘‘(II) TIMING OF ELECTION.—An 

11 enrollee in a prescription drug plan or 

12 an MA–PD plan may make such an 

13 election— 

14 ‘‘(aa) prior to the beginning 

15 of the plan year; or 

16 ‘‘(bb) in any month during 

17 the plan year. 

18 ‘‘(III) PDP SPONSOR AND MA

19 ORGANIZATION RESPONSIBILITIES.— 

20 Each PDP sponsor offering a pre21 scription drug plan or MA organiza22 tion offering an MA–PD plan— 

23 ‘‘(aa) may not limit the op24 tion for an enrollee to make such 


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1 an election to certain covered 

2 part D drugs; 

3 ‘‘(bb) shall, prior to the plan 

4 year, notify prospective enrollees 

5 of the option to make such an 

6 election in promotional materials; 

7 ‘‘(cc) shall include informa8 tion on such option in enrollee 

9 educational materials; 

10 ‘‘(dd) shall have in place a 

11 mechanism to notify a pharmacy 

12 during the plan year when an en13 rollee incurs out-of-pocket costs 

14 with respect to covered part D 

15 drugs that make it likely the en16 rollee may benefit from making 

17 such an election; 

18 ‘‘(ee) shall provide that a 

19 pharmacy, after receiving a noti20 fication described in item (dd) 

21 with respect to an enrollee, in22 forms the enrollee of such notifi23 cation; 

24 ‘‘(ff) shall ensure that such 

25 an election by an enrollee has no 


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1 effect on the amount paid to 

2 pharmacies (or the timing of 

3 such payments) with respect to 

4 covered part D drugs dispensed 

5 to the enrollee; and 

6 ‘‘(gg) shall have in place a 

7 financial reconciliation process to 

8 correct inaccuracies in payments 

9 made by an enrollee under this 

10 subparagraph with respect to 

11 covered part D drugs during the 

12 plan year. 

13 ‘‘(IV) FAILURE TO PAY AMOUNT

14 BILLED.—If an enrollee fails to pay 

15 the amount billed for a month as re16 quired under this subparagraph, the 

17 election of the enrollee pursuant to 

18 clause (i) shall be terminated and en19 rollee shall pay the cost-sharing other20 wise applicable for any covered part D 

21 drugs subsequently dispensed to the 

22 enrollee up to the annual out-of-pock23 et threshold specified in paragraph 

24 (4)(B). 


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1 ‘‘(V) CLARIFICATION REGARDING

2 PAST DUE AMOUNTS.—Nothing in this 

3 subparagraph shall be construed as 

4 prohibiting a PDP sponsor or an MA 

5 organization from billing an enrollee 

6 for an amount owed under this sub7 paragraph. 

8 ‘‘(VI) TREATMENT OF UNSET9 TLED BALANCES.—Any unsettled bal10 ances with respect to amounts owed 

11 under this subparagraph shall be 

12 treated as plan losses and the Sec13 retary shall not be liable for any such 

14 balances outside of those assumed as 

15 losses estimated in plan bids.’’; and 

16 (2) in paragraph (4)— 

17 (A) in subparagraph (C), by striking ‘‘and 

18 subject to subparagraph (F)’’ and inserting 

19 ‘‘and subject to subparagraphs (F) and (G)’’; 

20 and 

21 (B) by adding at the end the following new 

22 subparagraph: 

23 ‘‘(G) INCLUSION OF COSTS PAID UNDER

24 MAXIMUM MONTHLY CAP OPTION.—In applying 

25 subparagraph (A), with respect to an enrollee 


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1 who has made an election pursuant to clause (i) 

2 of paragraph (2)(E), costs shall be treated as 

3 incurred if such costs are paid by a PDP spon4 sor or an MA organization under the process 

5 provided under such paragraph.’’. 

6 (b) APPLICATION TO ALTERNATIVE PRESCRIPTION

7 DRUG COVERAGE.—Section 1860D–2(c) of the Social Se8 curity Act (42 U.S.C. 1395w–102(c)) is amended by add9 ing at the end the following new paragraph: 

10 ‘‘(4) SAME MAXIMUM MONTHLY CAP ON COST11 SHARING.—For plan years beginning on or after 

12 January 1, 2025, the maximum monthly cap on 

13 cost-sharing payments under the process provided 

14 under subsection (b)(2)(E) shall apply to such cov15 erage.’’. 

16 SEC. 373. MARKET BASED PART B PRICING INDEX. 

17 Notwithstanding any provision of part B of title 

18 XVIII of the Social Security Act, the Secretary of Health 

19 and Human Services may make payments for drugs pay20 able under such part based on an international pricing 

21 index. In using such an index, the Secretary shall take 

22 into account whether the market of each country included 

23 in such index is a price-controlled or free market and give 

24 more weight under such index to countries with market25 based drug policies. 


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1 SEC. 374. INNOVATION MODEL TESTING OF MEDICARE 

2 DRUG PAYMENTS. 

3 Notwithstanding any provision of section 1115A, the 

4 Secretary of Health and Human Services may, under such 

5 section, test a model to integrate benefits provided for 

6 drugs under parts A, B, and D of title XVIII of the Social 

7 Security Act. 

8 SEC. 375. MODIFICATION OF MAXIMUM REBATE AMOUNT 

9 UNDER MEDICAID DRUG REBATE PROGRAM. 

10 (a) IN GENERAL.—Subparagraph (D) of section 

11 1927(c)(2) of the Social Security Act (42 U.S.C. 1396r– 

12 8(c)(2)) is amended to read as follows: 

13 ‘‘(D) MAXIMUM REBATE AMOUNT.— 

14 ‘‘(i) IN GENERAL.—Except as pro15 vided in clause (ii), in no case shall the 

16 sum of the amounts applied under para17 graph (1)(A)(ii) and this paragraph with 

18 respect to each dosage form and strength 

19 of a single source drug or an innovator 

20 multiple source drug for a rebate period 

21 exceed— 

22 ‘‘(I) for rebate periods beginning 

23 after December 31, 2009, and before 

24 September 30, 2025, 100 percent of 

25 the average manufacturer price of the 

26 drug; and 


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1 ‘‘(II) for rebate periods beginning 

2 on or after October 1, 2025, 125 per3 cent of the average manufacturer 

4 price of the drug. 

5 ‘‘(ii) NO MAXIMUM AMOUNT FOR

6 DRUGS IF AMP INCREASES OUTPACE IN7 FLATION.— 

8 ‘‘(I) IN GENERAL.—If the aver9 age manufacturer price with respect 

10 to each dosage form and strength of 

11 a single source drug or an innovator 

12 multiple source drug increases on or 

13 after October 1, 2025, and such in14 creased average manufacturer price 

15 exceeds the inflation-adjusted average 

16 manufacturer price determined with 

17 respect to such drug under subclause 

18 (II) for the rebate period, clause (i) 

19 shall not apply and there shall be no 

20 limitation on the sum of the amounts 

21 applied under paragraph (1)(A)(ii) 

22 and this paragraph for the rebate pe23 riod with respect to each dosage form 

24 and strength of the single source drug 

25 or innovator multiple source drug. 


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1 ‘‘(II) INFLATION-ADJUSTED AV2 ERAGE MANUFACTURER PRICE DE3 FINED.—In this clause, the term ‘in4 flation-adjusted average manufacturer 

5 price’ means, with respect to a single 

6 source drug or an innovator multiple 

7 source drug and a rebate period, the 

8 average manufacturer price for each 

9 dosage form and strength of the drug 

10 for the calendar quarter beginning 

11 July 1, 1990 (without regard to 

12 whether or not the drug has been sold 

13 or transferred to an entity, including 

14 a division or subsidiary of the manu15 facturer, after the 1st day of such 

16 quarter), increased by the percentage 

17 by which the consumer price index for 

18 all urban consumers (United States 

19 city average) for the month before the 

20 month in which the rebate period be21 gins exceeds such index for September 

22 1990.’’. 

23 (b) TREATMENT OF SUBSEQUENTLY APPROVED

24 DRUGS.—Section 1927(c)(2)(B) of the Social Security Act 

25 (42 U.S.C. 1396r–8(c)(2)(B)) is amended by inserting 


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1 ‘‘and clause (ii)(II) of subparagraph (D)’’ after ‘‘clause 

2 (ii)(II) of subparagraph (A)’’. 

3 (c) TECHNICAL AMENDMENTS.—Section 

4 1927(c)(3)(C)(ii)(IV) of the Social Security Act (42 

5 U.S.C. 1396r–9(c)(3)(C)(ii)(IV)) is amended— 

6 (1) by striking ‘‘subparagraph (A)’’ and insert7 ing ‘‘paragraph (3)(A)’’; and 

8 (2) by striking ‘‘this subparagraph’’ and insert9 ing ‘‘paragraph (3)(C)’’. 

10 Subtitle F—Medical Malpractice 

11 Reform 

12 SEC. 381. DEFINITIONS. 

13 In this Act: 

14 (1) ALTERNATIVE DISPUTE RESOLUTION SYS15 TEM; ADR.—The term ‘‘alternative dispute resolution 

16 system’’ or ‘‘ADR’’ means a system that provides 

17 for the resolution of health care lawsuits in a man18 ner other than through a civil action brought in a 

19 State or Federal court. 

20 (2) CLAIMANT.—The term ‘‘claimant’’ means 

21 any person who brings a health care lawsuit, includ22 ing a person who asserts or claims a right to legal 

23 or equitable contribution, indemnity, or subrogation, 

24 arising out of a health care liability claim or action, 

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1 serted or such an action is brought, whether de2 ceased, incompetent, or a minor. 

3 (3) COLLATERAL SOURCE BENEFITS.—The 

4 term ‘‘collateral source benefits’’ means any amount 

5 paid or reasonably likely to be paid in the future to 

6 or on behalf of the claimant, or any service, product, 

7 or other benefit provided or reasonably likely to be 

8 provided in the future to or on behalf of the claim9 ant, as a result of the injury or wrongful death, pur10 suant to— 

11 (A) any State or Federal health, sickness, 

12 income-disability, accident, or workers’ com13 pensation law; 

14 (B) any health, sickness, income-disability, 

15 or accident insurance that provides health bene16 fits or income-disability coverage; 

17 (C) any contract or agreement of any 

18 group, organization, partnership, or corporation 

19 to provide, pay for, or reimburse the cost of 

20 medical, hospital, dental, or income-disability 

21 benefits; and 

22 (D) any other publicly or privately funded 

23 program. 

24 (4) CONTINGENT FEE.—The term ‘‘contingent 

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1 sons which is payable only if a recovery is effected 

2 on behalf of one or more claimants. 

3 (5) ECONOMIC DAMAGES.—The term ‘‘economic 

4 damages’’ means objectively verifiable monetary 

5 losses incurred as a result of the provision or use of 

6 (or failure to provide or use) health care services or 

7 medical products, such as past and future medical 

8 expenses, loss of past and future earnings, cost of 

9 obtaining domestic services, loss of employment, and 

10 loss of business or employment opportunities, unless 

11 otherwise defined under applicable State law. In no 

12 circumstances shall damages for health care services 

13 or medical products exceed the amount actually paid 

14 or incurred by or on behalf of the claimant. 

15 (6) FUTURE DAMAGES.—The term ‘‘future 

16 damages’’ means any damages that are incurred 

17 after the date of judgment, settlement, or other reso18 lution (including mediation, or any other form of al19 ternative dispute resolution). 

20 (7) HEALTH CARE LAWSUIT.—The term 

21 ‘‘health care lawsuit’’ means any health care liability 

22 claim concerning the provision of goods or services 

23 for which coverage was provided in whole or in part 

24 via a Federal program, subsidy or tax benefit, or 

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1 sion of goods or services for which coverage was pro2 vided in whole or in part via a Federal program, 

3 subsidy or tax benefit, brought in a State or Federal 

4 court or pursuant to an alternative dispute resolu5 tion system, against a health care provider regard6 less of the theory of liability on which the claim is 

7 based, or the number of claimants, plaintiffs, de8 fendants, or other parties, or the number of claims 

9 or causes of action, in which the claimant alleges a 

10 health care liability claim. Such term does not in11 clude a claim or action which is based on criminal 

12 liability; which seeks civil fines or penalties paid to 

13 Federal, State, or local government; or which is 

14 grounded in antitrust. 

15 (8) HEALTH CARE LIABILITY ACTION.—The 

16 term ‘‘health care liability action’’ means a civil ac17 tion brought in a State or Federal court or pursuant 

18 to an alternative dispute resolution system, against 

19 a health care provider regardless of the theory of li20 ability on which the claim is based, or the number 

21 of plaintiffs, defendants, or other parties, or the 

22 number of causes of action, in which the claimant al23 leges a health care liability claim. 

24 (9) HEALTH CARE LIABILITY CLAIM.—The 

25 term ‘‘health care liability claim’’ means a demand 


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1 by any person, whether or not pursuant to ADR, 

2 against a health care provider, including, but not 

3 limited to, third-party claims, cross-claims, counter4 claims, or contribution claims, which are based upon 

5 the provision or use of (or the failure to provide or 

6 use) health care services or medical products, re7 gardless of the theory of liability on which the claim 

8 is based, or the number of plaintiffs, defendants, or 

9 other parties, or the number of causes of action. 

10 (10) HEALTH CARE PROVIDER.—The term 

11 ‘‘health care provider’’ means any person or entity 

12 required by State or Federal laws or regulations to 

13 be licensed, registered, or certified to provide health 

14 care services, and being either so licensed, reg15 istered, or certified, or exempted from such require16 ment by other statute or regulation, as well as any 

17 other individual or entity defined as a health care 

18 provider, health care professional, or health care in19 stitution under State law. 

20 (11) HEALTH CARE SERVICES.—The term 

21 ‘‘health care services’’ means the provision of any 

22 goods or services (including safety, professional, or 

23 administrative services directly related to health 

24 care) by a health care provider, or by any individual 

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1 vider, that relates to the diagnosis, prevention, or 

2 treatment of any human disease or impairment, or 

3 the assessment or care of the health of human 

4 beings. 

5 (12) MEDICAL PRODUCT.—The term ‘‘medical 

6 product’’ means a drug, device, or biological product 

7 intended for humans, and the terms ‘‘drug’’, ‘‘de8 vice’’, and ‘‘biological product’’ have the meanings 

9 given such terms in sections 201(g)(1) and 201(h) 

10 of the Federal Food, Drug and Cosmetic Act (21 

11 U.S.C. 321(g)(1) and (h)) and section 351(a) of the 

12 Public Health Service Act (42 U.S.C. 262(a)), re13 spectively, including any component or raw material 

14 used therein, but excluding health care services. 

15 (13) NONECONOMIC DAMAGES.—The term 

16 ‘‘noneconomic damages’’ means damages for phys17 ical and emotional pain, suffering, inconvenience, 

18 physical impairment, mental anguish, disfigurement, 

19 loss of enjoyment of life, loss of society and compan20 ionship, loss of consortium (other than loss of do21 mestic service), hedonic damages, injury to reputa22 tion, and all other nonpecuniary losses of any kind 

23 or nature incurred as a result of the provision or use 

24 of (or failure to provide or use) health care services 


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1 or medical products, unless otherwise defined under 

2 applicable State law. 

3 (14) RECOVERY.—The term ‘‘recovery’’ means 

4 the net sum recovered after deducting any disburse5 ments or costs incurred in connection with prosecu6 tion or settlement of the claim, including all costs 

7 paid or advanced by any person. Costs of health care 

8 incurred by the plaintiff and the attorneys’ office 

9 overhead costs or charges for legal services are not 

10 deductible disbursements or costs for such purpose. 

11 (15) REPRESENTATIVE.—The term ‘‘represent12 ative’’ means a legal guardian, attorney, person des13 ignated to make decisions on behalf of a patient 

14 under a medical power of attorney, or any person 

15 recognized in law or custom as a patient’s agent. 

16 (16) STATE.—The term ‘‘State’’ means each of 

17 the several States, the District of Columbia, the 

18 Commonwealth of Puerto Rico, the Virgin Islands, 

19 Guam, American Samoa, the Northern Mariana Is20 lands, the Trust Territory of the Pacific Islands, and 

21 any other territory or possession of the United 

22 States, or any political subdivision thereof. 

23 SEC. 382. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS. 

24 (a) STATUTE OF LIMITATIONS.— 


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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the time for the commencement of a 

3 health care lawsuit shall be, whichever occurs first of 

4 the following: 

5 (A) Three years after the date of the oc6 currence of the breach or tort. 

7 (B) Three years after the date the medical 

8 or health care treatment that is the subject of 

9 the claim is completed. 

10 (C) One year after the claimant discovers, 

11 or through the use of reasonable diligence 

12 should have discovered, the injury. 

13 (2) TOLLING.—In no event shall the time for 

14 commencement of a health care lawsuit exceed 3 

15 years after the date of the occurrence of the breach 

16 or tort or 3 years after the date the medical or 

17 health care treatment that is the subject of the claim 

18 is completed (whichever occurs first) unless tolled 

19 for any of the following— 

20 (A) upon proof of fraud; 

21 (B) intentional concealment; or 

22 (C) the presence of a foreign body, which 

23 has no therapeutic or diagnostic purpose or ef24 fect, in the person of the injured person. 


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1 (3) ACTIONS BY A MINOR.—Actions by a minor 

2 shall be commenced within 3 years after the date of 

3 the occurrence of the breach or tort or 3 years after 

4 the date of the medical or health care treatment that 

5 is the subject of the claim is completed (whichever 

6 occurs first) except that actions by a minor under 

7 the full age of 6 years shall be commenced within 3 

8 years after the date of the occurrence of the breach 

9 or tort, 3 years after the date of the medical or 

10 health care treatment that is the subject of the claim 

11 is completed, or 1 year after the injury is discovered, 

12 or through the use of reasonable diligence should 

13 have been discovered, or prior to the minor’s 8th 

14 birthday, whichever provides a longer period. Such 

15 time limitation shall be tolled for minors for any pe16 riod during which a parent or guardian and a health 

17 care provider have committed fraud or collusion in 

18 the failure to bring an action on behalf of the in19 jured minor. 

20 (b) STATE FLEXIBILITY.—No provision of subsection 

21 (a) shall be construed to preempt any State law (whether 

22 effective before, on, or after the date of the enactment of 

23 this Act) that— 

24 (1) specifies a time period of less than 3 years 

25 after the date of injury or less than 1 year after the 


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1 claimant discovers, or through the use of reasonable 

2 diligence should have discovered, the injury, for the 

3 filing of a health care lawsuit; 

4 (2) that specifies a different time period for the 

5 filing of lawsuits by a minor; 

6 (3) that triggers the time period based on the 

7 date of the alleged negligence; or 

8 (4) establishes a statute of repose for the filing 

9 of a health care lawsuit. 

10 SEC. 383. COMPENSATING PATIENT INJURY. 

11 (a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL

12 ECONOMIC LOSSES IN HEALTH CARE LAWSUITS.—In any 

13 health care lawsuit, nothing in this Act shall limit a claim14 ant’s recovery of the full amount of the available economic 

15 damages, notwithstanding the limitation in subsection (b). 

16 (b) ADDITIONAL NONECONOMIC DAMAGES.—In any 

17 health care lawsuit, the amount of noneconomic damages, 

18 if available, shall not exceed $250,000, regardless of the 

19 number of parties against whom the action is brought or 

20 the number of separate claims or actions brought with re21 spect to the same injury. 

22 (c) NO DISCOUNT OF AWARD FOR NONECONOMIC

23 DAMAGES.—For purposes of applying the limitation in 

24 subsection (b), future noneconomic damages shall not be 

25 discounted to present value. The jury shall not be inVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00351 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 formed about the maximum award for noneconomic dam2 ages. An award for noneconomic damages in excess of 

3 $250,000 shall be reduced either before the entry of judg4 ment, or by amendment of the judgment after entry of 

5 judgment, and such reduction shall be made before ac6 counting for any other reduction in damages required by 

7 law. If separate awards are rendered for past and future 

8 noneconomic damages and the combined awards exceed 

9 $250,000, the future noneconomic damages shall be re10 duced first. 

