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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2626 Introduced in House (IH)]

110th CONGRESS
  1st Session
                                H. R. 2626

 To provide for incentives to encourage health insurance coverage, and 
                          for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              June 7, 2007

Mr. Price of Georgia introduced the following bill; which was referred 
 to the Committee on Ways and Means, and in addition to the Committees 
 on Energy and Commerce, Education and Labor, Oversight and Government 
 Reform, and the Judiciary, 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 provide for incentives to encourage health insurance coverage, and 
                          for other purposes.

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

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

    (a) Short Title.--This Act may be cited as the ``Comprehensive 
Health Coverage And Reform Enhancement Act of 2007'' or as the 
``Comprehensive HealthCARE Act of 2007''.
    (b) Findings.--Congress finds the following:
            (1) Americans are best served by a health care system that 
        thrives on and rewards competition, choice, personal control, 
        affordability, accessibility, and quality. Now is the time to 
        initiate new policies that allow innovation to excel and that 
        respond best to patient's demands, needs, and preferences.
            (2) In 2005, health care spending in the United States 
        reached $2 trillion, and it is projected to reach $2.9 trillion 
        in 2009. Health care spending is projected to reach $4 trillion 
        by 2015.
            (3) In 2005, the total national health expenditures rose 
        6.9 percent--two times the rate of inflation. Total health care 
        spending represented 16 percent of the gross domestic product 
        (GDP).
            (4) Census data show that 46.6 million Americans were 
        uninsured at some point in 2005, an increase of 1.3 million 
        from the comparable number of uninsured in 2004 (45.3 million). 
        This percentage rose from 15.6 percent in 2004 to 15.9 percent 
        in 2005.
            (5) Lack of insurance is much more common among people with 
        low incomes. Some 24.4 percent of people with incomes below 
        $25,000 were uninsured in 2005, almost triple the rate of 8.5 
        percent among people with incomes over $75,000.
            (6) National surveys show that the primary reason people 
        are uninsured is the high cost of health insurance coverage.
            (7) The percentage of Americans who are uninsured continues 
        to rise due to a decrease of employees with employer-sponsored 
        coverage.
            (8) Premiums for employer-based health insurance rose by 
        7.7 percent in 2006. Small employers saw their premiums, on 
        average, increase 8.8 percent. Firms with less than 24 workers, 
        experienced an increase of 10.5 percent.
            (9) The average employee contribution to company-provided 
        health insurance has increased more than 143 percent since 
        2000. Average out-of-pocket costs for deductibles, co-payments 
        for medications, and co-insurance for physician and hospital 
        visits rose 115 percent during the same period.
            (10) With our current defined benefit model, employers 
        determine health benefits, dictate costs for individuals and 
        families, and hold the contract with the insurance company.
            (11) Employer-sponsored defined benefit health insurance 
        plans have led employees to believe they are receiving free 
        coverage, while economists have shown that workers forgo higher 
        wages in lieu of health benefits.
            (12) Americans pay higher prices for fewer choices under 
        our current defined benefit model.
            (13) With both government and employer provided health 
        care, there is a lack of individual ownership and personal 
        choice for patients.
            (14) There are 18 million Americans who purchase health 
        insurance on their own and currently, these individuals pay 
        higher taxes than those who get insurance through their 
        employer, due to the tax deductibility allowed to the employer 
        for the purchase pf health insurance.
            (15) Most of the incentives in our current system are 
        wrong, causing patients to frequently receive more tests and 
        procedures than needed
            (16) Health insurers would be more responsive to 
        individuals and families if health insurance policies were 
        owned by the person most directly affected by the coverage--the 
        patient.
            (17) Providing individuals and families with various 
        options to help them secure and maintain personal, defined 
        contribution coverage of their choice, would make health care 
        coverage more affordable and accessible for all Americans.
            (18) It is appropriate to encourage increased efficiency in 
        the offering of health insurance coverage through a 
        collaborative approach by the States in regulating this 
        coverage.
            (19) Individual health insurance coverage is increasingly 
        offered through the Internet, other electronic means, and by 
        mail; all of which are inherently part of interstate commerce.
            (20) The application of numerous and significant variations 
        in State law impacts the ability of insurers to offer, and 
        individuals to obtain, affordable individual health insurance 
        coverage, thereby impeding commerce in individual health 
        insurance coverage.
            (21) Our current civil justice system is adversely 
        affecting patient access to health care services, better 
        patient care, and cost-efficient health care. The health care 
        liability system is a costly and ineffective mechanism for 
        resolving claims of health care liability and appropriately 
        compensating injured patients, and is a deterrent to the 
        sharing of information among health care professionals which 
        impedes efforts to improve patient safety and quality health 
        care.
            (22) Permitting health care professionals to negotiate 
        collectively with health care plans will create a more equal 
        balance of negotiating power, will promote competition, and 
        will enhance the quality of patient care.
            (23) The benefits of an electronic healthcare information 
        system include improved quality of care, reduced costs 
        associated with medication errors, more accurate and complete 
        medical documentation, more accurate capture of codes and 
        charges, and improved communication among providers enabling 
        them to respond more quickly to patients' needs and increase 
        health care quality.
            (24) To secure access to quality health care it is 
        essential to have well trained and an appropriate number of 
        physicians and surgeons to administer that care.
            (25) Data shows that median private medical school tuition 
        and fees has increased by 50 percent (in real dollars) in the 
        20 years between 1984 and 2004. Median public medical school 
        tuition and fees increased by 133 percent over the same time 
        period.
            (26) The cost of tuition may prevent students from low-
        income or minority populations and those with other financial 
        responsibilities from attending medical school.
            (27) Students with high debt are less likely to pursue 
        family practice and primary care specialties and instead seek 
        specialties with potentially higher income or more leisure 
        time, which contributes to the physician shortages all over the 
        country.
            (28) Emergency medical care is an essential element of the 
        health care safety net.
            (29) The Emergency Medical Treatment and Labor Act 
        (``EMTALA'') requires that all patients who come to an 
        emergency department be evaluated and their emergency medical 
        conditions be stabilized, regardless of the patient's ability 
        to pay.
            (30) Nationally, more than 35 percent of emergency 
        department patients are uninsured or are Medicaid or SCHIP 
        enrollees.
            (31) Strain on emergency departments is due to multiple 
        factors, including the shortage of nurses and on-call 
        physicians, a decrease in the total number of community 
        hospitals, and high levels of bad debt incurred as a result of 
        providing care to indigent patients.
            (32) With the decline in physicians, surgeons, hospitals, 
        emergency rooms, employer-sponsored health insurance, and the 
        rising number of uninsured, the imperative for comprehensive 
        health system reform is readily apparent.
            (33) Patient access to quality care has been harmed by 
        decreasing compensation to physicians through a flawed Medicare 
        sustainable growth rate (SGR) system that fails to 
        appropriately account for severity of illness, intensity of 
        treatment, medical inflation, or costs.
            (34) Decisions regarding health care are often the most 
        personal and important made in an individual's life, however 
        these decisions are increasingly being made without appropriate 
        input by either patients or health care providers.
            (35) Fundamental reform throughout a wide array of our 
        health care system is required in order to achieve a 21st 
        century system that is innovative, responsive, affordable, 
        accessible, accountable, of the highest quality, and, above 
        all, patient-centered.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; findings; table of contents.
   TITLE I--TAX INCENTIVES FOR MAINTAINING HEALTH INSURANCE COVERAGE

Sec. 101. Refundable tax credit for health insurance costs of low-
                            income individuals.
Sec. 102. Advance payment of credit as premium payment for qualified 
                            health insurance.
Sec. 103. Deduction for qualified health insurance costs of 
                            individuals.
Sec. 104. Limitation on employer deduction for group health plan 
                            expenses.
Sec. 105. Equal employer contribution rule to promote choice.
       TITLE II--QUALITY HEALTH-CARE PROFESSIONALS COALITION ACT