11 (d) FAIR SHARE RULE.—In any health care lawsuit, 

12 each party shall be liable for that party’s several share 

13 of any damages only and not for the share of any other 

14 person. Each party shall be liable only for the amount of 

15 damages allocated to such party in direct proportion to 

16 such party’s percentage of responsibility. Whenever a 

17 judgment of liability is rendered as to any party, a sepa18 rate judgment shall be rendered against each such party 

19 for the amount allocated to such party. For purposes of 

20 this section, the trier of fact shall determine the propor21 tion of responsibility of each party for the claimant’s 

22 harm. 

23 (e) STATE FLEXIBILITY.—No provision of this sec24 tion shall be construed to preempt any State law (whether 

25 effective before, on, or after the date of the enactment of 


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1 this Act) that specifies a particular monetary amount of 

2 economic or noneconomic damages (or the total amount 

3 of damages) that may be awarded in a health care lawsuit, 

4 regardless of whether such monetary amount is greater 

5 or lesser than is provided for under this section. 

6 SEC. 384. MAXIMIZING PATIENT RECOVERY. 

7 (a) COURT SUPERVISION OF SHARE OF DAMAGES

8 ACTUALLY PAID TO CLAIMANTS.—In any health care law9 suit, the court shall supervise the arrangements for pay10 ment of damages to protect against conflicts of interest 

11 that may have the effect of reducing the amount of dam12 ages awarded that are actually paid to claimants. In par13 ticular, in any health care lawsuit in which the attorney 

14 for a party claims a financial stake in the outcome by vir15 tue of a contingent fee, the court shall have the power 

16 to restrict the payment of a claimant’s damage recovery 

17 to such attorney, and to redirect such damages to the 

18 claimant based upon the interests of justice and principles 

19 of equity. In no event shall the total of all contingent fees 

20 for representing all claimants in a health care lawsuit ex21 ceed the following limits: 

22 (1) Forty percent of the first $50,000 recovered 

23 by the claimant(s). 

24 (2) Thirty-three and one-third percent of the 

25 next $50,000 recovered by the claimant(s). 


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1 (3) Twenty-five percent of the next $500,000 

2 recovered by the claimant(s). 

3 (4) Fifteen percent of any amount by which the 

4 recovery by the claimant(s) is in excess of $600,000. 

5 (b) APPLICABILITY.—The limitations in this section 

6 shall apply whether the recovery is by judgment, settle7 ment, mediation, arbitration, or any other form of alter8 native dispute resolution. In a health care lawsuit involv9 ing a minor or incompetent person, a court retains the 

10 authority to authorize or approve a fee that is less than 

11 the maximum permitted under this section. The require12 ment for court supervision in the first two sentences of 

13 subsection (a) applies only in civil actions. 

14 (c) STATE FLEXIBILITY.—No provision of this sec15 tion shall be construed to preempt any State law (whether 

16 effective before, on, or after the date of the enactment of 

17 this Act) that specifies a lesser percentage or lesser total 

18 value of damages which may be claimed by an attorney 

19 representing a claimant in a health care lawsuit. 

20 SEC. 385. AUTHORIZATION OF PAYMENT OF FUTURE DAM21 AGES TO CLAIMANTS IN HEALTH CARE LAW22 SUITS. 

23 (a) IN GENERAL.—In any health care lawsuit, if an 

24 award of future damages, without reduction to present 

25 value, equaling or exceeding $50,000 is made against a 


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1 party with sufficient insurance or other assets to fund a 

2 periodic payment of such a judgment, the court shall, at 

3 the request of any party, enter a judgment ordering that 

4 the future damages be paid by periodic payments, in ac5 cordance with the Uniform Periodic Payment of Judg6 ments Act promulgated by the National Conference of 

7 Commissioners on Uniform State Laws. 

8 (b) APPLICABILITY.—This section applies to all ac9 tions which have not been first set for trial or retrial be10 fore the effective date of this Act. 

11 (c) STATE FLEXIBILITY.—No provision of this sec12 tion shall be construed to preempt any State law (whether 

13 effective before, on, or after the date of the enactment of 

14 this Act) that specifies periodic payments for future dam15 ages at any amount other than $50,000 or that mandates 

16 such payments absent the request of either party. 

17 SEC. 386. PRODUCT LIABILITY FOR HEALTH CARE PRO18 VIDERS. 

19 A health care provider who prescribes, or who dis20 penses pursuant to a prescription, a medical product ap21 proved, licensed, or cleared by the Food and Drug Admin22 istration shall not be named as a party to a product liabil23 ity lawsuit involving such product and shall not be liable 

24 to a claimant in a class action lawsuit against the manu25 facturer, distributor, or seller of such product. 


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1 SEC. 387. EFFECT ON OTHER LAWS. 

2 (a) VACCINE INJURY.— 

3 (1) To the extent that title XXI of the Public 

4 Health Service Act establishes a Federal rule of law 

5 applicable to a civil action brought for a vaccine-re6 lated injury or death— 

7 (A) this Act does not affect the application 

8 of the rule of law to such an action; and 

9 (B) any rule of law prescribed by this sub10 title in conflict with a rule of law of such title 

11 XXI shall not apply to such action. 

12 (2) If there is an aspect of a civil action 

13 brought for a vaccine-related injury or death to 

14 which a Federal rule of law under title XXI of the 

15 Public Health Service Act does not apply, then this 

16 subtitle or otherwise applicable law (as determined 

17 under this subtitle) will apply to such aspect of such 

18 action. 

19 (b) OTHER FEDERAL LAW.—Except as provided in 

20 this section, nothing in this subtitle shall be deemed to 

21 affect any defense available to a defendant in a health care 

22 lawsuit or action under any other provision of Federal law. 

23 SEC. 388. LIMITATION ON EXPERT WITNESS TESTIMONY. 

24 (a) IN GENERAL.—No person in a health care profes25 sion requiring licensure under the laws of a State shall 


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1 be competent to testify in any court of law to establish 

2 the following facts— 

3 (1) the recognized standard of acceptable pro4 fessional practice and the specialty thereof, if any, 

5 that the defendant practices, which shall be the type 

6 of acceptable professional practice recognized in the 

7 defendant’s community or in a community similar to 

8 the defendant’s community that was in place at the 

9 time the alleged injury or wrongful action occurred; 

10 (2) that the defendant acted with less than or 

11 failed to act with ordinary and reasonable care in ac12 cordance with the recognized standard; and 

13 (3) that as a proximate result of the defend14 ant’s negligent act or omission, the claimant suf15 fered injuries which would not otherwise have oc16 curred, 

17 unless the person was licensed to practice, in the State 

18 or a contiguous bordering State, a profession or specialty 

19 which would make the person’s expert testimony relevant 

20 to the issues in the case and had practiced this profession 

21 or specialty in one of these States during the year pre22 ceding the date that the alleged injury or wrongful act 

23 occurred. 


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1 (b) APPLICABILITY.—The requirements set forth in 

2 subsection (a) shall also apply to expert witnesses testi3 fying for the defendant as rebuttal witnesses. 

4 (c) WAIVER AUTHORITY.—The court may waive the 

5 requirements in this subsection if it determines that the 

6 appropriate witnesses otherwise would not be available. 

7 SEC. 389. EXPERT WITNESS QUALIFICATIONS. 

8 (a) IN GENERAL.—In any health care lawsuit, an in9 dividual shall not give expert testimony on the appropriate 

10 standard of practice or care involved unless the individual 

11 is licensed as a health professional in one or more States 

12 and the individual meets the following criteria: 

13 (1) If the party against whom or on whose be14 half the testimony is to be offered is or claims to be 

15 a specialist, the expert witness shall specialize at the 

16 time of the occurrence that is the basis for the law17 suit in the same specialty or claimed specialty as the 

18 party against whom or on whose behalf the testi19 mony is to be offered. If the party against whom or 

20 on whose behalf the testimony is to be offered is or 

21 claims to be a specialist who is board certified, the 

22 expert witness shall be a specialist who is board cer23 tified in that specialty or claimed specialty. 

24 (2) During the 1-year period immediately pre25 ceding the occurrence of the action that gave rise to 


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1 the lawsuit, the expert witness shall have devoted a 

2 majority of the individual’s professional time to one 

3 or more of the following: 

4 (A) The active clinical practice of the same 

5 health profession as the defendant and, if the 

6 defendant is or claims to be a specialist, in the 

7 same specialty or claimed specialty. 

8 (B) The instruction of students in an ac9 credited health professional school or accredited 

10 residency or clinical research program in the 

11 same health profession as the defendant and, if 

12 the defendant is or claims to be a specialist, in 

13 an accredited health professional school or ac14 credited residency or clinical research program 

15 in the same specialty or claimed specialty. 

16 (3) If the defendant is a general practitioner, 

17 the expert witness shall have devoted a majority of 

18 the witness’s professional time in the 1-year period 

19 preceding the occurrence of the action giving rise to 

20 the lawsuit to one or more of the following: 

21 (A) Active clinical practice as a general 

22 practitioner. 

23 (B) Instruction of students in an accred24 ited health professional school or accredited 


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1 residency or clinical research program in the 

2 same health profession as the defendant. 

3 (b) LAWSUITS AGAINST ENTITIES.—If the defendant 

4 in a health care lawsuit is an entity that employs a person 

5 against whom or on whose behalf the testimony is offered, 

6 the provisions of subsection (a) apply as if the person were 

7 the party or defendant against whom or on whose behalf 

8 the testimony is offered. 

9 (c) POWER OF COURT.—Nothing in this section shall 

10 limit the power of the trial court in a health care lawsuit 

11 to disqualify an expert witness on grounds other than the 

12 qualifications set forth under this subsection. 

13 (d) LIMITATION.—An expert witness in a health care 

14 lawsuit shall not be permitted to testify if the fee of the 

15 witness is in any way contingent on the outcome of the 

16 lawsuit. 

17 (e) STATE FLEXIBILITY.—No provision of this sec18 tion shall be construed to preempt any State law (whether 

19 effective before, on, or after the date of the enactment of 

20 this Act) that places additional qualification requirements 

21 upon any individual testifying as an expert witness. 

22 SEC. 390. COMMUNICATIONS FOLLOWING UNANTICIPATED 

23 OUTCOME. 

24 (a) PROVIDER COMMUNICATIONS.—In any health 

25 care liability action, any and all statements, affirmations, 


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1 gestures, or conduct expressing apology, fault, sympathy, 

2 commiseration, condolence, compassion, or a general sense 

3 of benevolence which are made by a health care provider 

4 or an employee of a health care provider to the patient, 

5 a relative of the patient, or a representative of the patient 

6 and which relate to the discomfort, pain, suffering, injury, 

7 or death of the patient as the result of the unanticipated 

8 outcome of medical care shall be inadmissible for any pur9 pose as evidence of an admission of liability or as evidence 

10 of an admission against interest. 

11 (b) STATE FLEXIBILITY.—No provision of this sec12 tion shall be construed to preempt any State law (whether 

13 effective before, on, or after the date of the enactment of 

14 this Act) that makes additional communications inadmis15 sible as evidence of an admission of liability or as evidence 

16 of an admission against interest. 

17 SEC. 391. AFFIDAVIT OF MERIT. 

18 (a) REQUIRED FILING.—Subject to subsection (b), 

19 the plaintiff in a health care lawsuit alleging negligence 

20 or, if the plaintiff is represented by an attorney, the plain21 tiff’s attorney shall file simultaneously with the health 

22 care lawsuit an affidavit of merit signed by a health pro23 fessional who meets the requirements for an expert wit24 ness under section 242 of this Act. The affidavit of merit 

25 shall certify that the health professional has reviewed the 


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1 notice and all medical records supplied to him or her by 

2 the plaintiff’s attorney concerning the allegations con3 tained in the notice and shall contain a statement of each 

4 of the following: 

5 (1) The applicable standard of practice or care. 

6 (2) The health professional’s opinion that the 

7 applicable standard of practice or care was breached 

8 by the health professional or health facility receiving 

9 the notice. 

10 (3) The actions that should have been taken or 

11 omitted by the health professional or health facility 

12 in order to have complied with the applicable stand13 ard of practice or care. 

14 (4) The manner in which the breach of the 

15 standard of practice or care was the proximate cause 

16 of the injury alleged in the notice. 

17 (5) A listing of the medical records reviewed. 

18 (b) FILING EXTENSION.—Upon motion of a party for 

19 good cause shown, the court in which the complaint is filed 

20 may grant the plaintiff or, if the plaintiff is represented 

21 by an attorney, the plaintiff’s attorney an additional 28 

22 days in which to file the affidavit required under sub23 section (a). 

24 (c) STATE FLEXIBILITY.—No provision of this sec25 tion shall be construed to preempt any State law (whether 


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1 effective before, on, or after the date of the enactment of 

2 this Act) that establishes additional requirements for the 

3 filing of an affidavit of merit or similar pre-litigation docu4 mentation. 

5 SEC. 392. NOTICE OF INTENT TO COMMENCE LAWSUIT. 

6 (a) ADVANCE NOTICE.—A person shall not com7 mence a health care lawsuit against a health care provider 

8 unless the person has given the health care provider 90 

9 days written notice before the action is commenced. 

10 (b) EXCEPTIONS.—A health care lawsuit against a 

11 health care provider filed within 6 months of the statute 

12 of limitations expiring as to any claimant, or within 1 year 

13 of the statute of repose expiring as to any claimant, shall 

14 be exempt from compliance with this section. 

15 (c) STATE FLEXIBILITY.—No provision of this sec16 tion shall be construed to preempt any State law (whether 

17 effective before, on, or after the date of the enactment of 

18 this Act) that establishes a different time period for the 

19 filing of written notice. 

20 SEC. 393. LIMITATION ON LIABILITY FOR VOLUNTEER 

21 HEALTH CARE PROFESSIONALS. 

22 (a) IN GENERAL.—Title II of the Public Health Serv23 ice Act (42 U.S.C. 202 et seq.) is amended by inserting 

24 after section 224 the following: 


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1 ‘‘SEC. 224A. LIMITATION ON LIABILITY FOR VOLUNTEER 

2 HEALTH CARE PROFESSIONALS. 

3 ‘‘(a) LIMITATION ON LIABILITY.—A physician shall 

4 not be liable under Federal or State law in any civil action 

5 for any harm caused by an act or omission of such physi6 cian, or attending medical personnel supporting such phy7 sician, if such act or omission— 

8 ‘‘(1) occurs in the course of furnishing qualified 

9 charity care (as such term is defined in section 

10 199B of the Internal Revenue Code of 1986); and 

11 ‘‘(2) was not grossly negligent. 

12 ‘‘(b) PREEMPTION.—This section preempts the laws 

13 of a State or any political subdivision of a State to the 

14 extent that such laws are inconsistent with this section, 

15 unless such laws provide greater protection from liability 

16 for a defendant. 

17 ‘‘(c) DEFINITIONS.—In this section: 

18 ‘‘(1) PHYSICIAN.—The term ‘physician’ has the 

19 meaning given such term by section 1861(r) of the 

20 Social Security Act. 

21 ‘‘(2) ATTENDING MEDICAL PERSONNEL.—The 

22 term ‘attending medical personnel’ means an indi23 vidual who is licensed to directly support a physician 

24 in furnishing medical services.’’. 

25 (b) EFFECTIVE DATE.—The amendments made by 

26 this section shall apply to any claim filed to the extent 


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1 that it is with respect to acts or omissions occurring after 

2 the date of the enactment of this Act. 

3 SEC. 394. RULES OF CONSTRUCTION. 

4 (a) HEALTH CARE LAWSUITS.—Unless otherwise 

5 specified in this subtitle, the provisions governing health 

6 care lawsuits set forth in this subtitle preempt, subject to 

7 subsections (b) and (c), State law to the extent that State 

8 law prevents the application of any provisions of law estab9 lished by or under this subtitle. The provisions governing 

10 health care lawsuits set forth in this subtitle supersede 

11 chapter 171 of title 28, United States Code, to the extent 

12 that such chapter— 

13 (1) provides for a greater amount of damages 

14 or contingent fees, a longer period in which a health 

15 care lawsuit may be commenced, or a reduced appli16 cability or scope of periodic payment of future dam17 ages, than provided in this subtitle; or 

18 (2) prohibits the introduction of evidence re19 garding collateral source benefits, or mandates or 

20 permits subrogation or a lien on collateral source 

21 benefits. 

22 (b) PROTECTION OF STATES’ RIGHTS AND OTHER

23 LAWS.—Any issue that is not governed by any provision 

24 of law established by or under this subtitle (including 


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1 State standards of negligence) shall be governed by other2 wise applicable State or Federal law. 

3 (c) STATE FLEXIBILITY.—No provision of this sub4 title shall be construed to preempt any defense available 

5 to a party in a health care lawsuit under any other provi6 sion of State or Federal law. 

7 SEC. 395. EFFECTIVE DATE. 

8 This subtitle shall apply to any health care lawsuit 

9 brought in a Federal or State court, or subject to an alter10 native dispute resolution system, that is initiated on or 

11 after the date of the enactment of this subtitle, except that 

12 any health care lawsuit arising from an injury occurring 

13 prior to the date of the enactment of this subtitle shall 

14 be governed by the applicable statute of limitations provi15 sions in effect at the time the cause of action accrued. 

16 TITLE IV—MEDICARE AND 

17 MEDICAID REFORMS 

18 Subtitle A—Medicaid Reforms 

19 SEC. 401. MEDICAID PAYMENT REFORM. 

20 (a) IN GENERAL.—Title XIX of the Social Security 

21 Act (42 U.S.C. 1396 et seq.) is amended by inserting after 

22 section 1903 the following section: 

23 ‘‘SEC. 1903A. REFORMED PAYMENT TO STATES. 

24 ‘‘(a) REFORMED PAYMENT SYSTEM.— 


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1 ‘‘(1) IN GENERAL.—For quarters beginning on 

2 or after the implementation date (as defined in sub3 section (k)(1)), in the case of a State that elects (in 

4 a time and manner specified by the Secretary) to 

5 apply this section, in lieu of amounts otherwise pay6 able to such State under this title (including any 

7 payments attributable to section 1923), except as 

8 otherwise provided in this section, the amount pay9 able to such State shall be equal to the sum of the 

10 following: 

11 ‘‘(A) ADJUSTED AGGREGATE BENE12 FICIARY-BASED AMOUNT.—The aggregate bene13 ficiary-based amount specified in subsection (b) 

14 for the quarter and the State, adjusted under 

15 subsection (e). 

16 ‘‘(B) CHRONIC CARE QUALITY BONUS.— 

17 The amount (if any) of the chronic care quality 

18 bonus payment specified in subsection (f) for 

19 the quarter for the State. 

20 ‘‘(2) REQUIREMENT OF STATE SHARE.— 

21 ‘‘(A) IN GENERAL.—A State shall make, 

22 from non-Federal funds, expenditures in an 

23 amount equal to its State share (as determined 

24 under subparagraph (B)) for a quarter for 

25 items, services, and other costs for which, but 


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1 for paragraph (1), Federal funds would have 

2 been payable under this title. 

3 ‘‘(B) STATE SHARE.—The State share for 

4 a State for a quarter in a fiscal year is equal 

5 to the product of— 

6 ‘‘(i) the aggregate beneficiary-based 

7 amount specified in subsection (b) for the 

8 quarter and the State; and 

9 ‘‘(ii) the ratio of— 

10 ‘‘(I) the State percentage de11 scribed in subparagraph (D)(ii) for 

12 such State and fiscal year; to 

13 ‘‘(II) the Federal percentage de14 scribed in subparagraph (D)(i) for 

15 such State and fiscal year. 

16 ‘‘(C) NONPAYMENT FOR FAILURE TO PAY

17 STATE SHARE.— 

18 ‘‘(i) IN GENERAL.—If a State fails to 

19 expend the amount required under sub20 paragraph (A) for a quarter in a fiscal 

21 year, the amount payable to the State 

22 under paragraph (1) shall be reduced by 

23 the product of the amount by which the 

24 State payment is less than the State share 

25 and the ratio of— 


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1 ‘‘(I) the Federal percentage de2 scribed in subparagraph (D)(i) for 

3 such State and fiscal year; to 

4 ‘‘(II) the State percentage de5 scribed in subparagraph (D)(ii) for 

6 such State and fiscal year. 

7 ‘‘(ii) GRACE PERIOD.—A State shall 

8 not be considered to have failed to provide 

9 payment of its required State share for a 

10 quarter under subparagraph (A) if the ag11 gregate State payment towards the State’s 

12 required State share for the 4-quarter pe13 riod beginning with such quarter exceeds 

14 the required State share amount for such 

15 4-quarter period. 

16 ‘‘(D) FEDERAL AND STATE PERCENT17 AGES.—In this paragraph, with respect to a 

18 State and a fiscal year: 

19 ‘‘(i) FEDERAL PERCENTAGE.—The 

20 Federal percentage described in this clause 

21 is 75 percent or, if higher, the Federal 

22 medical assistance percentage for such 

23 State for such fiscal year. 

24 ‘‘(ii) STATE PERCENTAGE.—The State 

25 percentage described in this clause is 100 


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1 percent minus the Federal percentage de2 scribed in clause (i). 

3 ‘‘(E) RULES FOR CREDITING TOWARD

4 STATE SHARE.— 

5 ‘‘(i) GENERAL LIMITATION TO MATCH6 ABLE EXPENDITURES.—A payment for ex7 penditures shall not be counted toward the 

8 State share under subparagraph (A) unless 

9 Federal payments may be used for such 

10 expenditures consistent with paragraph 

11 (3)(B). 

12 ‘‘(ii) FURTHER LIMITATIONS ON AL13 LOWABLE EXPENDITURES.—A payment for 

14 expenditures shall not be counted towards 

15 the State share under subparagraph (A) if 

16 the expenditure is for any of the following: 

17 ‘‘(I) ABORTION.—Expenditures 

18 for an abortion. 

19 ‘‘(II) INTERGOVERNMENTAL

20 TRANSFERS.—An expenditure that is 

21 attributable to an intergovernmental 

22 transfer. 

23 ‘‘(III) CERTIFIED PUBLIC EX24 PENDITURES.—An expenditure that is 


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1 attributable to certified public expend2 itures. 

3 ‘‘(iii) CREDITING FRAUD AND ABUSE

4 RECOVERIES.—Amounts recovered by a 

5 State through the operation of its Medicaid 

6 fraud and abuse control unit described in 

7 section 1903(q) shall be fully counted to8 ward the State share under subparagraph 

9 (A). 

10 ‘‘(F) CONSTRUCTION.—Nothing in the 

11 paragraph shall be construed as preventing a 

12 State from expending, from non-Federal funds, 

13 an amount under this title in excess of the 

14 amount of the State share. 

15 ‘‘(G) DETERMINATION BASED UPON SUB16 MITTED CLAIMS.—In applying this paragraph 

17 with respect to expenditures of a State for a 

18 quarter, the determination of the expenditures 

19 for such State for such quarter shall be made 

20 after the end of the period (which, as of the 

21 date of the enactment of this section, is 2 

22 years) for which the Secretary accepts claims 

23 for payment under this title with respect to 

24 such quarter. 

25 ‘‘(3) USE OF FEDERAL PAYMENTS.— 


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1 ‘‘(A) APPLICATION OF MEDICAID LIMITA2 TIONS.—A State may only use Federal pay3 ments received under subsection (a) for expend4 itures for which Federal funds would have been 

5 payable under this title but for this section. 

6 ‘‘(B) LIMITATION FOR CERTAIN ELIGI7 BLES.— 

8 ‘‘(i) APPLICATION OF 100 PERCENT

9 FEDERAL POVERTY LINE LIMIT ON ELIGI10 BILITY.—Subject to clause (iii), a State 

11 may not use such Federal payments to 

12 provide medical assistance for an indi13 vidual who has an income (as determined 

14 under clause (ii)) that exceeds 100 percent 

15 of the poverty line (as defined in section 

16 2110(c)(5)) applicable to a family of the 

17 size involved. 

18 ‘‘(ii) DETERMINATION OF INCOME

19 USING MODIFIED ADJUSTED GROSS IN20 COME WITHOUT ANY 5 PERCENT IN21 CREASE.—In determining income for pur22 poses of clause (i) under section 

23 1902(e)(14) (relating to modified adjusted 

24 gross income), the following rules shall 

25 apply: 


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1 ‘‘(I) APPLICATION OF SPEND

2 DOWN.—The State shall take into ac3 count the costs incurred for medical 

4 care or for any other type of remedial 

5 care recognized under State law in the 

6 same manner and to the same extent 

7 that such State takes such costs into 

8 account for purposes of section 

9 1902(a)(17). 

10 ‘‘(II) DISREGARD OF 5 PERCENT

11 INCREASE.—Subparagraph (I) of sec12 tion 1902(e)(14) (relating to a 5 per13 cent reduction) shall not apply. 

14 ‘‘(iii) EXCEPTION.—Clause (i) shall 

15 not apply to an individual who is— 

16 ‘‘(I) a woman described in clause 

17 (i) of section 1903(v)(4)(A); 

18 ‘‘(II) a child who is an individual 

19 described in clause (i) of section 

20 1905(a); 

21 ‘‘(III) enrolled in a State plan 

22 under this title as of the date of the 

23 enactment of this section for the pe24 riod of continuous enrollment; or 


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1 ‘‘(IV) described in section 

2 1902(e)(14)(D) (relating to modified 

3 adjusted gross income). 

4 ‘‘(iv) CLARIFICATION RELATED TO

5 COMMUNITY SPOUSE.—Nothing in this 

6 subparagraph shall supersede the applica7 tion of section 1924 (related to community 

8 spouse income and assets). 

9 ‘‘(4) EXCEPTIONS FOR PASS-THROUGH PAY10 MENTS.— 

11 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

12 not apply, and amounts shall continue to be 

13 payable under this title (and not under sub14 section (a)), in the case of the following pay15 ments (and related administrative costs and ex16 penditures): 

17 ‘‘(i) PAYMENTS TO TERRITORIES.— 

18 Payments to a State other than the 50 

19 States and the District of Columbia. 

20 ‘‘(ii) MEDICARE COST-SHARING.— 

21 Payments attributable to Medicare cost22 sharing under section 1905(p). 

23 ‘‘(iii) PEDIATRIC VACCINES.—Pay24 ments attributable to section 1928. 


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1 ‘‘(iv) EMERGENCY SERVICES FOR CER2 TAIN INDIVIDUALS.—Payments for treat3 ment of emergency medical conditions at4 tributable to the application of section 

5 1903(v)(2). 

6 ‘‘(v) INDIAN HEALTH CARE FACILI7 TIES.—Payments for medical assistance 

8 described in the third sentence of section 

9 1905(b). 

10 ‘‘(vi) EMPLOYER-SPONSORED INSUR11 ANCE (ESI).—Payments for medical assist12 ance attributable to payments to employers 

13 for employer-sponsored health benefits cov14 erage. 

15 ‘‘(vii) OTHER POPULATIONS WITH

16 LIMITED BENEFIT COVERAGE.—Other pay17 ments that are determined by the Sec18 retary to be related to a specified popu19 lation for which the medical assistance 

20 under this title is limited and does not in21 clude any inpatient, nursing facility, or 

22 long-term care services. 

23 ‘‘(B) CERTAIN EXPENSES.—Paragraph (1) 

24 shall not apply, and amounts shall continue to 


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1 be payable under this title (and not under sub2 section (a)), in the case of the following: 

3 ‘‘(i) ADMINISTRATION OF MEDICARE

4 PRESCRIPTION DRUG BENEFIT.—Expendi5 tures described in section 1935(b) (relating 

6 to administration of the Medicare prescrip7 tion drug benefit). 

8 ‘‘(ii) PAYMENTS FOR HIT BONUSES.— 

9 Payments under section 1903(a)(3)(F) (re10 lating to payments to encourage the adop11 tion and use of certified EHR technology). 

12 ‘‘(iii) PAYMENTS FOR DESIGN, DEVEL13 OPMENT, AND INSTALLATION OF MMIS AND

14 ELIGIBILITY SYSTEMS.—Payments under 

15 subparagraphs (A)(i) and (H)(i) of section 

16 1903(a)(3) for expenditures for design, de17 velopment, and installation of the Medicaid 

18 management information systems and 

19 mechanized verification and information 

20 retrieval systems (related to eligibility). 

21 ‘‘(5) PAYMENT OF AMOUNTS.— 

22 ‘‘(A) IN GENERAL.—Except as the Sec23 retary may otherwise provide, amounts shall be 

24 payable to a State under subsection (a) in the 

25 same manner as amounts are payable under 


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1 subsection (d) of section 1903 to a State under 

2 subsection (a) of such section. 

3 ‘‘(B) INFORMATION AND FORMS.— 

4 ‘‘(i) SUBMISSION.—As a condition of 

5 receiving payment under subsection (a), a 

6 State shall submit such information, in 

7 such form, and manner, as the Secretary 

8 shall specify, including information nec9 essary to make the computations under 

10 subsections (c)(2)(C) and (e). 

11 ‘‘(ii) UNIFORM REPORTING.—The 

12 Secretary shall develop such forms as may 

13 be needed to assure a system of uniform 

14 reporting of such information across 

15 States. 

16 ‘‘(C) REQUIRED REPORTING OF INFORMA17 TION ON MEDICAL LOSS RATIOS FOR MANAGED

18 CARE.—The information required to be reported 

19 under subparagraph (B)(i) shall include infor20 mation on the medical loss ratio with respect to 

21 coverage provided under each Medicaid man22 aged care plan with a contract with the State 

23 under section 1903(m) or 1932. 

24 ‘‘(b) AGGREGATE BENEFICIARY-BASED AMOUNT.— 


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1 ‘‘(1) IN GENERAL.—The aggregate beneficiary2 based amount specified in this subsection for a State 

3 for a quarter is equal to the sum of the products, 

4 for each of the categories of Medicaid beneficiaries 

5 specified in paragraph (2), of the following: 

6 ‘‘(A) BENEFICIARY-BASED QUARTERLY

7 AMOUNT.—The beneficiary-based quarterly 

8 amount for such category computed under sub9 section (c) for such State for such quarter. 

10 ‘‘(B) NUMBER OF INDIVIDUALS IN CAT11 EGORY.—Subject to subsection (d), the average 

12 number of Medicaid beneficiaries enrolled in 

13 such category in the State in such quarter. 

14 ‘‘(2) CATEGORIES.—The categories specified in 

15 this paragraph are the following: 

16 ‘‘(A) ELDERLY.—A category of Medicaid 

17 beneficiaries who are 65 years of age or older. 

18 ‘‘(B) BLIND OR DISABLED.—A category of 

19 Medicaid beneficiaries not described in subpara20 graph (A) who are described in section 

21 1937(a)(2)(B)(ii). 

22 ‘‘(C) CHILDREN.—A category of Medicaid 

23 beneficiaries not described in subparagraph (B) 

24 who are under 21 years of age. 


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1 ‘‘(D) OTHER ADULTS.—A category of any 

2 Medicaid beneficiaries who are not described in 

3 a previous subparagraph of this paragraph. 

4 ‘‘(c) COMPUTATION OF PER BENEFICIARY, PER CAT5 EGORY QUARTERLY AMOUNT.— 

6 ‘‘(1) IN GENERAL.—For a State, for each cat7 egory of beneficiary for a quarter— 

8 ‘‘(A) FIRST REFORM YEAR.—For quarters 

9 in the first reform year (as defined in sub10 section (k)(2)), the beneficiary-based quarterly 

amount is equal to 1 11 ⁄4 of the base average per 

12 beneficiary Federal payments for such State for 

13 such category determined under paragraph (2), 

14 increased by a factor that reflects the sum of 

15 the following: 

16 ‘‘(i) HISTORICAL MEDICAL CARE COM17 PONENT OF CPI THROUGH PREVIOUS RE18 FORM YEAR.—The percentage increase in 

19 the historical medical care component of 

20 the Consumer Price Index for all urban 

21 consumers (U.S. city average) from the 

22 midpoint of the base fiscal year (as defined 

23 in paragraph (6)) to the midpoint of the 

24 fiscal year preceding the first reform year. 


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1 ‘‘(ii) PROJECTED MEDICAL CARE COM2 PONENT OF CPI FOR THE FIRST REFORM

3 YEAR.—The percentage increase in the 

4 projected medical care component of the 

5 Consumer Price Index for all urban con6 sumers (U.S. city average) from the mid7 point of the previous fiscal year referred to 

8 in clause (i) to the midpoint of the first re9 form year. 

10 ‘‘(B) SECOND AND THIRD REFORM

11 YEARS.—The beneficiary-based quarterly 

12 amount for a State for a category for quarters 

13 in the second reform year or the third reform 

14 year is equal to the beneficiary-based quarterly 

15 amount under this paragraph for such State 

16 and category for the previous reform year in17 creased by the per beneficiary percentage in18 crease (as defined in subparagraph (E)) for 

19 such category and reform year. 

20 ‘‘(C) FOURTH THROUGH TENTH REFORM

21 YEARS.—The beneficiary-based quarterly 

22 amount for a State for a category for quarters 

23 in a reform year beginning with the fourth re24 form year and ending with the tenth reform 

25 year is— 


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1 ‘‘(i) in the case of a State that is a 

2 high per beneficiary State or a low per 

3 beneficiary State (as defined in paragraph 

4 (4)(B)(iii)) for the category, the amount 

5 determined under clause (i) or (ii) of para6 graph (4)(B) for such State, category, and 

7 reform year; or 

8 ‘‘(ii) in the case of any other State, 

9 the beneficiary-based quarterly amount 

10 under this paragraph for such State and 

11 category for the previous reform year in12 creased by the per beneficiary percentage 

13 increase for such category and reform 

14 year. 

15 ‘‘(D) ELEVENTH REFORM YEAR AND SUB16 SEQUENT REFORM YEARS.—The beneficiary17 based quarterly amount for a State for a cat18 egory for quarters in a reform year beginning 

19 with the eleventh reform year is equal to the 

20 beneficiary-based quarterly amount under this 

21 paragraph for such State and category for the 

22 previous reform year increased by the per bene23 ficiary percentage increase for such category 

24 and reform year. 


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1 ‘‘(E) ANNUAL PERCENTAGE INCREASE BE2 GINNING WITH SECOND REFORM YEAR.—For 

3 purposes of this subsection, the term ‘per bene4 ficiary percentage increase’ means, for a reform 

5 year, the sum of— 

6 ‘‘(i) the projected percentage change 

7 in nominal gross domestic product from 

8 the midpoint of the previous reform year to 

9 the midpoint of the reform year for which 

10 the percentage increase is being applied; 

11 and 

12 ‘‘(ii) one percentage point. 

13 ‘‘(2) BASE PER BENEFICIARY, PER CATEGORY

14 AMOUNT FOR EACH STATE.— 

15 ‘‘(A) AVERAGE PER CATEGORY.— 

16 ‘‘(i) IN GENERAL.—The Secretary 

17 shall determine, consistent with this para18 graph and paragraph (3), a base per bene19 ficiary, per category amount for each of 

20 the 50 States and the District of Columbia 

21 equal to the average amount, per Medicaid 

22 beneficiary, of Federal payments under 

23 this title, including payments attributable 

24 to disproportionate share hospital pay25 ments under section 1923, for each of the 


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1 categories of beneficiaries under subsection 

2 (b)(2) for the base fiscal year for each of 

3 the 50 States and the District of Colum4 bia. 

5 ‘‘(ii) BEST AVAILABLE DATA.—The 

6 determination under clause (i) shall ini7 tially be estimated by the Secretary, based 

8 upon the best available data at the time 

9 the determination is made. 

10 ‘‘(iii) UPDATES.—The determination 

11 under clause (i) shall be updated by the 

12 Secretary on an annual basis based upon 

13 improved data. The Secretary shall adjust 

14 the amounts under subsection (a)(1)(A) to 

15 reflect changes in the amounts so deter16 mined based on such updates. 

17 ‘‘(B) EXCLUSION OF PASS-THROUGH PAY18 MENTS.—In computing base per beneficiary, 

19 per category amounts under subparagraph 

20 (A)(i) the Secretary shall exclude payments de21 scribed in subsection (a)(4). 

22 ‘‘(C) STANDARDIZATION.— 

23 ‘‘(i) IN GENERAL.—In computing each 

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1 ardize the amount in order to remove the 

2 variation attributable to the following: 

3 ‘‘(I) RISK FACTORS.—Such risk 

4 factors as age, health and disability 

5 status (including high cost medical 

6 conditions), gender, institutional sta7 tus, and such other factors as the 

8 Secretary determines to be appro9 priate, so as to ensure actuarial 

10 equivalence. 

11 ‘‘(II) GEOGRAPHIC.—Variations 

12 in costs on a county-by-county basis. 

13 ‘‘(ii) METHOD OF STANDARDIZA14 TION.— 

15 ‘‘(I) CONSULTATION IN DEVEL16 OPMENT OF RISK STANDARDIZA17 TION.—In developing the methodology 

18 for risk standardization for purposes 

19 of clause (i)(I), the Secretary shall 

20 consult with the Medicaid and CHIP 

21 Payment and Access Commission, the 

22 Medicare Payment Advisory Commis23 sion, and the National Association of 

24 Medicaid Directors. 


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1 ‘‘(II) METHOD FOR RISK STAND2 ARDIZATION.—In carrying out clause 

3 (i)(I), the Secretary may apply the 

4 hierarchal condition category method5 ology under section 1853(a)(1)(C). If 

6 the Secretary uses such methodology, 

7 the Secretary shall adjust the applica8 tion of such methodology to take into 

9 account the differences in services 

10 provided under this title compared to 

11 title XVIII, such as the coverage of 

12 long term care, pregnancy, and pedi13 atric services. 

14 ‘‘(III) METHOD FOR GEOGRAPHIC

15 STANDARDIZATION.—The Secretary 

16 shall apply the standardization under 

17 clause (i)(II) in a manner similar to 

18 that applied under section 

19 1853(c)(4)(A)(iii). 

20 ‘‘(iii) APPLICATION ON A NATIONAL, 

21 BUDGET NEUTRAL BASIS.—The standard22 ization under clause (i) shall be designed 

23 and implemented on a uniform national 

24 basis and shall be budget neutral so as to 


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1 not result in any aggregate change in pay2 ments under subsection (a). 

3 ‘‘(iv) RESPONSE TO NEW RISK.—Sub4 ject to clause (iii), the Secretary may ad5 just the standardization under clause (i) to 

6 respond promptly to new instances of com7 municable diseases and other public health 

8 hazards. 

9 ‘‘(v) REFERENCE TO APPLICATION OF

10 RISK ADJUSTMENT.—For rules related to 

11 the application of risk adjustment to 

12 amounts under subsection (a)(1)(A), see 

13 subsection (e). 

14 ‘‘(D) ADJUSTMENT FOR TEMPORARY FMAP

15 INCREASES.—In computing each base per bene16 ficiary, per category amounts under subpara17 graph (A)(i) the Secretary shall disregard por18 tions of payments that are attributable to a 

19 temporary increase in the Federal matching 

20 rates, including those attributable to the fol21 lowing: 

22 ‘‘(i) PPACA DISASTER FMAP.—Sec23 tion 1905(aa). 


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1 ‘‘(ii) ARRA.—Section 5001 of the 

2 American Recovery and Reinvestment Act 

3 of 2009 (42 U.S.C. 1396d note). 