Sec. 201. Short title.
Sec. 202. Application of the antitrust laws to health care 
                            professionals negotiating with health 
                            plans.
           TITLE III--INTERSTATE MARKET FOR HEALTH INSURANCE

Sec. 301. Cooperative governing of individual health insurance 
                            coverage.
   TITLE IV--HELP EFFICIENT, ACCESSIBLE, LOW-COST, TIMELY HEALTHCARE 
                          (HEALTH) ACT OF 2007

Sec. 401. Short title.
Sec. 402. Findings and purpose.
Sec. 403. Encouraging speedy resolution of claims.
Sec. 404. Compensating patient injury.
Sec. 405. Maximizing patient recovery.
Sec. 406. Additional HEALTH benefits.
Sec. 407. Punitive damages.
Sec. 408. Authorization of payment of future damages to claimants in 
                            HEALTH care lawsuits.
Sec. 409. Definitions.
Sec. 410. Effect on other laws.
Sec. 411. State flexibility and protection of States' rights.
Sec. 412. Applicability; effective date.
Sec. 413. Sense of Congress.
Sec. 414. State grants to create administrative health care tribunals.
         TITLE V--TAX CREDIT FOR HEALTH INFORMATION TECHNOLOGY

Sec. 501. Purchase of qualified health care information technology.
Sec. 502. Telecommunications credit for qualified medical care 
                            providers.
Sec. 503. Development of health care information technology standards.
                  TITLE VI--MEDICAL LIABILITY REFORMS

Sec. 601. Constitutional authority.
Sec. 602. Protection against legal liability for emergency and related 
                            services furnished to any individual.
   TITLE VII--TAX DEDUCTION FOR UNCOMPENSATED CARE IN EMERGENCY ROOMS

Sec. 701.  Bad debt deduction for doctors to partially offset the cost 
                            of providing uncompensated care required to 
                            be provided under amendments made by the 
                            Emergency Medical Treatment and Labor Act.
                     TITLE VIII--ADDITIONAL CHANGES

Sec. 801. Application of section 1115 waivers by other States.
Sec. 802. HIPAA Technical Advisory Group.
Sec. 803. Medicare physician payment update reform.
Sec. 804. Removing limitations on balance billing with beneficiary 
                            notice for highest income beneficiaries.
Sec. 805. Election of tax credit instead of alternative government 
                            benefits.
Sec. 806. Use of private contracts by medicare beneficiaries for 
                            professional services.
Sec. 807. EMTALA Technical Advisory Group.
Sec. 808. Federally-Supported Student Loan Funds for Medical Students.
Sec. 809. Establishment of performance-based quality measures.

   TITLE I--TAX INCENTIVES FOR MAINTAINING HEALTH INSURANCE COVERAGE

SEC. 101. REFUNDABLE TAX CREDIT FOR HEALTH INSURANCE COSTS OF LOW-
              INCOME INDIVIDUALS.

    (a) In General.--Subpart C of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to refundable credits) is 
amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. HEALTH INSURANCE COSTS OF LOW-INCOME INDIVIDUALS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by subtitle A the aggregate 
amount paid by the taxpayer for coverage of the taxpayer and the 
taxpayer's qualifying family members under qualified health insurance 
for eligible coverage months beginning in the taxable year.
    ``(b) Limitations.--
            ``(1) In general.--The amount allowable as a credit under 
        subsection (a) for the taxable year shall not exceed the sum of 
        the monthly limitations for months during such taxable year 
        that the taxpayer or the taxpayer's qualifying family members 
        is an eligible individual.
            ``(2) Monthly limitation.--The monthly limitation for any 
        month is the credit percentage of \1/12\ of the sum of--
                    ``(A) $4,000 for coverage of the taxpayer,
                    ``(B) in the case of a joint return, $4,000 for 
                coverage of the taxpayer's spouse, and
                    ``(C) $2,000 for coverage of each dependent of the 
                taxpayer.
            ``(3) Credit percentage.--
                    ``(A) In general.--For purposes of this section, 
                the term `credit percentage' means 90 percent reduced 
                by 1 percentage point for each $1,000 (or fraction 
                thereof) by which the taxpayer's adjusted gross income 
                for the taxable year exceeds the threshold amount.
                    ``(B) Threshold amount.--For purposes of this 
                paragraph, the term `threshold amount' means, with 
                respect to any taxpayer for any taxable year, the sum 
                of--
                            ``(i) $20,000,
                            ``(ii) in the case of a joint return, 
                        $6,000, and
                            ``(iii) $5,000 for each dependent of the 
                        taxpayer.
            ``(4) Only 2 dependents taken into account.--Not more than 
        2 dependents of the taxpayer may be taken into account under 
        paragraphs (2)(C) and (3)(B)(iii).
            ``(5) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2009, each dollar 
        amount contained in paragraph (2) or (3) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2008' for `calendar year 1992' in 
                subparagraph (B) thereof.
        Any increase determined under the preceding sentence shall be 
        rounded to the nearest multiple of $50.
    ``(c) Eligible Coverage Month.--For purposes of this section, the 
term `eligible coverage month' means, with respect to any individual, 
any month if, as of the first day of such month, the individual--
            ``(1) is covered by qualified health insurance,
            ``(2) does not have other specified coverage, and
            ``(3) is not imprisoned under Federal, State, or local 
        authority.
    ``(d) Qualifying Family Member.--For purposes of this section, the 
term `qualifying family member' means--
            ``(1) in the case of a joint return, the taxpayer's spouse, 
        and
            ``(2) any dependent of the taxpayer.
    ``(e) Qualified Health Insurance.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified health insurance' means any insurance which 
        constitutes medical care.
            ``(2) Exceptions.--Such term does not include insurance--
                    ``(A) substantially all of the coverage of which is 
                of excepted benefits described in section 9832(c); or
                    ``(B) offered in the individual market (as defined 
                in paragraph (1) of section 2791(e) of the Public 
                Health Service Act) or small group market (as defined 
                in paragraph (5) of such section) unless the insurance 
                meets the requirements of paragraph (3).
            ``(3) Insurance requirements.--For purposes of paragraph 
        (2)(B), the requirements of this paragraph with respect to 
        insurance are the following:
                    ``(A) The issuer of the insurance may not decline 
                to offer the insurance, or deny enrollment, of any 
                individual based on any factor described in section 
                9802(a)(1).
                    ``(B) The insurance conforms to standards 
                (established by the National Association of Insurance 
                Commissioners in consultation with insurance companies 
                and recognized by the Secretary) relating to each of 
                the following:
                            ``(i) Limitation on application of 
                        preexisting condition exclusions (as defined in 
                        section 9801(b)(1)).
                            ``(ii) Guaranteed renewability.
                            ``(iii) Premium ratings.
                            ``(iv) Risk-spreading.
                            ``(v) Consumer disclosures.
                            ``(vi) Information provided to States and 
                        the Federal Government.
    ``(f) Other Specified Coverage.--For purposes of this section, an 
individual has other specified coverage for any month if, as of the 
first day of such month--
            ``(1) Coverage under medicare, medicaid, or schip.--Such 
        individual--
                    ``(A) is entitled to benefits under part A of title 
                XVIII of the Social Security Act or is enrolled under 
                part B of such title, or
                    ``(B) is enrolled in the program under title XIX or 
                XXI of such Act (other than under section 1928 of such 
                Act).
            ``(2) Certain other coverage.--Such individual--
                    ``(A) is enrolled in a health benefits plan under 
                chapter 89 of title 5, United States Code, or
                    ``(B) is entitled to receive benefits under chapter 
                55 of title 10, United States Code.
    ``(g) Special Rules.--
            ``(1) Coordination with advance payments of credit; 
        recapture of excess advance payments.--With respect to any 
        taxable year--
                    ``(A) the amount which would (but for this 
                subsection) be allowed as a credit to the taxpayer 
                under subsection (a) shall be reduced (but not below 
                zero) by the aggregate amount paid on behalf of such 
                taxpayer under section 7529 for months beginning in 
                such taxable year, and
                    ``(B) the tax imposed by section 1 for such taxable 
                year shall be increased by the excess (if any) of--
                            ``(i) the aggregate amount paid on behalf 
                        of such taxpayer under section 7529 for months 
                        beginning in such taxable year, over
                            ``(ii) the amount which would (but for this 
                        subsection) be allowed as a credit to the 
                        taxpayer under subsection (a).
            ``(2) Coordination with other deductions.--Amounts taken 
        into account under subsection (a) shall not be taken into 
        account in determining--
                    ``(A) any deduction allowed under section 162(l), 
                213, or 224, or
                    ``(B) any credit allowed under section 35.
            ``(3) Medical and health savings accounts.--Amounts 
        distributed from an Archer MSA (as defined in section 220(d)) 
        or from a health savings account (as defined in section 223(d)) 
        shall not be taken into account under subsection (a).
            ``(4) Denial of credit to dependents and nonpermanent 
        resident alien individuals .--No credit shall be allowed under 
        this section to any individual who is--
                    ``(A) not a citizen or lawful permanent resident of 
                the United States for the calendar year in which the 
                taxable year begins, or
                    ``(B) a dependent with respect to another taxpayer 
                for a taxable year beginning in the calendar year in 
                which such individual's taxable year begins.
            ``(5) Insurance which covers other individuals.--For 
        purposes of this section, rules similar to the rules of section 
        213(d)(6) shall apply with respect to any contract for 
        qualified health insurance under which amounts are payable for 
        coverage of an individual other than the taxpayer and 
        qualifying family members.
            ``(6) Treatment of payments.--For purposes of this 
        section--
                    ``(A) Payments by secretary.--Payments made by the 
                Secretary on behalf of any individual under section 
                7529 (relating to advance payment of credit for health 
                insurance costs of low-income individuals) shall be 
                treated as having been made by the taxpayer on the 
                first day of the month for which such payment was made.
                    ``(B) Payments by taxpayer.--Payments made by the 
                taxpayer for eligible coverage months shall be treated 
                as having been made by the taxpayer on the first day of 
                the month for which such payment was made.
            ``(7) Regulations.--The Secretary may prescribe such 
        regulations and other guidance as may be necessary or 
        appropriate to carry out this section, section 6050W, and 
        section 7529.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or section 36'' after 
        ``section 35''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by redesignating the item relating to section 36 as 
        an item relating to section 37 and by inserting after the item 
        relating to section 35 the following new item:

``Sec. 36. Health insurance costs of low-income individuals.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 102. ADVANCE PAYMENT OF CREDIT AS PREMIUM PAYMENT FOR QUALIFIED 
              HEALTH INSURANCE.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 
(relating to miscellaneous provisions) is amended by adding at the end 
the following:

``SEC. 7529. ADVANCE PAYMENT OF CREDIT AS PREMIUM PAYMENT FOR QUALIFIED 
              HEALTH INSURANCE.

    ``Not later than January 1, 2009, the Secretary shall establish a 
program for making payments to providers of qualified health insurance 
(as defined in section 36(e)) on behalf of taxpayers eligible for the 
credit under section 36. Except as otherwise provided by the Secretary, 
such payments shall be made on the basis of the adjusted gross income 
of the taxpayer for the preceding taxable year.''.
    (b) Disclosure of Return Information for Purposes of Advance 
Payment of Credit as Premiums for Qualified Health Insurance.--
            (1) In general.--Subsection (l) of section 6103 of such 
        Code is amended by adding at the end the following new 
        paragraph:
            ``(21) Disclosure of return information for purposes of 
        advance payment of credit as premiums for qualified health 
        insurance.--The Secretary may, on behalf of taxpayers eligible 
        for the credit under section 36, disclose to a provider of 
        qualified health insurance (as defined in section 36(e)), and 
        persons acting on behalf of such provider, return information 
        with respect to any such taxpayer only to the extent necessary 
        (as prescribed by regulations issued by the Secretary) to carry 
        out the program established by section 7529 (relating to 
        advance payment of credit as premium payment for qualified 
        health insurance).''.
            (2) Confidentiality of information.--Paragraph (3) of 
        section 6103(a) of such Code is amended by striking ``or (20)'' 
        and inserting ``(20), or (21)''.
            (3) Unauthorized disclosure.--Paragraph (2) of section 
        7213(a) of such Code is amended by striking ``or (20)'' and 
        inserting ``(20), or (21)''.
    (c) Information Reporting.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of such Code (relating to information concerning 
        transactions with other persons) is amended by adding at the 
        end the following new section:

``SEC. 6050W. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE COSTS OF 
              LOW-INCOME INDIVIDUALS.

    ``(a) Requirement of Reporting.--Every person who is entitled to 
receive payments for any month of any calendar year under section 7529 
(relating to advance payment of credit as premium payment for qualified 
health insurance) with respect to any individual shall, at such time as 
the Secretary may prescribe, make the return described in subsection 
(b) with respect to each such individual.
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of each individual 
                referred to in subsection (a),
                    ``(B) the number of months for which amounts were 
                entitled to be received with respect to such individual 
                under section 7529 (relating to advance payment of 
                credit as premium payment for qualified health 
                insurance),
                    ``(C) the amount entitled to be received for each 
                such month, and
                    ``(D) such other information as the Secretary may 
                prescribe.
    ``(c) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Required.--Every person required to make a return 
under subsection (a) shall furnish to each individual whose name is 
required to be set forth in such return a written statement showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person, and
            ``(2) the information required to be shown on the return 
        with respect to such individual.
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) is required to be 
made.''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) of such 
                Code (relating to definitions) is amended by striking 
                ``or'' at the end of clause (xix), by striking ``and'' 
                at the end of clause (xx) and inserting ``or'', and by 
                inserting after clause (xx) the following new clause:
                            ``(xxi) section 6050W (relating to returns 
                        relating to credit for health insurance costs 
                        of low-income individuals), and''.
                    (B) Paragraph (2) of section 6724(d) of such Code 
                is amended by striking ``or'' at the end of 
                subparagraph (BB), by striking the period at the end of 
                subparagraph (CC) and inserting ``, or'', and by adding 
                after subparagraph (CC) the following new subparagraph:
                    ``(DD) section 6050W (relating to returns relating 
                to credit for health insurance costs of low-income 
                individuals).''.
    (d) Clerical Amendments.--
            (1) The table of sections for chapter 77 of such Code is 
        amended by adding at the end the following new item:

``Sec. 7529. Advance payment of credit as premium payment for qualified 
                            health insurance.''.
            (2) The table of sections for subpart B of part III of 
        subchapter A of chapter 61 of such Code is amended by adding at 
        the end the following new item:

``Sec. 6050W. Returns relating to credit for health insurance costs of 
                            low-income individuals.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 103. DEDUCTION FOR QUALIFIED HEALTH INSURANCE COSTS OF 
              INDIVIDUALS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions) is amended by redesignating section 224 as section 225 and 
by inserting after section 223 the following new section:

``SEC. 224. COSTS OF QUALIFIED HEALTH INSURANCE.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to the amount paid during the 
taxable year for coverage for the taxpayer, his spouse, and dependents 
under qualified health insurance.
    ``(b) Qualified Health Insurance.--For purposes of this section, 
the term `qualified health insurance' means insurance which constitutes 
medical care; except that such term shall not include any insurance if 
substantially all of its coverage is of excepted benefits described in 
section 9832(c).
    ``(c) Special Rules.--
            ``(1) Coordination with medical deduction, etc.--Any amount 
        paid by a taxpayer for insurance to which subsection (a) 
        applies shall not be taken into account in computing the amount 
        allowable to the taxpayer as a deduction under section 162(l) 
        or 213(a). Any amount taken into account in determining the 
        credit allowed under section 35 shall not be taken into account 
        for purposes of this section.
            ``(2) Deduction not allowed for self-employment tax 
        purposes.--The deduction allowable by reason of this section 
        shall not be taken into account in determining an individual's 
        net earnings from self-employment (within the meaning of 
        section 1402(a)) for purposes of chapter 2.''.
    (b) Deduction Allowed in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code is amended by inserting 
before the last sentence the following new paragraph:
            ``(22) Costs of qualified health insurance.--The deduction 
        allowed by section 224.''.
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by redesignating the 
item relating to section 224 as an item relating to section 225 and 
inserting before such item the following new item:

``Sec. 224. Costs of qualified health insurance.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 104. LIMITATION ON EMPLOYER DEDUCTION FOR GROUP HEALTH PLAN 
              EXPENSES.

    (a) In General.--Section 162 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (q) as subsection (r) and by 
inserting after subsection (o) the following new subsection:
    ``(q) Limitation on Deduction for Group Health Plan Expenses.--The 
deduction allowed for any taxable year under this section for any 
amount paid or incurred in connection with a group health plan (as 
defined in subsection (n)(3)) shall not exceed the sum of--
            ``(1) $15,000 for each contract for family coverage under 
        such plan, and
            ``(2) $7,500 for each contract for self-only coverage under 
        such plan.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2008.

SEC. 105. EQUAL EMPLOYER CONTRIBUTION RULE TO PROMOTE CHOICE.

    (a) Excise Tax for Failure To Provide Contribution Election.--
            (1) In general.--Chapter 47 of the Internal Revenue Code of 
        1986 is amended by inserting after section 5000 the following 
        new section:

``SEC. 5000A. HEALTH CARE CONTRIBUTION ELECTION.

    ``(a) Imposition of Tax.--There is hereby imposed on any employer 
or employee organization that contributes to a group health plan and 
fails to meet the requirement of subsection (b) with respect to any 
individual eligible to participate in such plan (determined under the 
terms of the plan and without regard to the election described in 
subsection (b)) a tax equal to 3 times the contribution amount with 
respect to the individual.
    ``(b) Contribution Election.--The requirement of this subsection is 
met with respect to any individual if such individual may elect to have 
the employer or employee organization pay an amount which is not less 
than the contribution amount to any provider of insurance (other than 
insurance described in section 36(e)(2)) which constitutes medical care 
of the individual or individual's spouse or dependents in lieu of any 
group health plan coverage otherwise provided or contributed to by the 
employer with respect to such individual.
    ``(c) Contribution Amount.--For purposes of this section, the term 
`contribution amount' means, with respect to an individual under a 
group health plan, the portion of the applicable premium of such 
individual under such plan (as determined under section 4980B(f)(4)) 
which is not paid by the individual.
    ``(d) Group Health Plan.--For purpose of this section, the term 
`group health plan' has the meaning given to such term by section 
5000(b)(1) and determined without regard to section 5000(d).
    ``(e) Application to FEHBP.--Notwithstanding any other provision of 
law, the Office of Personnel Management shall carry out the health 
benefits program under chapter 89 of title 5, United States Code, 
consistent with the requirements of this section.''.
            (2) Clerical amendment.--The table of sections for chapter 
        47 of such Code is amended by inserting after the item relating 
        to section 5000 the following new item:

``Sec. 5000A. Health care contribution election.''.
    (b) Requirement of Equal Contributions to All FEHBP Plans.--Section 
8906 of title 5, United States Code, is amended by adding at the end 
the following new subsection:
    ``(j) Notwithstanding the previous provisions of this section the 
Office of Personnel Management shall revise the amount of the 
Government contribution made under this section in a manner so that--
            ``(1) the amount of such contribution does not change based 
        on the health benefits plan in which the individual is 
        enrolled; and
            ``(2) the aggregate amount of such contributions is 
        estimated to be equal to the aggregate amount of such 
        contributions if this subsection did not apply.''.
    (c) ERISA Conforming Amendment.--Section 404 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1104) is amended by 
adding at the end the following new subsection:
    ``(e) An employer which provides benefits to employees consisting 
of health insurance coverage, benefits otherwise consisting of medical 
care, or both, shall not be treated as breaching any of the 
responsibilities, obligations, or duties imposed upon fiduciaries by 
this title in the case of one or more of such employees solely because 
of the extent to which the employer elects to provide, in the case of 
such one or more employees, some or all of such benefits by means of 
contributions made under an arrangement which is not a group health 
plan, irrespective of the extent to which the employer otherwise 
provides such benefits to employees under a group health plan. For 
purposes of this subsection, terms used in this subsection which are 
defined in section 733 shall have the definitions provided such terms 
in such section.''.

       TITLE II--QUALITY HEALTH-CARE PROFESSIONALS COALITION ACT

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Quality Health-Care Coalition Act 
of 2007''.

SEC. 202. APPLICATION OF THE ANTITRUST LAWS TO HEALTH CARE 
              PROFESSIONALS NEGOTIATING WITH HEALTH PLANS.

    (a) In General.--Any health care professionals who are engaged in 
negotiations with a health plan regarding the terms of any contract 
under which the professionals provide health care items or services for 
which benefits are provided under such plan shall, in connection with 
such negotiations, be entitled to the same treatment under the 
antitrust laws as the treatment to which bargaining units which are 
recognized under the National Labor Relations Act are entitled in 
connection with such collective bargaining. Such a professional shall, 
only in connection with such negotiations, be treated as an employee 
engaged in concerted activities and shall not be regarded as having the 
status of an employer, independent contractor, managerial employee, or 
supervisor.
    (b) Protection for Good Faith Actions.--Actions taken in good faith 
reliance on subsection (a) shall not be the subject under the antitrust 
laws of criminal sanctions nor of any civil damages, fees, or penalties 
beyond actual damages incurred.
    (c) Limitation.--
            (1) No new right for collective cessation of service.--The 
        exemption provided in subsection (a) shall not confer any new 
        right to participate in any collective cessation of service to 
        patients not already permitted by existing law.
            (2) No change in national labor relations act.--This 
        section applies only to health care professionals excluded from 
        the National Labor Relations Act. Nothing in this section shall 
        be construed as changing or amending any provision of the 
        National Labor Relations Act, or as affecting the status of any 
        group of persons under that Act.
    (d) 5-Year Sunset.--The exemption provided in subsection (a) shall 
only apply to conduct occurring during the 5-year period beginning on 
the date of the enactment of this Act and shall continue to apply for 1 
year after the end of such period to contracts entered into before the 
end of such period.
    (e) Limitation on Exemption.--Nothing in this section shall exempt 
from the application of the antitrust laws any agreement or otherwise 
unlawful conspiracy that excludes, limits the participation or 
reimbursement of, or otherwise limits the scope of services to be 
provided by any health care professional or group of health care 
professionals with respect to the performance of services that are 
within their scope of practice as defined or permitted by relevant law 
or regulation.
    (f) No Effect on Title VI of Civil Rights Act of 1964.--Nothing in 
this section shall be construed to affect the application of title VI 
of the Civil Rights Act of 1964.
    (g) No Application to Federal Programs.--Nothing in this section 
shall apply to negotiations between health care professionals and 
health plans pertaining to benefits provided under any of the 
following:
            (1) The Medicare Program under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.).
            (2) The Medicaid Program under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
            (3) The SCHIP program under title XXI of the Social 
        Security Act (42 U.S.C. 1397aa et seq.).
            (4) Chapter 55 of title 10, United States Code (relating to 
        medical and dental care for members of the uniformed services).
            (5) Chapter 17 of title 38, United States Code (relating to 
        Veterans' medical care).
            (6) Chapter 89 of title 5, United States Code (relating to 
        the Federal employees' health benefits program).
            (7) The Indian Health Care Improvement Act (25 U.S.C. 1601 
        et seq.).
    (h) Exemption of Abortion and Abortion Services.--Nothing in this 
section shall apply to negotiations specifically relating to requiring 
a health plan to cover abortion or abortion services.
    (i) General Accounting Office Study and Report.--The Comptroller 
General of the United States shall conduct a study on the impact of 
enactment of this section during the 12-month period beginning with the 
fifth year of the 5-year period described in subsection (d). Not later 
than the end of such 12-month period the Comptroller General shall 
submit to Congress a report on such study and shall include in the 
report such recommendations on the extension of this section (and 
changes that should be made in making such extension) as the 
Comptroller General deems appropriate.
    (j) Definitions.--For purposes of this section:
            (1) Antitrust laws.--The term ``antitrust laws''--
                    (A) has the meaning given it in subsection (a) of 
                the first section of the Clayton Act (15 U.S.C. 12(a)), 
                except that such term includes section 5 of the Federal 
                Trade Commission Act (15 U.S.C. 45) to the extent such 
                section 5 applies to unfair methods of competition; and
                    (B) includes any State law similar to the laws 
                referred to in subparagraph (A).
            (2) Health plan and related terms.--
                    (A) In general.--The term ``health plan'' means a 
                group health plan or a health insurance issuer that is 
                offering health insurance coverage.
                    (B) Health insurance coverage; health insurance 
                issuer.--The terms ``health insurance coverage'' and 
                ``health insurance issuer'' have the meanings given 
                such terms under paragraphs (1) and (2), respectively, 
                of section 733(b) of the Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1191b(b)).
                    (C) Group health plan.--The term ``group health 
                plan'' has the meaning given that term in section 
                733(a)(1) of the Employee Retirement Income Security 
                Act of 1974 (29 U.S.C. 1191b(a)(1)).
            (3) Health care professional.--The term ``health care 
        professional'' means an individual who provides health care 
        items or services, treatment, assistance with activities of 
        daily living, or medications to patients and who, to the extent 
        required by State or Federal law, possesses specialized 
        training that confers expertise in the provision of such items 
        or services, treatment, assistance, or medications.
    (k) Sense of the Congress.--It is the sense of the Congress that 
decisions regarding medical care and treatment should be made by the 
physician or health care professional in consultation with the patient.