4 ‘‘(iii) EXTRAORDINARY EMPLOYER

5 PENSION CONTRIBUTION.—Section 614 of 

6 the Children’s Health Insurance Program 

7 Reauthorization Act of 2009 (42 U.S.C. 

8 1396d note). 

9 ‘‘(3) ALLOCATION OF NONMEDICAL ASSISTANCE

10 PAYMENTS.—The Secretary shall establish rules for 

11 the allocation of payments under this title (other 

12 than those payments described in paragraph (1) or 

13 (5) of section 1903(a) and including such payments 

14 attributable to section 1923)— 

15 ‘‘(A) among different categories of bene16 ficiaries; and 

17 ‘‘(B) between payments included under 

18 subsection (a)(1) and payments described in 

19 subsection (a)(4). 

20 ‘‘(4) TRANSITION TO A CORRIDOR AROUND THE

21 NATIONAL AVERAGE.— 

22 ‘‘(A) DETERMINATION OF NATIONAL AVER23 AGE BASE PER BENEFICIARY, PER CATEGORY

24 AMOUNT.—Subject to subparagraph (C), the 

25 Secretary shall determine a national average 


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1 base per beneficiary, per category amount equal 

2 to the average of the base per beneficiary, per 

3 category amounts for each of the 50 States and 

4 the District of Columbia determined under 

5 paragraph (2), weighted by the average number 

6 of beneficiaries in each such category and State 

7 as determined by the Secretary consistent with 

8 subsection (d) for the base fiscal year. 

9 ‘‘(B) TRANSITION ADJUSTMENT.— 

10 ‘‘(i) HIGH PER BENEFICIARY

11 STATES.—In the case of a high per bene12 ficiary State (as defined in clause (iii)(I)) 

13 for a category, the beneficiary-based quar14 terly amount for such State and category 

15 for a quarter in a reform year (beginning 

16 with the fourth reform year and ending 

17 with the tenth reform year) is equal to the 

18 sum of— 

19 ‘‘(I) the product of the State-spe20 cific factor for such reform year (as 

21 defined in clause (iv)) and the bene22 ficiary-based quarterly amount that 

23 would otherwise be determined under 

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1 scribed in clause (ii) of paragraph 

2 (1)(C), instead of a State described in 

3 clause (i) of such paragraph; and 

4 ‘‘(II) the product of 1 minus the 

5 State-specific factor for such reform 

6 year and the beneficiary-based quar7 terly amount that would otherwise be 

8 determined under paragraph (1) for a 

9 State and category if the base per 

10 beneficiary, per category amount de11 termined under paragraph (2) for the 

12 State and category were equal to 110 

13 percent of the national average base 

14 per beneficiary, per category amount 

15 determined under subparagraph (A) 

16 for such category. 

17 ‘‘(ii) LOW PER BENEFICIARY

18 STATES.—In the case of a low per bene19 ficiary State (as defined in clause (iii)(II)) 

20 for a category, the beneficiary-based quar21 terly amount for such State and category 

22 for a quarter in a reform year (beginning 

23 with the fourth reform year and ending 

24 with the tenth reform year) is equal to the 

25 sum of— 


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1 ‘‘(I) the product of the State-spe2 cific factor for such reform year and 

3 the beneficiary-based quarterly 

4 amount that would otherwise be deter5 mined under paragraph (1) for such 

6 State and category if the State were 

7 a State described in clause (ii) of 

8 paragraph (1)(C), instead of a State 

9 described in clause (i) of such para10 graph; and 

11 ‘‘(II) the product of 1 minus the 

12 State-specific factor for such reform 

13 year and the beneficiary-based quar14 terly amount that would otherwise be 

15 determined under paragraph (1) for a 

16 State and category if the base per 

17 beneficiary, per category amount de18 termined under paragraph (2) for the 

19 State and category were equal to 90 

20 percent of the national average base 

21 per beneficiary, per category amount 

22 determined under subparagraph (A) 

23 for such category. 


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1 ‘‘(iii) HIGH AND LOW PER BENE2 FICIARY STATES DEFINED.—In this sub3 paragraph: 

4 ‘‘(I) HIGH PER BENEFICIARY

5 STATE.—The term ‘high per bene6 ficiary State’ means, with respect to a 

7 category, a State for which the base 

8 per beneficiary, per category amount 

9 determined under paragraph (2) for 

10 such category is greater than 110 per11 cent of the national average base per 

12 beneficiary, per category amount de13 termined under subparagraph (A) for 

14 such category. 

15 ‘‘(II) LOW PER BENEFICIARY

16 STATE.—The term ‘low per bene17 ficiary State’ means, with respect to a 

18 category, a State for which the base 

19 per beneficiary, per category amount 

20 determined under paragraph (2) for 

21 such category is less than 90 percent 

22 of the national average base per bene23 ficiary, per category amount deter24 mined under subparagraph (A) for 

25 such category. 


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1 ‘‘(iv) STATE-SPECIFIC FACTOR.—In 

2 this subparagraph, the term ‘State-specific 

3 factor’ means— 

4 ‘‘(I) for the fourth reform year, 

7 5 ⁄8; and 

6 ‘‘(II) for a subsequent reform 

7 year, the State-specific factor under 

8 this clause for the previous reform 

year minus 1 9 ⁄8.

10 ‘‘(C) NO ADDITIONAL EXPENDITURES.— 

11 ‘‘(i) DETERMINATION OF INCREASE IN

12 FEDERAL EXPENDITURES.—For each cat13 egory for each reform year (beginning with 

14 the fourth reform year and ending with the 

15 tenth reform year), the Secretary shall de16 termine whether the application of this 

17 paragraph— 

18 ‘‘(I) to the category for the re19 form year will result in an aggregate 

20 increase in the aggregate Federal ex21 penditures under subsection (a); and 

22 ‘‘(II) to all the categories for the 

23 reform year will result in a net aggre24 gate increase in the aggregate Federal 

25 expenditures under subsection (a). 


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1 ‘‘(ii) ADJUSTMENT.—If the Secretary 

2 determines under clause (i)(II) that the 

3 application of this paragraph to all the cat4 egories for a reform year will result in a 

5 net aggregate increase in the aggregate 

6 Federal expenditures under subsection (a), 

7 the Secretary shall reduce the national av8 erage base per beneficiary, per category 

9 amount computed under subparagraph (A) 

10 for each of the categories determined 

11 under clause (i)(I) for which there will be 

12 an aggregate increase in the aggregate 

13 Federal expenditures under subsection (a) 

14 by such uniform percentage as will ensure 

15 that there is no net aggregate Federal ex16 penditure increase described in clause 

17 (i)(II) for the reform year. 

18 ‘‘(5) REPORTS ON PER BENEFICIARY RATES; 

19 APPEALS.— 

20 ‘‘(A) REPORT TO STATES.—Not later than 

21 8 months after the date of the enactment of 

22 this section, the Secretary shall submit to each 

23 State the Secretary’s initial determination of— 


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1 ‘‘(i) the base per beneficiary, per cat2 egory amounts under paragraph (2) for 

3 such State; and 

4 ‘‘(ii) the national average base per 

5 beneficiary, per category amounts under 

6 paragraph (4)(A). 

7 ‘‘(B) OPPORTUNITY TO APPEAL.—Not 

8 later than 3 months after the date a State re9 ceives notice of the Secretary’s initial deter10 mination of such base per beneficiary, per cat11 egory amounts for such State under subpara12 graph (A)(i), the State may file with the Sec13 retary, in a form and manner specified by the 

14 Secretary, an appeal of such determination. 

15 ‘‘(C) DETERMINATION ON APPEAL.—Not 

16 later than 3 months after receiving such an ap17 peal, the Secretary shall make a final deter18 mination on such amounts for such State. If no 

19 such appeal is received for a State, the Sec20 retary’s initial determination under subpara21 graph (A)(i) shall become final. 

22 ‘‘(6) BASE FISCAL YEAR DEFINED.—In this 

23 section, the term ‘base fiscal year’ means the latest 

24 fiscal year, ending before the date of the enactment 

25 of this section, for which the Secretary determines 


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1 that adequate data are available to make the com2 putations required under this subsection. 

3 ‘‘(d) NOT COUNTING INDIVIDUALS TO ACCOUNT FOR

4 EXCLUDED PAYMENTS.—Under rules specified by the 

5 Secretary, individuals shall not be counted as Medicaid 

6 beneficiaries for purposes of subsection (b)(1)(B) and sub7 section (c)(2)(A) to the extent that such individuals— 

8 ‘‘(1) are receiving medical assistance for which 

9 payments described under subsection (a)(4)(A) are 

10 made; or 

11 ‘‘(2) would not have been eligible to enroll 

12 under the State plan (or waiver of such plan) in the 

13 State in which such individual is so enrolled if the 

14 rules for eligibility for enrollment under such plan 

15 (or waiver) were the same as such rules for eligi16 bility in effect as of January 1, 2009. 

17 ‘‘(e) RISK ADJUSTMENT.— 

18 ‘‘(1) IN GENERAL.—The amount under sub19 section (a)(1)(A) shall be adjusted under this sub20 section in an appropriate manner, specified by the 

21 Secretary and consistent with paragraph (2), to take 

22 into account— 

23 ‘‘(A) the factors described in subsection 

24 (c)(2)(C)(i)(I) within a category of bene25 ficiaries; and 


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1 ‘‘(B) variations in costs on a county-by2 county basis for medical assistance and admin3 istrative expenses. 

4 ‘‘(2) METHOD OF ADJUSTMENT.— 

5 ‘‘(A) IN GENERAL.—The adjustments 

6 under paragraph (1) shall be made in a manner 

7 similar to the manner in which similar adjust8 ments are made under subsection (c)(2)(C) and 

9 consistent with the requirements of clause (iii) 

10 of such subsection and subparagraph (B). 

11 ‘‘(B) BIANNUAL UPDATE OF RISK ADJUST12 MENT METHODOLOGY.—In applying clause 

13 (i)(I) of subsection (c)(2)(C) for purposes of 

14 subparagraph (A), the Secretary shall, in con15 sultation with the entities described in clause 

16 (ii)(I) of such subsection, update the risk ad17 justment methodology applied as appropriate 

18 not less often than every 2 years. 

19 ‘‘(f) CHRONIC CARE QUALITY BONUS PAYMENTS.— 

20 ‘‘(1) DETERMINATION OF BONUS PAYMENTS.— 

21 If the Secretary determines that, based on the re22 ports under paragraph (5), with respect to cat23 egories of chronic disease for which chronic care per24 formance targets had been established under para25 graph (3) for each category of Medicaid beneficiaries 


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1 specified under subsection (b)(2) such targets have 

2 been met by a State for a reform year, the Secretary 

3 shall make an additional payment to such State in 

4 the amount specified in paragraph (6) for each quar5 ter in the succeeding reform year. Such payments 

6 shall be made in a manner specified by the Secretary 

7 and may only be used consistent with subsection 

8 (a)(3). 

9 ‘‘(2) IDENTIFICATION OF CATEGORIES OF

10 CHRONIC DISEASE.—The Secretary shall determine 

11 the categories of chronic disease for which bonus 

12 payments may be available under this subsection for 

13 each category of Medicaid beneficiaries. 

14 ‘‘(3) ADOPTION OF QUALITY MEASUREMENT

15 SYSTEM AND IDENTIFICATION OF PERFORMANCE

16 TARGETS.— 

17 ‘‘(A) SYSTEM AND DATA.—With respect to 

18 the categories of chronic disease under para19 graph (2), the Secretary shall adopt a quality 

20 measurement system that uses data described 

21 in paragraph (4) and is similar to the Five-Star 

22 Quality Rating System used to indicate the per23 formance of Medicare Advantage plans under 

24 part C of title XVIII. 


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1 ‘‘(B) TARGETS.—Using such system and 

2 data, the Secretary shall establish for each re3 form year the chronic care performance targets 

4 for purposes of the payments under paragraph 

5 (1). Such performance targets shall be estab6 lished in consultation with States, associations 

7 representing individuals with chronic illnesses, 

8 entities providing treatment to such individuals 

9 for such chronic illnesses, and other stake10 holders, including the National Association of 

11 Medicaid Directors and the National Governors 

12 Association. 

13 ‘‘(4) DATA TO BE USED.—The data to be used 

14 under paragraph (3) shall include— 

15 ‘‘(A) data collected through methods such 

16 as— 

17 ‘‘(i) the ‘Healthcare Effectiveness 

18 Data and Information Set’ (also known as 

19 ‘HEDIS’) (or an appropriate successor 

20 performance measurement tool); 

21 ‘‘(ii) the ‘Consumer Assessment of 

22 Healthcare Providers and Systems’ (also 

23 known as ‘CAHPS’) (or an appropriate 

24 successor performance measurement tool); 

25 and 


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1 ‘‘(iii) the ‘Health Outcomes Survey’ 

2 (also known as ‘HOS’) (or an appropriate 

3 successor performance measurement tool); 

4 and 

5 ‘‘(B) other data collected by the State. 

6 ‘‘(5) REPORTS.— 

7 ‘‘(A) IN GENERAL.—Each State shall col8 lect, analyze, and report to the Secretary, at a 

9 frequency and in a manner to be established by 

10 the Secretary, data described in paragraph (4) 

11 that permit the Secretary to monitor the State’s 

12 performance relative to the chronic care per13 formance targets established under paragraph 

14 (3). 

15 ‘‘(B) REVIEW AND VERIFICATION.—The 

16 Secretary may review the data collected by the 

17 State under subparagraph (A) to verify the 

18 State’s analysis of such data with respect to the 

19 performance targets under paragraph (3). 

20 ‘‘(6) AMOUNT OF BONUS PAYMENTS.— 

21 ‘‘(A) IN GENERAL.—Subject to subpara22 graphs (B) and (C), with respect to each cat23 egory of Medicaid beneficiaries, in the case of 

24 a State that the Secretary determines, based on 

25 the chronic care performance targets set under 


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1 paragraph (3) for a reform year for such cat2 egory, performs— 

3 ‘‘(i) in the top five States in such cat4 egory, subject to subparagraph (C)(ii), the 

5 amount of the bonus for each quarter in 

6 the succeeding reform year shall be 10 per7 cent of the payment amount otherwise paid 

8 to the State under subsection (a) for indi9 viduals enrolled under the plan within such 

10 category; 

11 ‘‘(ii) in the next five States in such 

12 category, subject to subparagraph (C)(ii), 

13 the amount of the bonus for each such 

14 quarter shall be 5 percent of the payment 

15 amount otherwise paid to the State under 

16 subsection (a) for individuals enrolled 

17 under the plan within such category; 

18 ‘‘(iii) in the next five States in such 

19 category, subject to clauses (i) and (iii) of 

20 subparagraph (C), the amount of the 

21 bonus for each such quarter shall be 3 per22 cent of the payment amount otherwise paid 

23 to the State under subsection (a) for indi24 viduals enrolled under the plan within such 

25 category; 


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1 ‘‘(iv) in the next five States in such 

2 category, subject to clauses (i) and (iii) of 

3 subparagraph (C), the amount of the 

4 bonus for each such quarter shall be 2 per5 cent of the payment amount otherwise paid 

6 to the State under subsection (a) for indi7 viduals enrolled under the plan within such 

8 category; and 

9 ‘‘(v) in the next five States in such 

10 category, subject to clauses (i) and (iii) of 

11 subparagraph (C), the amount of the 

12 bonus for each such quarter shall be 1 per13 cent of the payment amount otherwise paid 

14 to the State under subsection (a) for indi15 viduals enrolled under the plan within such 

16 category. 

17 ‘‘(B) AGGREGATE ANNUAL LIMIT FOR

18 EACH CATEGORY OF MEDICAID BENE19 FICIARIES.— 

20 ‘‘(i) IN GENERAL.—In no case may 

21 the aggregate amount of bonuses under 

22 this subsection for quarters in a reform 

23 year for a category of Medicaid bene24 ficiaries exceed the limit specified in clause 

25 (ii) for the reform year. 


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1 ‘‘(ii) LIMIT.—The limit specified in 

2 this clause— 

3 ‘‘(I) for the second reform year is 

4 equal to $250,000,000; or 

5 ‘‘(II) for a subsequent reform 

6 year is equal to the limit specified in 

7 this clause for the previous reform 

8 year increased by the per beneficiary 

9 percentage increase determined under 

10 paragraph (1)(E) of subsection (c). 

11 ‘‘(C) LIMITATION AND PRORATION OF BO12 NUSES BASED ON APPLICATION OF AGGREGATE

13 LIMIT.— 

14 ‘‘(i) NO BONUS FOR THIRD OR SUBSE15 QUENT TIERS UNLESS AGGREGATE LIMIT

16 NOT REACHED ON FIRST TWO TIERS.—No 

17 bonus shall be payable under clause (iii), 

18 (iv), or (v) of subparagraph (A) for a cat19 egory of Medicaid beneficiaries for a quar20 ter in a reform year unless the aggregate 

21 amount of bonuses under clauses (i) and 

22 (ii) of such subparagraph for such category 

23 and reform year is less than the limit spec24 ified in subparagraph (B)(ii) for the re25 form year. 


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1 ‘‘(ii) PRORATION FOR FIRST TWO

2 TIERS.—If the aggregate amount of bo3 nuses under clauses (i) and (ii) of subpara4 graph (A) for a category of Medicaid bene5 ficiaries for quarters in a reform year ex6 ceeds the limit specified in subparagraph 

7 (B)(ii) for the reform year, the amount of 

8 each such bonus shall be prorated in a 

9 manner so the aggregate amount of such 

10 bonuses is equal to such limit. 

11 ‘‘(iii) PRORATION FOR NEXT THREE

12 TIERS.—If the aggregate amount of bo13 nuses under clauses (i) and (ii) of subpara14 graph (A) for a category of Medicaid bene15 ficiaries for quarters in a reform year is 

16 less than the limit specified in subpara17 graph (B)(ii) for the reform year, but the 

18 aggregate amount of bonuses under clauses 

19 (i) through (v) of subparagraph (A) for the 

20 category and such quarters in the reform 

21 year exceeds the limit specified in subpara22 graph (B)(ii) for the reform year, the 

23 amount of each bonus in clauses (iii), (iv), 

24 and (v) of subparagraph (A) shall be pro25 rated in a manner so the aggregate 


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1 amount of all the bonuses under subpara2 graph (A) is equal to such limit. 

3 ‘‘(g) STATE OPTION FOR RECEIVING MEDICARE PAY4 MENTS FOR FULL-BENEFIT DUAL ELIGIBLE INDIVID5 UALS.— 

6 ‘‘(1) IN GENERAL.—Under this subsection a 

7 State may elect for quarters beginning on or after 

8 the implementation date in a reform year to receive 

9 payment from the Secretary under paragraph (3). 

10 As a condition of receiving such payment, the State 

11 shall agree to provide to full-benefit dual eligible in12 dividuals eligible for medical assistance under the 

13 State plan— 

14 ‘‘(A) the medical assistance to which such 

15 eligible individuals would otherwise be entitled 

16 under this title; and 

17 ‘‘(B) any items and services which such eli18 gible individuals would otherwise receive under 

19 title XVIII. 

20 ‘‘(2) PROVIDER PAYMENT REQUIREMENT.— 

21 ‘‘(A) IN GENERAL.—A State electing the 

22 option under this subsection shall provide pay23 ment to health care providers for the items and 

24 services described under paragraph (1)(B) at a 

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1 ments would be made to such providers for such 

2 items and services under title XVIII. 

3 ‘‘(B) FLEXIBILITY IN PAYMENT METH4 ODS.—Nothing in subparagraph (A) shall be 

5 construed as preventing a State from using al6 ternative payment methodologies (such as bun7 dled payments or the use of accountable care 

8 organizations (as such term is used in section 

9 1899)) for purposes of making payments to 

10 health care providers for items and services pro11 vided to dual eligible individuals in the State 

12 under the option under this subsection. 