           TITLE III--INTERSTATE MARKET FOR HEALTH INSURANCE

SEC. 301. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE 
              COVERAGE.

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

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

``SEC. 2795. DEFINITIONS.

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

``SEC. 2796. APPLICATION OF LAW.

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

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

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

``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

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

``SEC. 2799. ENFORCEMENT.

    ``(a) In General.--Subject to subsection (b), with respect to 
specific individual health insurance coverage the primary State for 
such coverage has sole jurisdiction to enforce the primary State's 
covered laws in the primary State and any secondary State.
    ``(b) Secondary State's Authority.--Nothing in subsection (a) shall 
be construed to affect the authority of a secondary State to enforce 
its laws as set forth in the exception specified in section 2796(b)(1).
    ``(c) Court Interpretation.--In reviewing action initiated by the 
applicable secondary State authority, the court of competent 
jurisdiction shall apply the covered laws of the primary State.
    ``(d) Notice of Compliance Failure.--In the case of individual 
health insurance coverage offered in a secondary State that fails to 
comply with the covered laws of the primary State, the applicable State 
authority of the secondary State may notify the applicable State 
authority of the primary State.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individual health insurance coverage offered, issued, or sold 
after the date that is one year after the date of the enactment of this 
Act.
    (c) GAO Ongoing Study and Reports.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct an ongoing study concerning the effect of the 
        amendment made by subsection (a) on--
                    (A) the number of uninsured and under-insured;
                    (B) the availability and cost of health insurance 
                policies for individuals with pre-existing medical 
                conditions;
                    (C) the availability and cost of health insurance 
                policies generally;
                    (D) the elimination or reduction of different types 
                of benefits under health insurance policies offered in 
                different States; and
                    (E) cases of fraud or abuse relating to health 
                insurance coverage offered under such amendment and the 
                resolution of such cases.
            (2) Annual reports.--The Comptroller General shall submit 
        to Congress an annual report, after the end of each of the 5 
        years following the effective date of the amendment made by 
        subsection (a), on the ongoing study conducted under paragraph 
        (1).
    (d) Severability.--If any provision of the section or the 
application of such provision to any person or circumstance is held to 
be unconstitutional, the remainder of this section and the application 
of the provisions of such to any other person or circumstance shall not 
be affected.

   TITLE IV--HELP EFFICIENT, ACCESSIBLE, LOW-COST, TIMELY HEALTHCARE 
                          (HEALTH) ACT OF 2007

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Help Efficient, Accessible, Low-
cost, Timely Healthcare (HEALTH) Act of 2007''.

SEC. 402. FINDINGS AND PURPOSE.

    (a) Findings.--
            (1) Effect on health care access and costs.--Congress finds 
        that our current civil justice system is adversely affecting 
        patient access to health care services, better patient care, 
        and cost-efficient health care, in that the health care 
        liability system is a costly and ineffective mechanism for 
        resolving claims of health care liability and compensating 
        injured patients, and is a deterrent to the sharing of 
        information among health care professionals which impedes 
        efforts to improve patient safety and quality of care.
            (2) Effect on interstate commerce.--Congress finds that the 
        health care and insurance industries are industries affecting 
        interstate commerce and the health care liability litigation 
        systems existing throughout the United States are activities 
        that affect interstate commerce by contributing to the high 
        costs of health care and premiums for health care liability 
        insurance purchased by health care system providers.
            (3) Effect on federal spending.--Congress finds that the 
        health care liability litigation systems existing throughout 
        the United States have a significant effect on the amount, 
        distribution, and use of Federal funds because of--
                    (A) the large number of individuals who receive 
                health care benefits under programs operated or 
                financed by the Federal Government;
                    (B) the large number of individuals who benefit 
                because of the exclusion from Federal taxes of the 
                amounts spent to provide them with health insurance 
                benefits; and
                    (C) the large number of health care providers who 
                provide items or services for which the Federal 
                Government makes payments.
    (b) Purpose.--It is the purpose of this title to implement 
reasonable, comprehensive, and effective health care liability reforms 
designed to--
            (1) improve the availability of health care services in 
        cases in which health care liability actions have been shown to 
        be a factor in the decreased availability of services;
            (2) reduce the incidence of ``defensive medicine'' and 
        lower the cost of health care liability insurance, all of which 
        contribute to the escalation of health care costs;
            (3) ensure that persons with meritorious health care injury 
        claims receive fair and adequate compensation, including 
        reasonable noneconomic damages;
            (4) improve the fairness and cost-effectiveness of our 
        current health care liability system to resolve disputes over, 
        and provide compensation for, health care liability by reducing 
        uncertainty in the amount of compensation provided to injured 
        individuals; and
            (5) provide an increased sharing of information in the 
        health care system which will reduce unintended injury and 
        improve patient care.

SEC. 403. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

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

SEC. 404. COMPENSATING PATIENT INJURY.

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

SEC. 405. MAXIMIZING PATIENT RECOVERY.

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

SEC. 406. ADDITIONAL HEALTH BENEFITS.

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

SEC. 407. PUNITIVE DAMAGES.

    (a) In General.--Punitive damages may, if otherwise permitted by 
applicable State or Federal law, be awarded against any person in a 
health care lawsuit only if it is proven by clear and convincing 
evidence that such person acted with malicious intent to injure the 
claimant, or that such person deliberately failed to avoid unnecessary 
injury that such person knew the claimant was substantially certain to 
suffer. In any health care lawsuit where no judgment for compensatory 
damages is rendered against such person, no punitive damages may be 
awarded with respect to the claim in such lawsuit. No demand for 
punitive damages shall be included in a health care lawsuit as 
initially filed. A court may allow a claimant to file an amended 
pleading for punitive damages only upon a motion by the claimant and 
after a finding by the court, upon review of supporting and opposing 
affidavits or after a hearing, after weighing the evidence, that the 
claimant has established by a substantial probability that the claimant 
will prevail on the claim for punitive damages. At the request of any 
party in a health care lawsuit, the trier of fact shall consider in a 
separate proceeding--
            (1) whether punitive damages are to be awarded and the 
        amount of such award; and
            (2) the amount of punitive damages following a 
        determination of punitive liability.
If a separate proceeding is requested, evidence relevant only to the 
claim for punitive damages, as determined by applicable State law, 
shall be inadmissible in any proceeding to determine whether 
compensatory damages are to be awarded.
    (b) Determining Amount of Punitive Damages.--
            (1) Factors considered.--In determining the amount of 
        punitive damages, if awarded, in a health care lawsuit, the 
        trier of fact shall consider only the following--
                    (A) the severity of the harm caused by the conduct 
                of such party;
                    (B) the duration of the conduct or any concealment 
                of it by such party;
                    (C) the profitability of the conduct to such party;
                    (D) the number of products sold or medical 
                procedures rendered for compensation, as the case may 
                be, by such party, of the kind causing the harm 
                complained of by the claimant;
                    (E) any criminal penalties imposed on such party, 
                as a result of the conduct complained of by the 
                claimant; and
                    (F) the amount of any civil fines assessed against 
                such party as a result of the conduct complained of by 
                the claimant.
            (2) Maximum award.--The amount of punitive damages, if 
        awarded, in a health care lawsuit may be as much as $250,000 or 
        as much as two times the amount of economic damages awarded, 
        whichever is greater. The jury shall not be informed of this 
        limitation.
    (c) No Punitive Damages for Products That Comply With FDA 
Standards.--
            (1) In general.--
                    (A) No punitive damages may be awarded against the 
                manufacturer or distributor of a medical product, or a 
                supplier of any component or raw material of such 
                medical product, based on a claim that such product 
                caused the claimant's harm where--
                            (i)(I) such medical product was subject to 
                        premarket approval, clearance, or licensure by 
                        the Food and Drug Administration with respect 
                        to the safety of the formulation or performance 
                        of the aspect of such medical product which 
                        caused the claimant's harm or the adequacy of 
                        the packaging or labeling of such medical 
                        product; and
                            (II) such medical product was so approved, 
                        cleared, or licensed; or
                            (ii) such medical product is generally 
                        recognized among qualified experts as safe and 
                        effective pursuant to conditions established by 
                        the Food and Drug Administration and applicable 
                        Food and Drug Administration regulations, 
                        including without limitation those related to 
                        packaging and labeling, unless the Food and 
                        Drug Administration has determined that such 
                        medical product was not manufactured or 
                        distributed in substantial compliance with 
                        applicable Food and Drug Administration 
                        statutes and regulations.
                    (B) Rule of construction.--Subparagraph (A) may not 
                be construed as establishing the obligation of the Food 
                and Drug Administration to demonstrate affirmatively 
                that a manufacturer, distributor, or supplier referred 
                to in such subparagraph meets any of the conditions 
                described in such subparagraph.
            (2) Liability of health care providers.--A health care 
        provider who prescribes, or who dispenses pursuant to a 
        prescription, a medical product approved, licensed, or cleared 
        by the Food and Drug Administration shall not be named as a 
        party to a product liability lawsuit involving such product and 
        shall not be liable to a claimant in a class action lawsuit 
        against the manufacturer, distributor, or seller of such 
        product. Nothing in this paragraph prevents a court from 
        consolidating cases involving health care providers and cases 
        involving products liability claims against the manufacturer, 
        distributor, or product seller of such medical product.
            (3) Packaging.--In a health care lawsuit for harm which is 
        alleged to relate to the adequacy of the packaging or labeling 
        of a drug which is required to have tamper-resistant packaging 
        under regulations of the Secretary of Health and Human Services 
        (including labeling regulations related to such packaging), the 
        manufacturer or product seller of the drug shall not be held 
        liable for punitive damages unless such packaging or labeling 
        is found by the trier of fact by clear and convincing evidence 
        to be substantially out of compliance with such regulations.
            (4) Exception.--Paragraph (1) shall not apply in any health 
        care lawsuit in which--
                    (A) a person, before or after premarket approval, 
                clearance, or licensure of such medical product, 
                knowingly misrepresented to or withheld from the Food 
                and Drug Administration information that is required to 
                be submitted under the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 301 et seq.) or section 351 of the 
                Public Health Service Act (42 U.S.C. 262) that is 
                material and is causally related to the harm which the 
                claimant allegedly suffered; or
                    (B) a person made an illegal payment to an official 
                of the Food and Drug Administration for the purpose of 
                either securing or maintaining approval, clearance, or 
                licensure of such medical product.

SEC. 408. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN 
              HEALTH CARE LAWSUITS.

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

SEC. 409. DEFINITIONS.

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

SEC. 410. EFFECT ON OTHER LAWS.

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

SEC. 411. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

    (a) Health Care Lawsuits.--The provisions governing health care 
lawsuits set forth in this title preempt, subject to subsections (b) 
and (c), State law to the extent that State law prevents the 
application of any provisions of law established by or under this 
title. The provisions governing health care lawsuits set forth in this 
title supersede chapter 171 of title 28, United States Code, to the 
extent that such chapter--
            (1) provides for a greater amount of damages or contingent 
        fees, a longer period in which a health care lawsuit may be 
        commenced, or a reduced applicability or scope of periodic 
        payment of future damages, than provided in this title; or
            (2) prohibits the introduction of evidence regarding 
        collateral source benefits, or mandates or permits subrogation 
        or a lien on collateral source benefits.
    (b) Protection of States' Rights and Other Laws.--(1) Any issue 
that is not governed by any provision of law established by or under 
this title (including State standards of gross negligence) shall be 
governed by otherwise applicable State or Federal law.
    (2) This title shall not preempt or supersede any State or Federal 
law that imposes greater procedural or substantive protections for 
health care providers and health care organizations from liability, 
loss, or damages than those provided by this title or create a cause of 
action.
    (c) State Flexibility.--No provision of this title shall be 
construed to preempt--
            (1) any State law (whether effective before, on, or after 
        the date of the enactment of this title) that specifies a 
        particular monetary amount of compensatory or punitive damages 
        (or the total amount of damages) that may be awarded in a 
        health care lawsuit, regardless of whether such monetary amount 
        is greater or lesser than is provided for under this title, 
        notwithstanding section 4(a); or
            (2) any defense available to a party in a health care 
        lawsuit under any other provision of State or Federal law.

SEC. 412. APPLICABILITY; EFFECTIVE DATE.

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

SEC. 413. SENSE OF CONGRESS.

    It is the sense of Congress that a health insurer should be liable 
for damages for harm caused when it makes a decision as to what care is 
medically necessary and appropriate.

SEC. 414. STATE GRANTS TO CREATE ADMINISTRATIVE HEALTH CARE TRIBUNALS.

    Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.) is amended by adding at the end the following:

``SEC. 399R. STATE GRANTS TO CREATE ADMINISTRATIVE HEALTH CARE 
              TRIBUNALS.