13 ‘‘(3) PAYMENTS TO STATES IN LIEU OF MEDI14 CARE PAYMENTS.—With respect to a full-benefit 

15 dual eligible individual, in the case of a State that 

16 elects the option under paragraph (1) for quarters in 

17 a reform year— 

18 ‘‘(A) the Secretary shall not make any pay19 ment under title XVIII for items and services 

20 furnished to such individual for such quarters; 

21 and 

22 ‘‘(B) the Secretary shall pay to the State, 

23 in addition to the amounts paid to such State 

24 under subsection (a), the amount that the Sec25 retary would, but for this subsection, otherwise 


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1 pay under title XVIII for items and services 

2 furnished to such an individual in such State 

3 for such quarters. 

4 ‘‘(4) FULL-BENEFIT DUAL ELIGIBLE INDI5 VIDUAL DEFINED.—In this subsection, the term 

6 ‘full-benefit dual eligible individual’ means an indi7 vidual who meets the requirements of section 

8 1935(c)(6)(A)(ii). 

9 ‘‘(h) AUDITS.—The Secretary shall conduct such au10 dits on the number and classification of Medicaid bene11 ficiaries under such subsections and expenditures under 

12 this section as may be necessary to ensure appropriate 

13 payments under this section. 

14 ‘‘(i) TREATMENT OF WAIVERS.— 

15 ‘‘(1) NO IMPACT ON CURRENT WAIVERS.—In 

16 the case of a waiver of requirements of this title pur17 suant to section 1115 or other law that is in effect 

18 as of the date of the enactment of this section, noth19 ing in this section shall be construed to affect such 

20 waiver for the period of the waiver as approved as 

21 of such date. 

22 ‘‘(2) APPLICATION OF BUDGET NEUTRALITY TO

23 SUBSEQUENT WAIVERS AND RENEWALS TAKING SEC24 TION INTO ACCOUNT.—In the case of a waiver of re25 quirements of this title pursuant to section 1115 or 


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1 other law that is approved or renewed after the date 

2 of the enactment of this section, to the extent that 

3 such approval or renewal is conditioned upon a dem4 onstration of budget neutrality, budget neutrality 

5 shall be determined taking into account the applica6 tion of this section. 

7 ‘‘(j) REPORT TO CONGRESS.—Not later than Janu8 ary 1 of the second reform year, the Secretary shall submit 

9 to Congress a report on the implementation of this section. 

10 ‘‘(k) DEFINITIONS.—In this section: 

11 ‘‘(1) IMPLEMENTATION DATE.—The term ‘im12 plementation date’ means— 

13 ‘‘(A) July 1, 2025, if this section is en14 acted on or before July 1, 2024; or 

15 ‘‘(B) July 1, 2026, if this section is en16 acted after July 1, 2024. 

17 ‘‘(2) REFORM YEARS.— 

18 ‘‘(A) The term ‘reform year’ means a fiscal 

19 year beginning with the first reform year. 

20 ‘‘(B) The term ‘first reform year’ means 

21 the fiscal year in which the implementation date 

22 occurs. 

23 ‘‘(C) The terms ‘second’, ‘third’, and suc24 cessive similar terms mean, with respect to a 

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1 form year, respectively, succeeding the first re2 form year.’’. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) CONTINUED APPLICATION OF CLAWBACK

5 PROVISIONS.— 

6 (A) CONTINUED APPLICATION.—Sub7 sections (a) and (c)(1)(C) of section 1935 of 

8 such Act (42 U.S.C. 1396u–5) are each amend9 ed by inserting ‘‘or 1903A(a)’’ after ‘‘1903(a)’’. 

10 (B) TECHNICAL AMENDMENT.—Section 

11 1935(d)(1) of the Social Security Act (42 

12 U.S.C. 1396u–5(d)(1)) is amended by inserting 

13 ‘‘except as provided in section 1903A(g)’’ after 

14 ‘‘any other provision of this title’’. 

15 (2) PAYMENT RULES UNDER SECTION 1903.— 

16 (A) Section 1903(a) of the Social Security 

17 Act (42 U.S.C. 1396b(a)) is amended, in the 

18 matter before paragraph (1), by inserting ‘‘and 

19 section 1903A’’ after ‘‘except as otherwise pro20 vided in this section’’. 

21 (B) Section 1903(d) of such Act (42 

22 U.S.C. 1396b(d)) is amended— 

23 (i) in paragraph (1), by inserting 

24 ‘‘and under section 1903A’’ after ‘‘sub25 sections (a) and (b)’’; 


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1 (ii) in paragraph (2)— 

2 (I) in subparagraph (A), by in3 serting ‘‘or section 1903A’’ after ‘‘was 

4 made under this section’’; and 

5 (II) in subparagraph (B), by in6 serting ‘‘or section 1903A’’ after 

7 ‘‘under subsection (a)’’; 

8 (iii) in paragraph (4)— 

9 (I) by striking ‘‘under this sub10 section’’ and inserting ‘‘, with respect 

11 to this section or section 1903A, 

12 under this subsection’’; and 

13 (II) by striking ‘‘under this sec14 tion’’ and inserting ‘‘under the respec15 tive section’’; and 

16 (iv) in paragraph (5), by inserting ‘‘or 

17 section 1903A’’ after ‘‘overpayment under 

18 this section’’. 

19 (3) CONFORMING WAIVER AUTHORITY.—Section 

20 1115(a)(2)(A) of the Social Security Act (42 U.S.C. 

21 1315(a)(2)(A)) is amended by striking ‘‘or 1903’’ 

22 and inserting ‘‘1903, or 1903A’’. 

23 (4) REPORT ON ADDITIONAL CONFORMING

24 AMENDMENTS NEEDED.—Not later than 6 months 

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1 retary of Health and Human Services shall submit 

2 to Congress a report that includes a description of 

3 any additional technical and conforming amend4 ments to law that are required to properly carry out 

5 this Act. 

6 SEC. 402. INCOME LIMITATIONS FOR REFUNDABLE CRED7 ITS FOR COVERAGE UNDER A QUALIFIED 

8 HEALTH PLAN. 

9 (a) IN GENERAL.—Subparagraphs (A) and (B) of 

10 section 36B(c)(1) of the Internal Revenue Code of 1986 

11 are amended by inserting after ‘‘100 percent’’ each place 

12 such term appears the following: ‘‘(or, in the case of a 

13 taxpayer enrolled through an Exchange utilized by such 

14 State that makes the election described in section 1903A 

15 of the Social Security Act, the percentage established by 

16 such State under part A of title IV of such Act for pur17 poses of eligibility under title XIX of such Act as of Janu18 ary 1, 2009)’’. 

19 (b) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply with respect to taxable years begin21 ning after the date of the enactment of this Act. 

22 SEC. 403. MEDICAID ELIGIBILITY DETERMINATIONS. 

23 (a) STATE FLEXIBILITY TO USE CONTRACTORS TO

24 MAKE ELIGIBILITY DETERMINATIONS ON BEHALF OF

25 STATE.—Section 1902(a)(5) of the Social Security Act 


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1 (42 U.S.C. 1396a(a)(5)) is amended by inserting before 

2 the semicolon at the end the following: ‘‘, but such deter3 minations of eligibility may be made, at the option of a 

4 State, under a contract with another State or local agency 

5 or a contractor so long as the contract does not provide 

6 incentives for the agency or contractor to delay eligibility 

7 determinations or to deny eligibility for individuals other8 wise eligible for medical assistance’’. 

9 (b) FREQUENCY OF ELIGIBILITY REDETERMINA10 TIONS.—Section 1902(e)(14) of the Social Security Act 

11 (42 U.S.C. 1396a(e)(14)) is amended by adding at the 

12 end the following: 

13 ‘‘(L) FREQUENCY OF ELIGIBILITY REDE14 TERMINATIONS.—Beginning on October 1, 

15 2024, and notwithstanding subparagraph (H), 

16 in the case of an individual whose eligibility for 

17 medical assistance under the State plan under 

18 this title (or a waiver of such plan) is deter19 mined based on the application of modified ad20 justed gross income under subparagraph (A) 

21 and who is so eligible on the basis of clause 

22 (i)(VIII), (ii)(XX), or (ii)(XXIII) of subsection 

23 (a)(10)(A), at the option of the State, the State 

24 plan may provide that the individual’s eligibility 

25 shall be redetermined every 6 months (or such 


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1 shorter number of months as the State may 

2 elect).’’. 

3 SEC. 404. LOWERING SAFE HARBOR THRESHOLD WITH RE4 SPECT TO STATE TAXES ON HEALTH CARE 

5 PROVIDERS. 

6 Section 1903(w)(4)(C)(ii) of the Social Security Act 

7 (42 U.S.C. 1396b(w)(4)(C)(ii)) is amended— 

8 (1) by striking ‘‘of fiscal years beginning’’ and 

9 inserting ‘‘of fiscal years— 

10 ‘‘(I) beginning’’; and 

11 (2) by striking ‘‘it appears.’’ and inserting the 

12 following: ‘‘it appears; 

13 ‘‘(II) beginning on or after January 1, 

14 2025, and before January 1, 2034, ‘4 percent’ 

15 shall be substituted for ‘6 percent’ each place it 

16 appears; 

17 ‘‘(III) beginning on or after January 1, 

18 2034, and before January 1, 2039, ‘3 percent’ 

19 shall be substituted for ‘6 percent’ each place it 

20 appears; 

21 ‘‘(IV) beginning on or after January 1, 

22 2039, and before January 1, 2044, ‘2 percent’ 

23 shall be substituted for ‘6 percent’ each place it 

24 appears; 


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1 ‘‘(V) beginning on or after January 1, 

2 2044, and before January 1, 2049, ‘1 percent’ 

3 shall be substituted for ‘6 percent’ each place it 

4 appears; and 

5 ‘‘(VI) beginning on or after January 1, 

6 2049, ‘0 percent’ shall be substituted for ‘6 per7 cent’ each place it appears.’’. 

8 SEC. 405. PROVIDING FOR STATE APPROVAL AND IMPLE9 MENTATION OF SPECIFIED WAIVERS UNDER 

10 THE MEDICAID PROGRAM. 

11 Section 1115 of the Social Security Act (42 U.S.C. 

12 1315) is amended— 

13 (1) in subsection (d)— 

14 (A) in paragraph (1), by striking ‘‘An ap15 plication’’ and inserting ‘‘Subject to paragraph 

16 (4), an application’’; and 

17 (B) by adding at the end the following new 

18 paragraph: 

19 ‘‘(4)(A) An experimental, pilot, or demonstra20 tion project undertaken under subsection (a) may be 

21 approved or renewed by a State if such project is de22 scribed in subparagraph (B). 

23 ‘‘(B) An experimental, pilot, or demonstration 

24 project is described in this subparagraph if such 

25 project provides for a waiver of requirements with 


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1 respect to a State plan (or a waiver of such plan) 

2 under title XIX such that— 

3 ‘‘(i) individuals enrolled under such plan 

4 (or such waiver) may elect to participate in 

5 such project with respect to a year; and 

6 ‘‘(ii) such individuals who elect to so par7 ticipate are furnished with primary care serv8 ices (as described in section 223(c)(1)(D)(ii)(I) 

9 of the Internal Revenue Code of 1986) through 

10 a direct primary care service arrangement (as 

11 defined in such section). 

12 ‘‘(C) For purposes of a State’s approval or re13 newal of an experimental, pilot, or demonstration 

14 project under subparagraph (A), each reference to 

15 ‘the Secretary’ in subsection (a) shall be deemed to 

16 be a reference to ‘the State’.’’; and 

17 (2) in subsection (e), by inserting ‘‘(other than 

18 such a project that is described in paragraph 

19 (4)(B))’’ before the period at the end. 

20 SEC. 406. DEDUCTION FOR QUALIFIED CHARITY CARE. 

21 (a) IN GENERAL.—Part VI of subchapter B of chap22 ter 1 of the Internal Revenue Code of 1986 is amended 

23 by adding at the end the following new section: 


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1 ‘‘SEC. 199B. QUALIFIED CHARITY CARE. 

2 ‘‘(a) IN GENERAL.—There shall be allowed as a de3 duction for the taxable year an amount equal to— 

4 ‘‘(1) in the case of a direct primary care physi5 cian, an amount equal to the sum of— 

6 ‘‘(A) the fee (as published on a publicly 

7 available website of such physician) for physi8 cians’ services that are qualified charity care 

9 furnished by such taxpayer during such year, 

10 and 

11 ‘‘(B) for each visit by a patient to such 

12 physician during which qualified charity care is 

13 furnished, half of so much of the lowest sub14 scription fee of such physician that is attrib15 utable to a month, and 

16 ‘‘(2) in the case of any other individual, the un17 reimbursed Medicare-based value of qualified charity 

18 care furnished by such taxpayer during such year. 

19 ‘‘(b) DEFINITIONS.—For purposes of this section: 

20 ‘‘(1) UNREIMBURSED MEDICARE-BASED

21 VALUE.—The term ‘unreimbursed Medicare-based 

22 value’ means, with respect to physicians’ services, 

23 the amount payable for such services under the phy24 sician fee schedule established under section 1848 of 

25 the Social Security Act. 


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1 ‘‘(2) QUALIFIED CHARITY CARE.—The term 

2 ‘qualified charity care’ means physicians’ services 

3 that are furnished— 

4 ‘‘(A) without expectation of reimburse5 ment, and 

6 ‘‘(B) to an individual enrolled— 

7 ‘‘(i) under a State plan under title 

8 XIX of the Social Security Act (or a waiv9 er of such plan), or 

10 ‘‘(ii) under a State child health plan 

11 under title XXI of the Social Security Act 

12 (or a waiver of such plan). 

13 ‘‘(3) DIRECT PRIMARY CARE PHYSICIAN.—The 

14 term ‘direct primary care physician’ means a physi15 cian (as defined in section 1861(r) of the Social Se16 curity Act) who provides primary care— 

17 ‘‘(A) to individuals who have paid a peri18 odic subscription fee, and 

19 ‘‘(B) in exchange for a fee that is pub20 lished on a publicly available website of such 

21 physician. 

22 ‘‘(4) PHYSICIANS’ SERVICES.—The term ‘physi23 cians’ services’ has the meaning given such term by 

24 section 1861(q) of the Social Security Act. 


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1 ‘‘(c) LIMITATION.—The amount allowed as a deduc2 tion under subsection (a) for a taxable year shall not ex3 ceed the gross receipts attributable to physicians’ services 

4 furnished by the taxpayer during the taxable year.’’. 

5 (b) CLERICAL AMENDMENT.—The table of sections 

6 for part VI of subchapter B of chapter 1 of the Internal 

7 Revenue Code of 1986 is amended by adding at the end 

8 the following new item: 

‘‘Sec. 199B. Qualified charity care.’’. 

9 Subtitle B—Medicare Reforms 

10 SEC. 411. OFF-CAMPUS PROVIDER-BASED DEPARTMENT 

11 MEDICARE SITE NEUTRAL PAYMENT. 

12 (a) IN GENERAL.—Section 1834 of the Social Secu13 rity Act (42 U.S.C. 1395m) is amended by adding at the 

14 end the following new subsection: 

15 ‘‘(x) OFF-CAMPUS PROVIDER-BASED DEPARTMENT

16 MEDICARE SITE NEUTRAL PAYMENT.— 

17 ‘‘(1) IN GENERAL.—With respect to items and 

18 services furnished in an off-campus provider-based 

19 department, payment under this section for such 

20 items and services shall be the amount determined 

21 under the fee schedule under section 1848 for such 

22 items and services furnished if furnished in a physi23 cian office setting. 

24 ‘‘(2) OFF-CAMPUS PROVIDER-BASED DEPART25 MENT.—For purposes of this subsection, the term 


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1 ‘off-campus provider-based department’ has such 

2 meaning as specified by the Secretary.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 subsection (a) shall apply with respect to items and serv5 ices furnished on or after January 1, 2025. 

6 SEC. 412. ELIMINATING FEHBP ELIGIBILITY FOR ANNU7 ITANTS. 

8 Section 8905(b) of title 5, United States Code, is 

9 amended— 

10 (1) in the matter preceding paragraph (1), by 

11 striking ‘‘An’’ and inserting ‘‘Consistent with the 

12 last sentence of this subsection, an’’; and 

13 (2) by adding at the end the following: ‘‘. An 

14 individual who is entitled to benefits under part A 

15 of title XVIII of the Social Security Act (42 U.S.C. 

16 1395c et seq.) by reason of section 226 or 226A of 

17 such Act (42 U.S.C. 426, 426–1), or otherwise eligi18 ble to enroll under such part pursuant to section 

19 1818 or 1818A of such Act (42 U.S.C. 1395i–2, 

20 1395i–2a), and who first becomes an annuitant after 

21 the date of enactment of this sentence may not con22 tinue enrollment in any health benefits plan under 

23 this chapter.’’. 


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1 SEC. 413. ELIMINATION OF MEDICARE ELIGIBILITY FOR 

2 CERTAIN INDIVIDUALS. 

3 (a) ENROLLMENT PROHIBITION.— 

4 (1) PART B.—Section 1836 of the Social Secu5 rity Act (42 U.S.C. 1395o) is amended by striking 

6 the period at the end and inserting ‘‘, except that an 

7 individual who attains age 65 on or after January 

8 1, 2032, and is an individual who, upon attaining 

9 such age, has earned $10,000,000 or more in life10 time wages, shall not be eligible to so enroll.’’. 

11 (2) PART D.—Section 1860D–1(a)(3)(A) of 

12 such Act (42 U.S.C. 1395w–101(a)(3)(A)) is amend13 ed by striking the period at the end and inserting 

14 ‘‘, excluding an individual who, upon attaining age 

15 65, has earned $10,000,000 or more in lifetime 

16 wages.’’. 

17 (b) MEDIGAP.—Section 1882 of the Social Security 

18 Act (42 U.S.C. 1395ss) is amended by adding at the end 

19 the following new subsection: 

20 ‘‘(aa) ADDITIONAL LIMITATION ON NEWLY ELIGI21 BLE BENEFICIARIES.— 

22 ‘‘(1) IN GENERAL.—Notwithstanding any other 

23 provision of this section, on or after January 1, 

24 2032, a medicare supplemental policy may not be 

25 sold or issued to a targeted newly eligible Medicare 

26 beneficiary. 


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1 ‘‘(2) TARGETED NEWLY ELIGIBLE MEDICARE

2 BENEFICIARY.—For purposes of this subsection, the 

3 term ‘targeted newly eligible Medicare beneficiary’ 

4 means an individual who, upon attaining the age of 

5 65, has earned $10,000,000 or more in lifetime 

6 wages.’’. 

7 SEC. 414. MEDICARE PART D TAX DEDUCTION. 

8 (a) IN GENERAL.—Section 139A of the Internal Rev9 enue Code of 1986 is amended by adding at the end the 

10 following: ‘‘This section shall not be taken into account 

11 for purposes of determining whether any deduction is al12 lowable with respect to any cost taken into account in de13 termining such payment.’’. 

14 (b) EFFECTIVE DATE.—The amendment made by 

15 this section shall apply to taxable years beginning after 

16 December 31, 2022. 

17 SEC. 415. REPEAL OF NET INVESTMENT INCOME TAX. 

18 (a) IN GENERAL.—Subtitle A of the Internal Rev19 enue Code of 1986 is amended by striking chapter 2A. 

20 (b) EFFECTIVE DATE.—The amendment made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2024. 