    ``(a) In General.--The Secretary may award grants to States for the 
development, implementation, and evaluation of administrative health 
care tribunals that comply with this section, for the resolution of 
disputes concerning injuries allegedly caused by health care providers.
    ``(b) Conditions for Demonstration Grants.--To be eligible to 
receive a grant under this section, a State shall submit to the 
Secretary an application at such time, in such manner, and containing 
such information as may be required by the Secretary. A grant shall be 
awarded under this section on such terms and conditions as the 
Secretary determines appropriate.
    ``(c) Representation by Counsel.--A State that receives a grant 
under this section may not preclude any party to a dispute before an 
administrative health care tribunal operated under such grant from 
obtaining legal representation during any review by the expert panel 
under subsection (d), the administrative health care tribunal under 
subsection (e), or a State court under subsection (f).
    ``(d) Expert Panel Review and Early Offer Guidelines.--
            ``(1) In general.--Prior to the submission of any dispute 
        concerning injuries allegedly caused by health care providers 
        to an administrative health care tribunal under this section, 
        such allegations shall first be reviewed by an expert panel.
            ``(2) Composition.--
                    ``(A) In general.--The members of each expert panel 
                under this subsection appointed by the head of the 
                State agency responsible for health. At least one-half 
                of such members shall be medical experts (either 
                physicians or health care professionals).
                    ``(B) Licensure and expertise.--Each physician or 
                health care professional appointed to an expert panel 
                under subparagraph (A) shall--
                            ``(i) be appropriately credentialed or 
                        licensed in 1 or more States to deliver health 
                        care services; and
                            ``(ii) typically treat the condition, make 
                        the diagnosis, or provide the type of treatment 
                        that is under review.
                    ``(C) Independence.--
                            ``(i) In general.--Subject to clause (ii), 
                        each individual appointed to an expert panel 
                        under this paragraph shall--
                                    ``(I) not have a material familial, 
                                financial, or professional relationship 
                                with a party involved in the dispute 
                                reviewed by the panel; and
                                    ``(II) not otherwise have a 
                                conflict of interest with such a party.
                            ``(ii) Exception.--Nothing in clause (i) 
                        shall be construed to prohibit an individual 
                        who has staff privileges at an institution 
                        where the treatment involved in the dispute was 
                        provided from serving as a member of an expert 
                        panel merely on the basis of such affiliation, 
                        if the affiliation is disclosed to the parties 
                        and neither party objects.
                    ``(D) Practicing health care professional in same 
                field.--
                            ``(i) In general.--In a dispute before an 
                        expert panel that involves treatment, or the 
                        provision of items or services--
                                    ``(I) by a physician, the medical 
                                experts on the expert panel shall be 
                                practicing physicians (allopathic or 
                                osteopathic) of the same or similar 
                                specialty as a physician who typically 
                                treats the condition, makes the 
                                diagnosis, or provides the type of 
                                treatment under review; or
                                    ``(II) by a health care 
                                professional other than a physician, at 
                                least two medical experts on the expert 
                                panel shall be practicing physicians 
                                (allopathic or osteopathic) of the same 
                                or similar specialty as the health care 
                                professional who typically treats the 
                                condition, makes the diagnosis, or 
                                provides the type of treatment under 
                                review, and, if determined appropriate 
                                by the State agency, the third medical 
                                expert shall be a practicing health 
                                care professional (other than such a 
                                physician) of such a same or similar 
                                specialty.
                            ``(ii) Practicing defined.--In this 
                        paragraph, the term `practicing' means, with 
                        respect to an individual who is a physician or 
                        other health care professional, that the 
                        individual provides health care services to 
                        individual patients on average at least 2 days 
                        a week.
                    ``(E) Pediatric expertise.--In the case of dispute 
                relating to a child, at least 1 medical expert on the 
                expert panel shall have expertise described in 
                subparagraph (D)(i) in pediatrics.
            ``(3) Determination.--After a review under paragraph (1), 
        an expert panel shall make a determination as to the liability 
        of the parties involved and compensation.
            ``(4) Acceptance.--If the parties to a dispute before an 
        expert panel under this subsection accept the determination of 
        the expert panel concerning liability and compensation, such 
        compensation shall be paid to the claimant and the claimant 
        shall agree to forgo any further action against the health care 
        providers involved.
            ``(5) Failure to accept.--If any party decides not to 
        accept the expert panel's determination, the matter shall be 
        referred to an administrative health care tribunal created 
        pursuant to this section.
    ``(e) Administrative Health Care Tribunals.--
            ``(1) In general.--Upon the failure of any party to accept 
        the determination of an expert panel under subsection (d), the 
        parties shall have the right to request a hearing concerning 
        the liability or compensation involved by an administrative 
        health care tribunal established by the State involved.
            ``(2) Requirements.--In establishing an administrative 
        health care tribunal under this section, a State shall--
                    ``(A) ensure that such tribunals are presided over 
                by special judges with health care expertise;
                    ``(B) provide authority to such judges to make 
                binding rulings, rendered in written decisions, on 
                standards of care, causation, compensation, and related 
                issues with reliance on independent expert witnesses 
                commissioned by the tribunal;
                    ``(C) establish gross negligence as the legal 
                standard for the tribunal;
                    ``(D) allow the admission into evidence of the 
                recommendation made by the expert panel under 
                subsection (d); and
                    ``(E) provide for an appeals process to allow for 
                review of decisions by State courts.
    ``(f) Review by State Court After Exhaustion of Administrative 
Remedies.--
            ``(1) Right to file.--If any party to a dispute before a 
        health care tribunal under subsection (e) is not satisfied with 
        the determinations of the tribunal, the party shall have the 
        right to file their claim in a State court of competent 
        jurisdiction.
            ``(2) Forfeit of awards.--Any party filing an action in a 
        State court in accordance with paragraph (1) shall forfeit any 
        compensation award made under subsection (e).
            ``(3) Admissibility.--The determinations of the expert 
        panel and the administrative health care tribunal pursuant to 
        subsections (d) and (e) with respect to a State court 
        proceeding under paragraph (1) shall be admissible into 
        evidence in any such State court proceeding.
    ``(g) Definition.--In this section, the term `health care provider' 
has the meaning given such term for purposes of part A of title VII.
    ``(h) Funding.--
            ``(1) One-time increase in medicaid payment.--In the case 
        of a State awarded a grant to carry out this section, the total 
        amount of Federal payments made to the State under section 
        1903(a) of the Social Security Act or section 1939(b)of such 
        Act (in the case of fiscal year 2010 or any fiscal year 
        thereafter) for the first fiscal year for which such grant is 
        awarded shall be increased by an amount equal to 1 percent of 
        of the total amount of such payments made to the State for the 
        preceding fiscal year under such 1903(a) or 1939(b) (as 
        applicable) for purposes of carrying out this section. Amounts 
        paid to a State pursuant to this subsection shall remain 
        available until expended.
            ``(2) Authorization of appropriations.--There are 
        authorized to be appropriated for any fiscal year such sums as 
        may be necessary for purposes of making payments to States 
        pursuant to paragraph (1).''.

         TITLE V--TAX CREDIT FOR HEALTH INFORMATION TECHNOLOGY

SEC. 501. PURCHASE OF QUALIFIED HEALTH CARE INFORMATION TECHNOLOGY.

    (a) In General.--Section 179 of the Internal Revenue Code of 1986 
(relating to election to expense certain depreciable assets) is amended 
by adding at the end the following new subsection:
    ``(e) Health Care Information Technology.--
            ``(1) In general.--In the case of qualified health care 
        information technology purchased by a medical care provider and 
        placed in service during a taxable year--
                    ``(A) subsection (b)(1) shall be applied by 
                substituting `$300,000' for `$100,000',
                    ``(B) subsection (b)(2) shall be applied by 
                substituting `$600,000' for `$400,000', and
                    ``(C) subsection (b)(5)(A) shall be applied by 
                substituting `$300,000 and $600,000' for `$100,000 and 
                $400,000'.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Qualified health care information 
                technology.--The term `qualified health care 
                information technology' means section 179 property 
                which is used primarily for the electronic creation, 
                maintenance, and exchange of medical care information 
                to improve the quality or efficiency of medical care.
                    ``(B) Medical care provider.--The term `medical 
                care provider' means any person engaged in the trade or 
                business of providing medical care.
                    ``(C) Medical care.--The term `medical care' has 
                the meaning given such term by section 213(d).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2006.