23 SEC. 416. MEDICARE COVERAGE OF BAD DEBT. 

24 Section 1861(v)(1) of the Social Security Act (42 

25 U.S.C. 1395(v)(1)) is amended— 


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1 (1) in subparagraph (T)— 

2 (A) in clause (iv), by striking ‘‘and’’ at the 

3 end; 

4 (B) in clause (v)— 

5 (i) by striking ‘‘during fiscal year’’ 

6 and inserting ‘‘during fiscal years’’; 

7 (ii) by striking ‘‘or a subsequent fiscal 

8 year’’ and inserting ‘‘through 2024’’; and 

9 (iii) by striking the period at the end 

10 and inserting ‘‘, and’’; and 

11 (C) by adding at the end the following new 

12 clause: 

13 ‘‘(vi) for cost reporting periods beginning dur14 ing fiscal year 2025 or a subsequent fiscal year, by 

15 the percent applicable for cost reporting periods be16 ginning during the previous fiscal year, increased 

17 (through fiscal year 2027) by 10 percentage 

18 points.’’; 

19 (2) in subparagraph (V)— 

20 (A) in clause (i)— 

21 (i) in subclause (III), by striking 

22 ‘‘and’’ at the end; 

23 (ii) in subclause (IV)— 


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1 (I) by striking ‘‘during fiscal 

2 year’’ and inserting ‘‘during fiscal 

3 years 2017 through 2024’’; and 

4 (II) by striking the period at the 

5 end and inserting ‘‘; and’’; and 

6 (iii) by adding at the end the fol7 lowing new subclause: 

8 ‘‘(V) for cost reporting periods beginning 

9 during fiscal year 2025 or a subsequent fiscal 

10 year, the percent applicable for cost reporting 

11 periods beginning during the previous fiscal 

12 year, increased (through fiscal year 2027) by 

13 10 percentage points.’’; and 

14 (B) in clause (ii)— 

15 (i) in subclause (III), by striking 

16 ‘‘and’’ at the end; and 

17 (ii) in subclause (IV)— 

18 (I) by striking ‘‘a subsequent fis19 cal year’’ and inserting ‘‘fiscal years 

20 2015 through 2024’’; 

21 (II) by striking the period at the 

22 end and inserting ‘‘; and’’; and 

23 (III) by adding at the end the 

24 following new subclause: 


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1 ‘‘(V) for cost reporting periods beginning 

2 during fiscal year 2025 or a subsequent fiscal 

3 year, shall be reduced by the percent applicable 

4 for cost reporting periods beginning during the 

5 previous fiscal year, increased (through fiscal 

6 year 2027) by 10 percentage points.’’; and 

7 (3) in subparagraph (W)(i)— 

8 (A) in subclause (II), by striking ‘‘and’’ at 

9 the end; 

10 (B) in subclause (III)— 

11 (i) by striking ‘‘during a subsequent 

12 fiscal year’’ and inserting ‘‘during fiscal 

13 years 2015 through 2024’’; and 

14 (ii) by striking the period at the end 

15 and inserting ‘‘; and’’; and 

16 (C) by adding at the end the following new 

17 subclause: 

18 ‘‘(IV) for cost reporting periods beginning dur19 ing fiscal year 2025 or a subsequent fiscal year, by 

20 the percent applicable for cost reporting periods be21 ginning during the previous fiscal year, increased 

22 (through fiscal year 2027) by 10 percentage 

23 points.’’. 


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1 Subtitle C—Medicare Choice and 

2 Competition 

3 SEC. 421. COMPETITIVE BIDDING AND PREMIUMS UNDER 

4 UNIFIED MEDICARE. 

5 (a) IN GENERAL.—Part E of title XVIII of the Social 

6 Security Act, as added by section 101 and amended by 

7 section 103, is further amended by adding at the end the 

8 following: 

9 ‘‘Subpart 3—Competitive Bidding and Premiums 

10 ‘‘SEC. 1860E–31. APPLICATION OF COMPETITIVE BIDDING IN 

11 ENROLLMENT. 

12 ‘‘(a) IN GENERAL.—Notwithstanding any other pro13 vision of this title, the Secretary shall, beginning with plan 

14 year 2025, establish a method whereby individuals enroll15 ing under this title so enroll through an online process 

16 designed to highlight enrollment options for such individ17 uals and allow such individuals to compare costs of enroll18 ment in such options. 

19 ‘‘(b) ENROLLMENT OPTIONS.—For purposes of sub20 section (a), the Secretary shall make the following options 

21 available to individuals for enrollment under this title: 

22 ‘‘(1) Traditional fee-for-service coverage. 

23 ‘‘(2) provider-led risk-bearing plans (also known 

24 as ACOs). 

25 ‘‘(3) Medicare Advantage plans. 


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1 ‘‘(c) MEDICARE ADVANTAGE PLAN ACTUARIAL

2 VALUE REQUIREMENT.—Each Medicare Advantage plan 

3 offered through the process described in subsection (a) 

4 shall have an actuarial value equal to traditional fee-for5 service coverage under parts A and B. 

6 ‘‘(d) MA DIRECT DEPOSIT OF CERTAIN REBATES.— 

7 In the case of an Medicare Advantage plan with a bid for 

8 a year that involves a premium differential between such 

9 bid and the benchmark for such year and plan, such plan 

10 shall provide for a direct deposit of such differential if the 

11 applicable enrollee in such plan does not elect any supple12 mental coverage under such plan. 

13 ‘‘(e) ENROLLMENT IN PRESCRIPTION DRUG COV14 ERAGE.—As part of the method described in subsection 

15 (a), the Secretary shall establish a process to allow an in16 dividual to enroll in prescription drug coverage. In the 

17 case of an individual who enrolls in a Medicare Advantage 

18 plan, such coverage shall be provided under such plan. In 

19 a case of an individual who enrolls in an ACO, such cov20 erage shall be provided under such network. In the case 

21 of an individual who enrolls under traditional fee-for-serv22 ice coverage, such drug coverage shall be provided through 

23 a prescription drug plan. 

24 ‘‘(f) SUPPLEMENTAL BENEFITS.— 


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1 ‘‘(1) MA PLANS.—An MA plan is allowed to 

2 offer two different packages of supplemental benefits 

3 (these packages are available only to individuals who 

4 select such plans). 

5 ‘‘(2) ACOS.—ACOs may limit supplemental op6 tions for their enrollees to Medigap plans with con7 tractual ties. 

8 ‘‘(3) FEE-FOR-SERVICE.—Fee-for-service indi9 viduals may select supplemental coverage from 

10 Medigap policies. 

11 ‘‘SEC. 1860E–32. COMPETITION. 

12 ‘‘(a) BID AREAS.—Market areas used for bid submis13 sions for Medicare Advantage plans, ACOs, and for cal14 culation per person fee-for-services costs shall be metro15 politan statistical regions plus associated regions. 

16 ‘‘(b) PREMIUMS.—Medicare payment benchmark by 

17 market area shall be calculated based on weighted average 

18 (by enrollment in previous year) of the premium bids from 

19 MA plans, ACOs, and the per person costs of fee-for-serv20 ice, less the statutory part B premium. 

21 ‘‘(c) BENEFICIARY RESPONSIBILITY.—Beneficiaries 

22 shall pay the difference between Medicare payment and 

23 required premium of the plan they choose, and get 100 

24 percent of the savings by choosing a plan with a premium 

25 below the benchmark. 


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1 ‘‘(d) TRANSITION.—For beneficiaries who are in fee2 for-service at the time of the enactment of this section, 

3 there shall be a limit on the amount of a premium increase 

4 allowable by year of no more than $20 per month com5 pared to what such premium would have otherwise been 

6 if this subpart had not been enacted for each year through 

7 the fifth year. 

8 ‘‘(e) MULTIYEAR CONTRACTS.—A Medicare Advan9 tage plan may offer to beneficiaries multiyear contracts 

10 with guaranteed premiums over such years, bearing the 

11 risk of any change in payments from the Secretary in sub12 sequent years. A beneficiary enrolling under such a con13 tract shall be exempt from the method described in sub14 section (a).’’. 

15 (b) CONFORMING AMENDMENTS.— 

16 (1) Section 1853(a)(1)(A) of the Social Security 

17 Act is amended by striking ‘‘and section 1859(e)(4)’’ 

18 and inserting ‘‘, section 1859(e)(4), and subpart 3 

19 of part E’’. 

20 (2) Section 1853(j) of such Act is amended by 

21 inserting ‘‘and subpart 3 of part E’’ after ‘‘sub22 section (o)’’. 

23 (3) Section 1854 of such Act is amended— 

24 (A) in subsection (a), after the heading, by 

25 inserting ‘‘Subject to subpart 3 of part E:’’; 


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1 (B) in subsection (b), after the heading, by 

2 inserting ‘‘Subject to subpart 3 of part E:’’; 

3 (C) in subsection (d), after the heading, by 

4 inserting ‘‘Subject to subpart 3 of part E:’’; 

5 and 

6 (D) in subsection (e), after the heading, by 

7 inserting ‘‘Subject to subpart 3 of part E:’’. 

8 SEC. 422. NEW UNIFIED ELIGIBILITY AND ENROLLMENT 

9 RULES. 

10 (a) IN GENERAL.—Title XVIII of the Social Security 

11 Act is amended— 

12 (1) by redesignating part E as part F; and 

13 (2) by inserting after part D the following new 

14 part: 

15 ‘‘PART E—MEDICARE WITH CHOICE AND 

16 COMPETITION 

17 ‘‘Subpart 1—Opt-Out and Auto-Enrollment 

18 ‘‘SEC. 1860E–11. PART A OPT-OUT AND MA AUTO-ENROLL19 MENT. 

20 ‘‘(a) PERMITTING INDIVIDUALS TO OPT OUT OF

21 PART A COVERAGE WITHOUT LOSING SOCIAL SECURITY

22 BENEFITS.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall estab24 lish— 


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1 ‘‘(A) a process by which an individual oth2 erwise entitled to benefits under part A may 

3 elect (at a time and in a manner specified 

4 under the process) to waive such entitlement; 

5 and 

6 ‘‘(B) a process by which an individual who 

7 elects to waive such entitlement may revoke (at 

8 a time and in a manner specified under the 

9 process) such waiver. 

10 The process under subparagraph (B) shall be coordi11 nated with the enrollment process under section 

12 1837 for part B. 

13 ‘‘(2) APPLICATION OF LATE ENROLLMENT PEN14 ALTY.—An individual who revokes a waiver under 

15 paragraph (1)(B) shall be subject to a late enroll16 ment penalty as applied under section 1860E– 

17 32(c)(2)(C). 

18 ‘‘(3) NO IMPACT ON TITLE II BENEFITS.—Not19 withstanding any other provision of law, an election 

20 of an individual to waive entitlement to benefits 

21 under part A under paragraph (1)(A) shall not re22 sult in any loss of benefits under title II. 

23 ‘‘(4) DEEMED OPT-OUT.— 

24 ‘‘(A) An election of an individual to waive 

25 entitlement to benefits under part A under 


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1 paragraph (1)(A) is also deemed the filing of a 

2 notice of termination of benefits under part B 

3 pursuant to section 1838(b)(1). 

4 ‘‘(B) The termination of benefits under 

5 part B pursuant to section 1838(b) is also 

6 deemed to be a waiver of any entitlement to 

7 benefits under part A. 

8 ‘‘(b) SPECIAL OPEN ENROLLMENT PERIOD WITH9 OUT LATE ENROLLMENT PENALTY FOR CURRENT PART

10 A ONLY OR PART B ONLY ENROLLEES.—Notwith11 standing any other provision of law, in the case of an indi12 vidual who as of the general effective date, is entitled to 

13 benefits under part A but not enrolled under part B, or 

14 who is enrolled under part B but not entitled to benefits 

15 (or enrolled) under part A, beginning as of such date, such 

16 individual shall be deemed to be enrolled under part B 

17 or part A, respectively, unless such individual elects to be 

18 enrolled (or entitled to benefits) under neither of such 

19 parts during a special open enrollment period specified by 

20 the Secretary. No increase in the monthly premium of an 

21 individual pursuant to section 1839(b) or section 1818(c) 

22 shall be effected in the case of any such individual who 

23 is deemed enrolled under part B or part A pursuant to 

24 the previous sentence with respect to any period prior to 

25 the date of such enrollment. 


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1 ‘‘(c) AUTO ENROLLMENT OF DUAL ELIGIBLE INDI2 VIDUALS UNDER MEDICARE ADVANTAGE PLANS.— 

3 ‘‘(1) IN GENERAL.—Except in the case of a 

4 State that has elected the maintenance of effort op5 tion described in section 1944(b)(2), in the case of 

6 an individual described in subparagraph (A)(ii) of 

7 section 1935(c)(6) (taking into account the applica8 tion of subparagraph (B) of such section), the Sec9 retary shall establish a process for the enrollment in 

10 an MA–PD plan that is a managed care plan under 

11 part C that has a monthly beneficiary premium that 

12 does not exceed the premium assistance available 

13 under section 1860E–41(b)(1)(A). If there is more 

14 than one such plan available, the Secretary shall en15 roll such an individual on a random basis among all 

16 such plans in the PDP region. 

17 ‘‘(2) RIGHT TO DISENROLL.—Nothing in para18 graph (1) shall prevent such an individual from de19 clining enrollment in any such plan (and thereby ob20 taining coverage under Medicare fee-for-service) or 

21 from changing enrollment in such a plan to another 

22 MA–PD plan. 

23 ‘‘SEC. 1860E–12. COORDINATION WITH PART D. 

24 ‘‘(a) DEEMED ENROLLMENT UNDER PART D.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall estab2 lish a process that, beginning as of the general effec3 tive date, provides for the enrollment in a prescrip4 tion drug plan that has a monthly base beneficiary 

5 premium that does not exceed the weighted average 

6 of premiums for such plans that provide standard 

7 prescription drug coverage (as defined in section 

8 1860D–2(b)) with respect to the area involved (on 

9 a random basis among all such plans in the applica10 ble PDP region) of each Medicare enrollee (as de11 fined in section 1860E–51) who— 

12 ‘‘(A) failed to enroll in such a prescription 

13 drug plan during the applicable enrollment or 

14 coverage election period under section 1860D– 

15 1(b); and 

16 ‘‘(B) failed to elect not to enroll in such a 

17 prescription drug plan during an applicable opt18 out period described in paragraph (2). 

19 Nothing in the previous sentence shall prevent such 

20 an individual from declining or changing such enroll21 ment. Such process shall be carried out in the same 

22 manner as the process described in section 1860D– 

23 1(b)(1)(C). 

24 ‘‘(2) OPT-OUT PERIODS.—The process under 

25 paragraph (1) shall provide for the opportunity to 


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1 make an election described in subparagraph (B) of 

2 such paragraph during an opt-out period that is co3 ordinated with the relevant enrollment or coverage 

4 election period under section 1860D–1. 

5 ‘‘(3) LATE ENROLLMENT PENALTIES.—In the 

6 case of an individual who makes an election de7 scribed in paragraph (1)(B) and then enrolls in a 

8 prescription drug plan, the late enrollment penalty 

9 under section 1860D–13(b) shall apply to the 

10 monthly beneficiary premium of such individual, ex11 cept that in applying such section, any reference to 

12 the initial enrollment period of such individual shall 

13 be deemed to be a reference to the opt-out period 

14 under paragraph (2) during which the individual 

15 elected not to enroll in a prescription drug plan. 

16 ‘‘(4) NO LATE ENROLLMENT PENALTY FOR

17 CURRENT FEE-FOR-SERVICE BENEFICIARIES WITH18 OUT DRUG COVERAGE.—In the case of an individual 

19 who is a Medicare enrollee before the date of enact20 ment of this section and who was not enrolled under 

21 a prescription drug plan before being enrolled under 

22 such a plan pursuant to paragraph (1), there shall 

23 be no increase in the base beneficiary premium of an 

24 individual under section 1860D–13 by a late enroll25 ment penalty under subsection (b) of such section 


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1 with respect to any period prior to the date of such 

2 enrollment. 

3 ‘‘(b) REFERENCE TO REQUIRED PRESCRIPTION

4 DRUG COVERAGE UNDER PART C.—For provision requir5 ing coverage under MA plans to include prescription drug 

6 coverage, see section 1860E–26.’’. 

7 (b) LIMITATION ON MEDICAID BENEFITS FOR FULL8 BENEFIT DUAL ELIGIBLE INDIVIDUALS.—Section 1902 

9 of the Social Security Act (42 U.S.C. 1396a) is amended 

10 by adding at the end the following new subsection: 

11 ‘‘(ll) LIMITATION ON BENEFITS FOR FULL-BENEFIT

12 DUAL ELIGIBLE INDIVIDUALS.—Effective as of the gen13 eral effective date (as specified in section 1860E–62), ex14 cept in the case of a State which has elected the option 

15 described in section 1944(b)(2), in the case of an indi16 vidual described in subparagraph (A)(ii) of section 

17 1935(c)(6) (taking into account the application of sub18 paragraph (B) of such section), notwithstanding any other 

19 provision of law, medical assistance shall not be available 

20 under this title for any items and services for which pay21 ment may be made under title XVIII.’’. 

22 (c) MEDICAID MAINTENANCE OF EFFORT AND AL23 TERNATIVES.—Title XIX of the Social Security Act is 

24 amended by inserting after section 1943 the following new 

25 section: 


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1 ‘‘MAINTENANCE OF EFFORT OPTIONS FOR FULL-BENEFIT

2 DUAL ELIGIBLE INDIVIDUALS

3 ‘‘SEC. 1944. (a) IN GENERAL.—Effective as of the 

4 general effective date (as specified in section 1860E–62), 

5 a State shall elect, in a form and manner specified by the 

6 Secretary, a maintenance of effort option described in sub7 section (b). In the case of a State that fails to make such 

8 an election, the State shall be deemed to have elected the 

9 option described in subsection (b)(3). 

10 ‘‘(b) MAINTENANCE OF EFFORT OPTIONS DE11 SCRIBED.—The following are maintenance of effort op12 tions described in this subsection for a State, which shall 

13 apply to all individuals described in subparagraph (A)(ii) 

14 of section 1935(c)(6) (taking into account the application 

15 of subparagraph (B) of such section) for such State: 

16 ‘‘(1) ENROLLMENT OF DUAL ELIGIBLES IN

17 COMPREHENSIVE MEDICAID MANAGED CARE PLAN.— 

18 ‘‘(A) IN GENERAL.—The State enrolls all 

19 such individuals in a comprehensive Medicaid 

20 managed care plan offered by a managed care 

21 entity under section 1932. 

22 ‘‘(B) PAYMENT OF SUBSIDY AMOUNT TO

23 STATE.—In the case of a State that elects the 

24 option under this paragraph with respect to an 

25 individual, the Secretary established under secVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00435 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 tion 1860E–51 shall pay to the State the same 

2 amount that the individual would be entitled to 

3 have paid as an income-related premium sub4 sidy under section 1860E–41(b)(1)(A) plus the 

5 amount that the Secretary estimates would 

6 have been paid with respect to the individual 

7 under part D (including the actuarial value of 

8 subsidy payments under sections 1860D–13 

9 and 1860D–14). Such payment shall be made 

10 in appropriate part from the Federal Hospital 

11 Insurance Trust Fund under section 1817 and 

12 the Federal Supplementary Medical Insurance 

13 Trust Fund under section 1841. 

14 ‘‘(C) RELATION TO PART D RULES.—In 

15 the case of a State that has elected the option 

16 under this paragraph, notwithstanding any 

17 other provision of law— 

18 ‘‘(i) the coverage provided under this 

19 option shall be in lieu of any coverage that 

20 may otherwise be provided under part D; 

21 and 

22 ‘‘(ii) the payment to the State under 

23 subparagraph (B) shall be in lieu of any 

24 payments otherwise made with respect to 

25 such individual under such part. 


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1 ‘‘(2) OTHER INNOVATIVE ALTERNATIVES.— 

2 ‘‘(A) IN GENERAL.—The State submits to 

3 the Secretary, and has approved by the Sec4 retary, an innovative alternative proposal relat5 ing to coordinating coverage of such individuals 

6 under Medicare and the State plan under title 

7 XIX. 

8 ‘‘(B) PROCESS FOR REVIEW.—With re9 spect to proposals submitted to the Secretary 

10 under subparagraph (A), the Secretary shall ap11 prove such a proposal if the State demonstrates 

12 with respect to the proposal that— 

13 ‘‘(i) there would be no increased cost 

14 to the Federal Government if it were ap15 proved; and 

16 ‘‘(ii) there would be no reduction in 

17 the quality of care provided to such indi18 viduals if the proposal were approved.’’. 

19 (d) CONFORMING AMENDMENTS.— 

20 (1) SECTION 226.—Section 226 of the Social 

21 Security Act (42 U.S.C. 426) is amended— 

22 (A) in subsection (a), in the matter pre23 ceding paragraph (1), by inserting ‘‘, subject to 

24 section 1860E–11(a)’’ after ‘‘individual who’’; 


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1 (B) in subsection (b), in the matter pre2 ceding paragraph (1), by inserting ‘‘, subject to 

3 section 1860E–11(a)’’ after ‘‘individual who’’; 

4 and 

5 (C) in subsection (c), in the matter pre6 ceding paragraph (1), by inserting ‘‘, subject to 

7 section 1860E–11(a)’’ after ‘‘subsection (a)’’. 

8 (2) SECTION 226A.—Section 226A(a) of such 

9 Act (42 U.S.C. 426–1(a)) is amended, in the matter 

10 preceding paragraph (1), by inserting ‘‘and subject 

11 to section 1860E–11(a)’’ after ‘‘or title XVIII’’. 

12 (3) SECTION 1932.—Section 1932(a)(2)(B) of 

13 the Social Security Act (42 U.S.C. 1396u– 

14 2(a)(2)(B)) is amended by striking ‘‘A State’’ and 

15 inserting ‘‘Except in the case of a State that has 

16 elected the maintenance of effort option described in 

17 section 1944(b)(2), a State’’. 

18 SEC. 423. NEW BENEFIT STRUCTURE UNDER UNIFIED 

19 MEDICARE. 

20 (a) IN GENERAL.—Part E of title XVIII of the Social 

21 Security Act, as added by section 251, is amended by add22 ing at the end the following: 


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1 ‘‘Subpart 2—Out-of-Pocket Limit 

2 ‘‘SEC. 1860E–21. OUT-OF-POCKET LIMIT. 

3 ‘‘(a) IN GENERAL.—Beginning with 2025, in the case 

4 of a Medicare enrollee, if the amount of the out-of-pocket 

5 cost-sharing of such enrollee for a calendar year equals 

6 or exceeds the catastrophic limit under subsection (b) for 

7 that year— 

8 ‘‘(1) the enrollee shall not be responsible for ad9 ditional out-of-pocket cost-sharing incurred during 

10 that year; and 

11 ‘‘(2) the Secretary shall establish procedures 

12 under which the Secretary shall, in appropriate part 

13 from the Part A Medicare FFS Account under sec14 tion 1817 and the Part B Medicare FFS Account 

15 under section 1841— 

16 ‘‘(A) pay on behalf of the enrollee the 

17 amount of the additional out-of-pocket cost18 sharing described in paragraph (1) attributable 

19 to deductibles and coinsurance described in sub20 section (c)(1); and 

21 ‘‘(B) reimburse the enrollee the amount of 

22 the additional out-of-pocket cost-sharing de23 scribed in paragraph (1) attributable to 

24 deductibles and coinsurance described in sub25 section (c)(2). 


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1 ‘‘(b) CATASTROPHIC LIMIT.—The amount of the cat2 astrophic limit under this subsection for a year shall be 

3 the dollar amount in effect under section 223(c)(2)(A)(ii) 

4 of the Internal Revenue Code of 1986 for self-only cov5 erage for taxable years beginning in such year. 

6 ‘‘(c) OUT-OF-POCKET COST-SHARING DEFINED.—In 

7 this section, the term ‘out-of-pocket cost-sharing’ means, 

8 with respect to an individual, the amount of costs incurred 

9 by the individual that are attributable to— 

10 ‘‘(1) deductibles and coinsurance imposed under 

11 part A or part B; and 

12 ‘‘(2) deductibles and coinsurance imposed under 

13 standard prescription drug coverage pursuant to sec14 tion 1860D–2(b) or alternative prescription drug 

15 coverage pursuant to section 1860D–2(c) offered by 

16 a prescription drug plan.’’. 

17 (b) APPLICATION OF OUT-OF-POCKET LIMIT TO MA– 

18 PD PLANS.— 

19 (1) IN GENERAL.—Section 1852(a)(1)(B) of the 

20 Social Security Act (42 U.S.C. 1395w–22(a)(1)(B)) 

21 is amended— 

22 (A) in clause (i), by striking ‘‘clause (iii)’’ 

23 and inserting ‘‘clauses (iii) and (vi)’’; and 

24 (B) by adding at the end the following new 

25 clause: 


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1 ‘‘(vi) OUT-OF-POCKET LIMIT.—The 

2 provisions of section 1860E–21— 

3 ‘‘(I) shall apply to individuals en4 rolled under an MA–PD plan in the 

5 same manner as such provisions apply 

6 to Medicare enrollees under such sec7 tion, except that in lieu of the applica8 tion of subsection (a)(2) of such sec9 tion the MA–PD plan shall establish 

10 procedures to provide for payment of 

11 any additional out-of-pocket cost-shar12 ing described in subsection (a)(1) of 

13 such section incurred by individuals 

14 enrolled under the MA–PD plan; and 

15 ‘‘(II) as applied under subclause 

16 (I), may not be waived by application 

17 of this subparagraph. 

18 In applying subsection (b) of section 

19 1860E–21 pursuant to the previous sen20 tence, an MA–PD plan may substitute a 

21 dollar amount that is less than the dollar 

22 amount specified under such subsection.’’. 

23 (2) EXEMPTING MA–PD PLANS OFFERING AL24 TERNATIVE PRESCRIPTION DRUG COVERAGE FROM

25 PART D DEDUCTIBLE AND OUT-OF-POCKET LIMIT


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1 REQUIREMENTS.—Section 1860D–2(c) of the Social 

2 Security Act (42 U.S.C. 1395w–102(c)) is amend3 ed— 

4 (A) in paragraph (2), by striking ‘‘The de5 ductible’’ and inserting ‘‘In the case of a pre6 scription drug plan, the deductible’’; and 

7 (B) in paragraph (3), by striking ‘‘The 

8 coverage provides’’ and inserting ‘‘In the case 

9 of a prescription drug plan, the coverage pro10 vides’’. 

11 (c) PRESCRIPTION DRUG PLANS REQUIRED TO RE12 PORT ENROLLEES’ OUT-OF-POCKET COST-SHARING.— 

13 Section 1860D–12(b) of the Social Security Act (42 

14 U.S.C. 1395w–112(b)) is amended by adding at the end 

15 the following new paragraph: 

16 ‘‘(7) OUT-OF-POCKET COST-SHARING RE17 PORTS.—Each contract entered into with a PDP 

18 sponsor under this part with respect to a prescrip19 tion drug plan offered by such sponsor shall require 

20 that, with respect to each claim submitted for items 

21 or services furnished to an individual enrolled under 

22 the plan pursuant to the contract, the sponsor sub23 mits to the Secretary information on the amount of 

24 out-of-pocket cost-sharing (as defined in section 


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1 1860E–23(c)) applicable to such enrollee for such 

2 items or services.’’. 

3 (d) CONFORMING AMENDMENTS.— 

4 (1) Section 1813 of the Social Security Act (42 

5 U.S.C. 1395e) is amended— 

6 (A) in subsection (a), by inserting ‘‘Subject 

7 to subpart 2 of part E:’’ before paragraph (1); 

8 and 

9 (B) in subsection (b), by inserting ‘‘Sub10 ject to subpart 2 of part E:’’ before paragraph 

11 (1). 

12 (2) Section 1833 of such Act (42 U.S.C. 1395l) 

13 is amended— 

14 (A) in subsection (a), in the matter pre15 ceding paragraph (1), by inserting ‘‘and sub16 part 2 of part E’’ after ‘‘succeeding provisions 

17 of this section’’; 

18 (B) in subsection (b), in the first sentence, 

19 by striking ‘‘Before applying’’ and inserting 

20 ‘‘Subject to subpart 2 of part E, before apply21 ing’’; 

22 (C) in subsection (c)(1), in the matter pre23 ceding subparagraph (A), by inserting ‘‘subject 

24 to subpart 2 of part E,’’ after ‘‘this part,’’; 


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1 (D) in subsection (f), by striking ‘‘In es2 tablishing’’ and inserting ‘‘Subject to subpart 2 

3 of part E, in establishing’’; and 

4 (E) in subsection (g)(1), by inserting ‘‘and 

5 subpart 2 of part E’’ and ‘‘paragraphs (4) and 

6 (5)’’. 

7 (3) Section 1882(a)(2) of such Act is amended 

8 by striking ‘‘No medicare’’ and inserting ‘‘Subject to 

9 section 1860E–24(c), no medicare’’. 

10 SEC. 424. LATE ENROLLMENT PENALTY NOT TO APPLY FOR 

11 MONTHS OF ANY HEALTH COVERAGE. 

12 (a) IN GENERAL.—Section 1839(b) of the Social Se13 curity Act (42 U.S.C. 1395r) is amended in the second 

14 sentence, by inserting before the period at the end the fol15 lowing: ‘‘or months during which the individual has any 

16 other health coverage’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 paragraph (1) shall apply for months of coverage begin19 ning after the date of the enactment of this Act. 

20 SEC. 425. MEDIGAP REFORM. 

21 Notwithstanding any provision of section 1882 of the 

22 Social Security Act (42 U.S.C. 1395ss), as of the date 

23 of the enactment of this Act, no policy may be offered 

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1 tions, if any) to all individuals eligible to enroll under such 

2 policy. 

3 SEC. 426. ACO REVISION. 

4 (a) ENROLLMENT.—Enrollment in such an ACO 

5 under such title shall be based on the method established 

6 under part E of such title. Such a network shall bear full 

7 risk in the event payments under such title do not equal 

8 or exceed liabilities under such network. 

9 (b) DIRECTION OF PAYMENT.—An ACO may direct 

10 that any payments under such title be made to a central11 ized entity rather than to an individual provider or sup12 plier. 

13 (c) BIDS.—The Secretary of Health and Human 

14 Services shall establish a process whereby such networks 

15 compete using a bidding process similar to that described 

16 in part E of such title for Medicare Advantage plans. 

17 SEC. 427. PRIMARY CARE OPTIONS. 

18 (a) SELECTION OF PRIMARY CARE PHYSICIAN.—The 

19 Secretary shall establish a mechanism under which an in20 dividual enrolled under part B of title XVIII of the Social 

21 Security Act may select such individual’s primary care 

22 physician. Such an individual shall not be liable for more 

23 than $5 for each visit to such selected physician. 

24 (b) PAYMENT TO PHYSICIAN.—A physician selected 

25 under subsection (a) shall receive a monthly fee in lieu 


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1 of any other payment under such part B for evaluation 

2 and monitoring of such individual. The Secretary shall 

3 provide a list of standardized benefits that are included 

4 in such payment, including telephone and email commu5 nications, office visits, preventive care, and vaccinations. 

6 SEC. 428. GENERAL PROVISIONS; EFFECTIVE DATE. 

7 Part E of title XVIII of the Social Security Act, as 

8 inserted by section 101(a)(2) and as previously amended, 

9 is further amended by adding at the end the following new 

10 subpart: 

11 ‘‘Subpart 5.—General Provisions 

12 ‘‘SEC. 1860E–51. APPLICABILITY; DEFINITIONS. 

13 ‘‘(a) IN GENERAL.—The provisions of this Act are 

14 superseded to the extent inconsistent with the provisions 

15 of this part. 

16 ‘‘(b) TERMINOLOGY.—For purposes of this part: 

17 ‘‘(1) MEDICARE ENROLLEE.— 

18 ‘‘(A) IN GENERAL.—The term ‘Medicare 

19 enrollee’ means— 

20 ‘‘(i) an individual entitled to (or en21 rolled for benefits) under part A and en22 rolled under part B; and 

23 ‘‘(ii) except as otherwise specified, an 

24 individual described in section 1860E– 

25 11(a)(3). 


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1 ‘‘(B) TREATMENT.—Any reference in this 

2 Act (or any other Act) in effect before the date 

3 of the enactment of this part, to an individual 

4 entitled to benefits under part A or enrolled 

5 under part B shall be deemed a reference to a 

6 Medicare enrollee. 

7 ‘‘(2) MEDICARE FEE-FOR-SERVICE.—The term 

8 ‘Medicare fee-for-service’ means the original Medi9 care fee-for-service program under parts A and B, 

10 as modified by this part, and does not include part 

11 C or part D. 

12 ‘‘(3) MEDICARE FEE-FOR-SERVICE EN13 ROLLEE.—The term ‘Medicare fee-for-service en14 rollee’ means a Medicare enrollee who is not enrolled 

15 under a Medicare Advantage plan under part C. 

16 ‘‘SEC. 1860E–61. GENERAL EFFECTIVE DATE. 

17 ‘‘Except as otherwise specified, the provisions of this 

18 part shall apply to items and services furnished on or after 

19 January 1, 2025, and to plan years beginning on or after 

20 such date (referred to in this title as the ‘general effective 

21 date’).’’. 


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1 Subtitle D—Telehealth 

2 Improvements and Expansion 

3 SEC. 431. EXPANSION OF COVERAGE OF TELEHEALTH 

4 SERVICES. 

5 (a) COVERED SERVICES.—Section 1834(m)(4)(F)(i) 

6 of the Social Security Act (42 U.S.C. 1395m(m)(4)(F)(i)) 

7 is amended— 

8 (1) by striking ‘‘and office’’ and inserting ‘‘of9 fice’’; and 

10 (2) by inserting: ‘‘respiratory services, audiology 

11 services (as defined in section 1861(ll)), outpatient 

12 therapy services (including physical therapy, occupa13 tional therapy, and speech-language pathology serv14 ices)’’ after ‘‘the Secretary)),’’. 

15 (b) PROVIDERS.—Subsection (m) of section 1834 of 

16 such Act (42 U.S.C. 1395m) is amended— 

17 (1) in paragraph (1), by striking ‘‘or a practi18 tioner (described in section 1842(b)(18)(C))’’ and 

19 inserting ‘‘, a practitioner (described in section 

20 1842(b)(18)(C)), or an applicable professional (as 

21 defined in paragraph (4)(G))’’; 

22 (2) by striking ‘‘physician or practitioner’’ each 

23 time it appears in such subsection and inserting 

24 ‘‘physician, practitioner, or applicable professional’’; 

25 (3) in paragraph (3)(A)— 


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1 (A) in the heading, by striking ‘‘PHYSI2 CIAN AND PRACTITIONER’’ and inserting ‘‘PHY3 SICIAN, PRACTITIONER, AND APPLICABLE PRO4 FESSIONAL’’; and 

5 (B) by striking ‘‘physicians or practi6 tioners’’ and inserting ‘‘physicians, practi7 tioners, or applicable professionals’’; and 

8 (4) in paragraph (4), by adding at the end the 

9 following new subparagraph: 

10 ‘‘(G) APPLICABLE PROFESSIONAL.—The 

11 term ‘applicable professional’ means, with re12 spect to services furnished on or after the date 

13 that is 6 months after the date of the enact14 ment of this subparagraph, a certified diabetes 

15 educator or licensed— 

16 ‘‘(i) respiratory therapist; 

17 ‘‘(ii) audiologist; 

18 ‘‘(iii) occupational therapist; 

19 ‘‘(iv) physical therapist; or 

20 ‘‘(v) speech language pathologist.’’. 

21 (c) HOME-BASED MONITORING SERVICES FOR CON22 GESTIVE HEART FAILURE AND CHRONIC OBSTRUCTIVE

23 PULMONARY DISEASE.— 

24 (1) COVERAGE OF REMOTE PATIENT MONI25 TORING SERVICES FOR CERTAIN CHRONIC HEALTH


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1 CONDITIONS.—Section 1861(s)(2) of the Social Se2 curity Act (42 U.S.C. 1395x(s)(2)) is amended— 

3 (A) in subparagraph (GG), by striking 

4 ‘‘and’’ at the end; 

5 (B) in subparagraph (HH), by inserting 

6 ‘‘and’’ at the end; and 

7 (C) by inserting after subparagraph (HH) 

8 the following new subparagraph: 

9 ‘‘(II) applicable remote patient monitoring 

10 services (as defined in paragraph (1)(A) of sub11 section (iii));’’. 

12 (2) SERVICES DESCRIBED.—Section 1861 of 

13 the Social Security Act (42 U.S.C. 1395x) is amend14 ed by adding at the end the following new sub15 section: 

16 ‘‘(kkk) REMOTE PATIENT MONITORING SERVICES

17 FOR CHRONIC HEALTH CONDITIONS.— 

18 ‘‘(1)(A) The term ‘applicable remote patient 

19 monitoring services’ means remote patient moni20 toring services (as defined in subparagraph (B)) fur21 nished to provide for the monitoring, evaluation, and 

22 management of an individual with a covered chronic 

23 condition (as defined in paragraph (2)), insofar as 

24 such services are for the management of such chron25 ic condition. 


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1 ‘‘(B) The term ‘remote patient monitoring serv2 ices’ means services furnished through remote pa3 tient monitoring technology (as defined in subpara4 graph (C)). 

5 ‘‘(C) The term ‘remote patient monitoring tech6 nology’ means a coordinated system that uses one or 

7 more home-based or mobile monitoring devices that 

8 automatically transmit vital sign data or information 

9 on activities of daily living and may include re10 sponses to assessment questions collected on the de11 vices wirelessly or through a telecommunications 

12 connection to a server that complies with the Fed13 eral regulations (concerning the privacy of individ14 ually identifiable health information) promulgated 

15 under section 264(c) of the Health Insurance Port16 ability and Accountability Act of 1996, as part of an 

17 established plan of care for that patient that in18 cludes the review and interpretation of that data by 

19 a health care professional. 

20 ‘‘(2) For purposes of paragraph (1), the term 

21 ‘covered chronic health condition’ means applicable 

22 conditions (as defined in and applied under section 

23 1886(q)(5)) when under chronic care management 

24 (identified as of July 1, 2015, by HCPCS code 


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1 99490 (and as subsequently modified by the Sec2 retary)). 

3 ‘‘(3)(A) Payment may be made under this part 

4 for applicable remote patient monitoring services 

5 provided to an individual during a period of up to 

6 90 days and such additional period as provided for 

7 under subparagraph (B). 

8 ‘‘(B) The 90-day period described in subpara9 graph (A), with respect to an individual, may be re10 newed by the physician who provides chronic care 

11 management to such individual if the individual con12 tinues to qualify for such management.’’. 

13 (3) PAYMENT UNDER THE PHYSICIAN FEE

14 SCHEDULE.—Section 1848 of the Social Security 

15 Act (42 U.S.C. 1395w–4) is amended— 

16 (A) in subsection (c)— 

17 (i) in paragraph (2)(B)— 

18 (I) in clause (ii)(II), by striking 

19 ‘‘and (v)’’ and inserting ‘‘(v), and 

20 (vii)’’; and 

21 (II) by adding at the end the fol22 lowing new clause: 

23 ‘‘(vii) BUDGETARY TREATMENT OF

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1 scribed in section 1861(s)(2)(II) shall not 

2 be taken into account in applying clause 

3 (ii)(II).’’; and 

4 (ii) by adding at the end the following 

5 new paragraph: 

6 ‘‘(7) TREATMENT OF APPLICABLE REMOTE PA7 TIENT MONITORING SERVICES.— 

8 ‘‘(A) In determining relative value units 

9 for applicable remote patient monitoring serv10 ices (as defined in section 1861(iii)(1)(A)), the 

11 Secretary, in consultation with appropriate phy12 sician groups, practitioner groups, and supplier 

13 groups, shall take into consideration— 

14 ‘‘(i) physician or practitioner re15 sources, including physician or practitioner 

16 time and the level of intensity of services 

17 provided, based on— 

18 ‘‘(I) the frequency of evaluation 

19 necessary to manage the individual 

20 being furnished the services; 

21 ‘‘(II) the complexity of the eval22 uation, including the information that 

23 must be obtained, reviewed, and ana24 lyzed; and 


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1 ‘‘(III) the number of possible di2 agnoses and the number of manage3 ment options that must be considered; 

4 ‘‘(ii) practice expense costs associated 

5 with such services, including the direct 

6 costs associated with installation and infor7 mation transmission, costs of remote pa8 tient monitoring technology (including 

9 equipment and software), device delivery 

10 costs, and resource costs necessary for pa11 tient monitoring and followup (but not in12 cluding costs of any related item or non13 physician service otherwise reimbursed 

14 under this title); and 

15 ‘‘(iii) malpractice expense resources. 

16 ‘‘(B) Using the relative value units deter17 mined in subparagraph (A), the Secretary shall 

18 provide for separate payment for such services 

19 and shall not adjust the relative value units as20 signed to other services that might otherwise 

21 have been determined to include such separately 

22 paid remote patient monitoring services.’’; and 

23 (B) in subsection (j)(3), by inserting 

24 ‘‘(2)(II),’’ after ‘‘health risk assessment),’’. 


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1 SEC. 432. EXPANDING THE USE OF TELEHEALTH THROUGH 

2 THE WAIVER OF CERTAIN REQUIREMENTS. 

3 (a) IN GENERAL.—Section 1834(m) of the Social Se4 curity Act (42 U.S.C. 1395m(m)) is amended— 

5 (1) in paragraph (4)(C)(i), by striking ‘‘and 

6 (7)’’ and inserting ‘‘(7), and (8)’’; and 

7 (2) by adding at the end the following: 

8 ‘‘(8) AUTHORITY TO WAIVE REQUIREMENTS

9 AND LIMITATIONS IF CERTAIN CONDITIONS MET.— 

10 ‘‘(A) IN GENERAL.—Notwithstanding the 

11 preceding provisions of this subsection, in the 

12 case of telehealth services furnished on or after 

13 January 1, 2025, the Secretary may waive any 

14 restriction applicable to payment for telehealth 

15 services under this subsection that is described 

16 in subparagraph (B), but only if the Secretary 

17 determines that such waiver would not deny or 

18 limit the coverage or provision of benefits under 

19 this title, and— 

20 ‘‘(i) the Secretary determines that the 

21 waiver is expected to reduce spending 

22 under this title without reducing the qual23 ity of care or improve the quality of pa24 tient care without increasing spending; or 

25 ‘‘(ii) the waiver would apply to tele26 health services furnished in originating 


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1 sites located in a high-need health profes2 sional shortage area (as designated pursu3 ant to section 332(a)(1)(A) of the Public 

4 Health Service Act (42 U.S.C. 

5 254e(a)(1)(A))). 

6 ‘‘(B) RESTRICTIONS DESCRIBED.—For 

7 purposes of this paragraph, restrictions applica8 ble to payment for telehealth services under 

9 paragraph (1) are— 

10 ‘‘(i) requirements relating to qualifica11 tions for an originating site under para12 graph (4)(C)(ii); 

13 ‘‘(ii) any geographic limitations under 

14 paragraph (4)(C)(i) (other than applicable 

15 State law requirements, including State li16 censure requirements); 

17 ‘‘(iii) any limitation on the type of 

18 technology used to furnish telehealth serv19 ices; 

20 ‘‘(iv) any limitation on the type of 

21 provider of services or supplier who may 

22 furnish telehealth services (other than the 

23 requirement that the provider of services 

24 or supplier is enrolled under this title); 


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1 ‘‘(v) any limitation on specific services 

2 designated as telehealth services pursuant 

3 to this subsection (provided the Secretary 

4 determines that such services are clinically 

5 appropriate to furnish remotely); or 

6 ‘‘(vi) any other limitation relating to 

7 the furnishing of telehealth services under 

8 this title identified by the Secretary. 

9 ‘‘(C) PUBLIC COMMENT.—The Secretary 

10 shall establish a process by which stakeholders 

11 may (on at least an annual basis) provide public 

12 comment for waivers under this paragraph. 

13 ‘‘(D) PERIODIC REVIEW OF WAIVERS.— 

14 The Secretary shall periodically, but not more 

15 often than every 3 years, reassess each waiver 

16 under this paragraph to determine whether the 

17 waiver continues to meet the conditions applica18 ble under subparagraph (A).’’. 

19 (b) POSTING OF INFORMATION.—Not later than 2 

20 years after the date on which a waiver under section 

21 1834(m)(8) of the Social Security Act, as added by sub22 section (a), first becomes effective, and at least biennially 

23 thereafter, the Secretary of Health and Human Services 

24 shall post on the internet website of the Centers for Medi25 care & Medicaid Services— 


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1 (1) the number of Medicare beneficiaries receiv2 ing telehealth services by reason of each waiver 

3 under such section; 

4 (2) the impact of such waivers on expenditures 

5 and utilization under title XVIII of the Social Secu6 rity Act (42 U.S.C. 1395 et seq.); and 

7 (3) other outcomes, as determined appropriate 

8 by the Secretary. 

9 SEC. 433. EXPANDING THE USE OF TELEHEALTH FOR MEN10 TAL HEALTH SERVICES. 

11 (a) IN GENERAL.—Section 1834(m) of the Social Se12 curity Act (42 U.S.C. 1395m(m)), as amended by the pre13 ceding sections, is amended— 

14 (1) in paragraph (4)(C)(i), by striking ‘‘and 

15 (8)’’ and inserting ‘‘(8), and (9)’’; and 

16 (2) by adding at the end the following: 

17 ‘‘(9) TREATMENT OF MENTAL HEALTH SERV18 ICES FURNISHED THROUGH TELEHEALTH.—The ge19 ographic requirements described in paragraph 

20 (4)(C)(i) (other than applicable State law require21 ments, including State licensure requirements) shall 

22 not apply with respect to telehealth services that are 

23 mental health services (as determined by the Sec24 retary) furnished on or after January 1, 2025, to an 

25 eligible telehealth individual at an originating site 


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1 described in paragraph (4)(C)(ii) (other than an 

2 originating site described in subclause (IX) of such 

3 paragraph).’’. 

4 (b) INCLUSION OF THE HOME AS AN ORIGINATING

5 SITE.—Section 1834(m)(4)(C)(ii)(X) of such Act (42 

6 U.S.C. 1395m(m)(4)(C)(ii)(X)) is amended by striking 

7 ‘‘paragraph (7)’’ and inserting ‘‘paragraphs (7) and (9)’’. 

8 (c) ADDITIONAL SERVICES.—As part of the imple9 mentation of the amendments made by this section, the 

10 Secretary of Health and Human Services shall consider 

11 whether additional services should be added to the services 

12 specified in paragraph (4)(F)(i) of section 1834(m) of 

13 such Act (42 U.S.C. 1395m) for authorized payment 

14 under paragraph (1) of such section. 

15 SEC. 434. USE OF TELEHEALTH IN EMERGENCY MEDICAL 

16 CARE. 

17 (a) IN GENERAL.—Section 1834(m) of the Social Se18 curity Act (42 U.S.C. 1395m(m)), as amended by the pre19 ceding sections, is amended— 

20 (1) in paragraph (4)(C)(i), by striking ‘‘and 

21 (9)’’ and inserting ‘‘(9), and (10)’’; and 

22 (2) by adding at the end the following: 

23 ‘‘(10) TREATMENT OF EMERGENCY MEDICAL

24 CARE FURNISHED THROUGH TELEHEALTH.—The 

25 geographic requirements described in paragraph 


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1 (4)(C)(i) (other than applicable State law require2 ments, including State licensure requirements) shall 

3 not apply with respect to telehealth services that are 

4 services for emergency medical care (as determined 

5 by the Secretary) furnished on or after January 1, 

6 2025, to an eligible telehealth individual at an origi7 nating site described in subclause (II), (V), or (VII) 

8 of paragraph (4)(C)(ii).’’. 

9 (b) ADDITIONAL SERVICES.—As part of the imple10 mentation of the amendments made by this section, the 

11 Secretary of Health and Human Services shall consider 

12 whether additional services should be added to the services 

13 specified in paragraph (4)(F)(i) of section 1834(m) of 

14 such Act (42 U.S.C. 1395m) for authorized payment 

15 under paragraph (1) of such section. 

16 SEC. 435. IMPROVEMENTS TO THE PROCESS FOR ADDING 

17 TELEHEALTH SERVICES. 

18 The Secretary shall undertake a review of the process 

19 established pursuant to section 1834(m)(4)(F)(ii) of the 

20 Social Security Act (42 U.S.C. 1395m(m)(4)(F)(ii)), and 

21 based on the results of such review— 

22 (1) implement revisions to the process so that 

23 the criteria to add services prioritizes, as appro24 priate, improved access to care through telehealth 

25 services; and 


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1 (2) provide clarification on what requests to 

2 add telehealth services under such process should in3 clude. 

4 SEC. 436. RURAL HEALTH CLINICS AND FEDERALLY QUALI5 FIED HEALTH CENTERS. 

6 (a) EXPANSION OF ORIGINATING SITES.—Section 

7 1834(m)(4)(C) of the Social Security Act (42 U.S.C. 

8 1395m(m)(4)(C)), as amended by the preceding sections, 

9 is amended— 

10 (1) in clause (i), by striking ‘‘and (10)’’ and in11 serting ‘‘and (10), and subject to clause (iii),’’; and 

12 (2) by adding at the end the following new 

13 clause: 

14 ‘‘(iii) RURAL HEALTH CLINICS AND

15 FEDERALLY QUALIFIED HEALTH CEN16 TERS.—The term ‘originating site’ shall 

17 also include any Federally qualified health 

18 center and any rural health clinic (as such 

19 terms are defined in section 1861(aa)) at 

20 which the eligible telehealth individual is 

21 located at the time the service is furnished 

22 via a telecommunications system, whether 

23 or not the individual is located in an area 

24 described in clause (i), insofar as such 

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1 nition of originating site under such 

2 clause, subject to applicable State law re3 quirements, including State licensure re4 quirements.’’. 

5 (b) EXPANSION OF DISTANT SITES.—Section 

6 1834(m) of the Social Security Act (42 U.S.C. 1395m(m)) 

7 is amended— 

8 (1) in the first sentence of paragraph (1)— 

9 (A) by striking ‘‘or a practitioner (de10 scribed in section 1842(b)(18)(C))’’ and insert11 ing ‘‘, a practitioner (described in section 

12 1842(b)(18)(C)), a Federally qualified health 

13 center, or a rural health clinic’’; and 

14 (B) by striking ‘‘or practitioner’’ and in15 serting ‘‘, practitioner, Federally qualified 

16 health center, or rural health clinic’’; 

17 (2) in paragraph (2)(A)— 

18 (A) by inserting ‘‘or to a Federally quali19 fied health center or rural health clinic that 

20 serves as a distant site’’ after ‘‘a distant site’’; 

21 and 

22 (B) by striking ‘‘such physician or practi23 tioner’’ and inserting ‘‘such physician, practi24 tioner, Federally qualified health center, or 

25 rural health clinic’’; and 


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1 (3) in paragraph (4)— 

2 (A) in subparagraph (A), by inserting 

3 ‘‘and includes a Federally qualified health cen4 ter or rural health clinic that furnishes a tele5 health service to an eligible individual’’ before 

6 the period at the end; and 

7 (B) in subparagraph (F), by adding at the 

8 end the following new clause: 

9 ‘‘(iii) INCLUSION OF RURAL HEALTH

10 CLINIC SERVICES AND FEDERALLY QUALI11 FIED HEALTH CENTER SERVICES FUR12 NISHED USING TELEHEALTH.—For pur13 poses of this subparagraph, the term ‘tele14 health services’ includes a rural health 

15 clinic service or Federally qualified health 

16 center service that is furnished using tele17 health to the extent that payment codes 

18 corresponding to services identified by the 

19 Secretary under clause (i) or (ii) are listed 

20 on the corresponding claim for such rural 

21 health clinic service or Federally qualified 

22 health center service.’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to services furnished on or after 

25 January 1, 2023. 


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1 SEC. 437. NATIVE AMERICAN HEALTH FACILITIES. 

2 (a) IN GENERAL.—Section 1834(m)(4)(C) of the So3 cial Security Act (42 U.S.C. 1395m(m)(4)(C)), as amend4 ed by the preceding sections, is amended— 

5 (1) in clause (i), by striking ‘‘clause (iii)’’ and 

6 inserting ‘‘clauses (iii) and (iv)’’; and 

7 (2) by adding at the end the following new 

8 clause: 

9 ‘‘(iv) NATIVE AMERICAN HEALTH FA10 CILITIES.—The originating site require11 ments described in clauses (i) and (ii) shall 

12 not apply with respect to a facility of the 

13 Indian Health Service, whether operated 

14 by such Service, or by an Indian tribe (as 

15 that term is defined in section 4 of the In16 dian Health Care Improvement Act (25 

17 U.S.C. 1603)) or a tribal organization (as 

18 that term is defined in section 4 of the In19 dian Self-Determination and Education 

20 Assistance Act (25 U.S.C. 5304)), or a fa21 cility of the Native Hawaiian health care 

22 systems authorized under the Native Ha23 waiian Health Care Improvement Act (42 

24 U.S.C. 11701 et seq.).’’. 

25 (b) NO ORIGINATING SITE FACILITY FEE FOR NEW

26 SITES.—Section 1834(m)(2)(B)(i) of the Social Security 


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1 Act (42 U.S.C. 1395m(m)(2)(B)(i)) is amended, in the 

2 matter preceding subclause (I), by inserting ‘‘(other than 

3 an originating site that is only described in clause (iv) of 

4 paragraph (4)(C), and does not meet the requirement for 

5 an originating site under clause (i) of such paragraph)’’ 

6 after ‘‘the originating site’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to services furnished on or after 

9 January 1, 2025. 

10 SEC. 438. WAIVER OF TELEHEALTH RESTRICTIONS DURING 

11 NATIONAL EMERGENCIES. 

12 Section 1135(b) of the Social Security Act (42 U.S.C. 

13 1320b–5(b)) is amended— 

14 (1) in paragraph (6), by striking ‘‘and’’ after 

15 the semicolon; 

16 (2) in paragraph (7), by striking the period at 

17 the end and inserting ‘‘; and’’; and 

18 (3) by adding at the end the following: 

19 ‘‘(8) requirements for payment for telehealth 

20 services under section 1834(m).’’. 

21 SEC. 439. USE OF TELEHEALTH IN RECERTIFICATION FOR 

22 HOSPICE CARE. 

23 (a) IN GENERAL.—Section 1814(a)(7)(D)(i) of the 

24 Social Security Act (42 U.S.C. 1395f(a)(7)(D)(i)) is 

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1 health, notwithstanding the requirements in section 

2 1834(m)(4)(C))’’ after ‘‘face-to-face encounter’’. 

3 (b) GAO REPORT.—Not later than 3 years after the 

4 date of enactment of this Act, the Comptroller General 

5 of the United States shall submit a report to Congress 

6 evaluating the impact of the amendment made by sub7 section (a) on— 

8 (1) the number and percentage of beneficiaries 

9 recertified for the Medicare hospice benefit at 180 

10 days and for subsequent benefit periods; 

11 (2) the appropriateness for hospice care of the 

12 patients recertified through the use of telehealth; 

13 and 

14 (3) any other factors determined appropriate by 

15 the Comptroller General. 

16 SEC. 440. CLARIFICATION FOR FRAUD AND ABUSE LAWS 

17 REGARDING TECHNOLOGIES PROVIDED TO 

18 BENEFICIARIES. 

19 Section 1128A(i)(6) of the Social Security Act (42 

20 U.S.C. 1320a–7a(i)(6)) is amended— 

21 (1) in subparagraph (I), by striking ‘‘; or’’ and 

22 inserting a semicolon; 

23 (2) in subparagraph (J), by striking the period 

24 at the end and inserting ‘‘; or’’; and 


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1 (3) by adding at the end the following new sub2 paragraph: 

3 ‘‘(K) the provision of technologies (as de4 fined by the Secretary) on or after the date of 

5 the enactment of this subparagraph, by a pro6 vider of services or supplier (as such terms are 

7 defined for purposes of title XVIII) directly to 

8 an individual who is entitled to benefits under 

9 part A of title XVIII, enrolled under part B of 

10 such title, or both, for the purpose of furnishing 

11 telehealth services, remote patient monitoring 

12 services, or other services furnished through the 

13 use of technology (as defined by the Secretary), 

14 if— 

15 ‘‘(i) the technologies are not offered 

16 as part of any advertisement or solicita17 tion; and 

18 ‘‘(ii) the provision of the technologies 

19 meets any other requirements set forth in 

20 regulations promulgated by the Sec21 retary.’’. 

22 SEC. 441. STUDY AND REPORT ON INCREASING ACCESS TO 

23 TELEHEALTH SERVICES IN THE HOME. 

24 (a) MEDPAC STUDY.—The Medicare Payment Advi25 sory Commission (in this section referred to as the ‘‘ComVerDate Sep 11 2014 18:20 Jan 23, 2025 Jkt 059200 PO 00000 Frm 00467 Fmt 6652 Sfmt 6201 E:\BILLS\H10409.IH H10409

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1 mission’’) shall conduct a study on increasing access under 

2 the Medicare program under title XVIII of the Social Se3 curity Act (42 U.S.C. 1395 et seq.) to telehealth services 

4 in the home. Such study shall include an analysis of the 

5 following: 

6 (1) How different payers allow the home to be 

7 an originating site for telehealth services. 

8 (2) Particular types of telehealth services or 

9 subgroups of beneficiaries with respect to which al10 lowing the home to be an originating site under the 

11 Medicare program would be suitable. 

12 (b) REPORT.—Not later than 24 months after the 

13 date of the enactment of this Act, the Commission shall 

14 submit to Congress a report containing the results of the 

15 study conducted under subsection (a), together with rec16 ommendations for such legislation and administrative ac17 tion as the Commission determines appropriate. 

18 SEC. 442. ANALYSIS OF TELEHEALTH WAIVERS IN ALTER19 NATIVE PAYMENT MODELS. 

20 The second sentence of section 1115A(g) of the So21 cial Security Act (42 U.S.C. 1315a(g)) is amended by in22 serting ‘‘an analysis of waivers under section (d)(1) re23 lated to telehealth and the impact on quality and spending 

24 under the applicable titles of such waivers,’’ after ‘‘sub25 section (c),’’. 


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1 SEC. 443. MODEL TO ALLOW ADDITIONAL HEALTH PROFES2 SIONALS TO FURNISH TELEHEALTH SERV3 ICES. 

4 Section 1115A(b)(2)(B) of the Social Security Act 

5 (42 U.S.C. 1315a(b)(2)(B)) is amended by adding at the 

6 end the following new clause: 

7 ‘‘(xxviii) Allowing health professionals 

8 who are not otherwise eligible under sec9 tion 1834(m) to furnish telehealth services 

10 to furnish such services.’’. 

11 SEC. 444. TESTING OF MODELS TO EXAMINE THE USE OF 

12 TELEHEALTH UNDER THE MEDICARE PRO13 GRAM. 

14 Section 1115A(b)(2) of the Social Security Act (42 

15 U.S.C. 1315a(b)(2)) is amended by adding at the end the 

16 following new subparagraph: 

17 ‘‘(D) TESTING MODELS TO EXAMINE USE

18 OF TELEHEALTH UNDER MEDICARE.—The Sec19 retary shall consider testing under this sub20 section models to examine the use of telehealth 

21 under title XVIII.’’. 

Æ 


ssavage on LAPJG3WLY3PROD with BILLS