SEC. 502. TELECOMMUNICATIONS CREDIT FOR QUALIFIED MEDICAL CARE 
              PROVIDERS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45N. TELECOMMUNICATIONS CREDIT FOR QUALIFIED MEDICAL CARE 
              PROVIDERS.

    ``(a) General Rule.--For purposes of section 38, in the case of a 
qualified medical care provider, the telecommunications credit 
determined under this section for a taxable year is an amount equal to 
50 percent of the applicable telecommunications charges paid or 
incurred by such provider during the taxable year.
    ``(b) Dollar Limitation.--In the case of a qualified medical care 
provider, the credit determined under subsection (a) for a taxable year 
shall not exceed $12,500.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Applicable telecommunications charges.--The term 
        `applicable telecommunications charges' means expenses paid or 
        incurred for the purpose of installing or maintaining a 
        communications network that supports interoperability of 
        electronic medical record systems.
            ``(2) Qualified medical care provider.--The term `qualified 
        medical care provider' means any person engaged in the trade or 
        business of providing medical care (as defined in section 
        213(d)) who has purchased qualified health care information 
        technology (as defined in section 179(e)).''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of such Code is amended by striking 
        ``plus'' at the end of paragraph (25), by striking the period 
        at the end of paragraph (26) and inserting ``, plus'', and by 
        adding at the end the following new paragraph:
            ``(27) the telecommunications credit determined under 
        section 45N.''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 45N. Telecommunications credit for qualified medical care 
                            providers.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after December 31, 2006.

SEC. 503. DEVELOPMENT OF HEALTH CARE INFORMATION TECHNOLOGY STANDARDS.

    Not later than 5 years after the date of the enactment of this Act, 
the Secretary of Health and Human Services shall develop standards for 
health information technology, including for qualified health care 
information technology (as defined in section 179(e)(2)(A) of the 
Internal Revenue Code of 1986, as added by section 501(a)).

                  TITLE VI--MEDICAL LIABILITY REFORMS

SEC. 601. CONSTITUTIONAL AUTHORITY.

    The constitutional authority upon which this title rests is the 
power of the Congress to provide for the general welfare, to regulate 
commerce, and to make all laws which shall be necessary and proper for 
carrying into execution Federal powers, as enumerated in section 8 of 
article I of the Constitution of the United States.

SEC. 602. PROTECTION AGAINST LEGAL LIABILITY FOR EMERGENCY AND RELATED 
              SERVICES FURNISHED TO ANY INDIVIDUAL.

    Section 224(g) of the Public Health Service Act (42 U.S.C. 233(g)) 
is amended--
            (1) in paragraph (4), by striking ``An entity'' and 
        inserting in lieu thereof ``Subject to paragraph (6), an 
        entity''; and
            (2) by adding at the end the following:
    ``(6)(A) For purposes of this section--
            ``(i) an entity described in subparagraph (B) shall be 
        considered to be an entity described in paragraph (4); and
            ``(ii) the provisions of this section shall apply to an 
        entity described in subparagraph (B) in the same manner as such 
        provisions apply to an entity described in paragraph (4), 
        except that--
                    ``(I) notwithstanding paragraph (1)(B), the deeming 
                of any entity described in subparagraph (B), or of an 
                officer, governing board member, employee, or 
                contractor of such an entity, to be an employee of the 
                Public Health Service for purposes of this section 
                shall apply only with respect to items and services 
                that are furnished to an individual pursuant to section 
                1867 of the Social Security Act and to post-
                stabilization services (as defined in subparagraph (C)) 
                furnished to such an individual;
                    ``(II) nothing in paragraph (1)(D) shall be 
                construed as preventing a physician or physician group 
                described in subparagraph (B)(ii) from making the 
                application referred to in such paragraph or as 
                conditioning the deeming of a physician or physician 
                group that makes such an application upon receipt by 
                the Secretary of an application from the hospital or 
                emergency department that employs or contracts with the 
                physician or group;
                    ``(III) notwithstanding paragraph (3), this 
                paragraph shall apply only with respect to causes of 
                action arising from acts or omissions that occur on or 
                after January 1, 2008;
                    ``(IV) paragraph (5) shall not apply to a physician 
                or physician group described in subparagraph (B)(ii);
                    ``(V) the Attorney General, in consultation with 
                the Secretary, shall make separate estimates under 
                subsection (k)(1) with respect to entities described in 
                subparagraph (B) and entities described in paragraph 
                (4) (other than those described in subparagraph (B)), 
                and the Secretary shall establish separate funds under 
                subsection (k)(2) with respect to such groups of 
                entities, and any appropriations under this subsection 
                for entities described in subparagraph (B) shall be 
                separate from the amounts authorized by subsection 
                (k)(2);
                    ``(VI) notwithstanding subsection (k)(2), the 
                amount of the fund established by the Secretary under 
                such subsection with respect to entities described in 
                subparagraph (B) may exceed a total of $10,000,000 for 
                a fiscal year; and
                    ``(VII) subsection (m) shall not apply to entities 
                described in subparagraph (B).
    ``(B) An entity described in this subparagraph is--
            ``(i) a hospital or an emergency department to which 
        section 1867 of the Social Security Act applies; and
            ``(ii) a physician or physician group that is employed by, 
        or under contract with, such hospital or department to furnish 
        items and services to individuals under such section, including 
        so-called `on call physicians' .
    ``(C) For purposes of this paragraph, the term `post-stabilization 
services' means, with respect to an individual who has been treated by 
an entity described in subparagraph (B) for purposes of complying with 
section 1867 of the Social Security Act, services that are--
            ``(i) related to the condition that was so treated; and
            ``(ii) provided after the individual is stabilized in order 
        to maintain the stabilized condition or to improve or resolve 
        the individual's condition.
    ``(D)(i) Nothing in this paragraph (or in any other provision of 
this section as such provision applies to entities described in 
subparagraph (B) by operation of subparagraph (A)) shall be construed 
as authorizing or requiring the Secretary to make payments to such 
entities, the budget authority for which is not provided in advance by 
appropriation Acts.
    ``(ii) The Secretary shall limit the total amount of payments under 
this paragraph for a fiscal year to the total amount appropriated in 
advance by appropriation Acts for such purpose for such fiscal year. If 
the total amount of payments that would otherwise be made under this 
paragraph for a fiscal year exceeds such total amount appropriated, the 
Secretary shall take such steps as may be necessary to ensure that the 
total amount of payments under this paragraph for such fiscal year does 
not exceed such total amount appropriated.''.

   TITLE VII--TAX DEDUCTION FOR UNCOMPENSATED CARE IN EMERGENCY ROOMS

SEC. 701. BAD DEBT DEDUCTION FOR DOCTORS TO PARTIALLY OFFSET THE COST 
              OF PROVIDING UNCOMPENSATED CARE REQUIRED TO BE PROVIDED 
              UNDER AMENDMENTS MADE BY THE EMERGENCY MEDICAL TREATMENT 
              AND LABOR ACT.

    (a) In General.--Section 166 of the Internal Revenue Code of 1986 
(relating to bad debts) is amended by redesignating subsection (f) as 
subsection (g) and by inserting after subsection (e) the following new 
subsection:
    ``(f) Bad Debt Treatment for Doctors To Partially Offset Cost of 
Providing Uncompensated Care Required To Be Provided.--
            ``(1) Amount of deduction.--
                    ``(A) In general.--For purposes of subsection (a), 
                the basis for determining the amount of any deduction 
                for an eligible EMTALA debt shall be treated as being 
                equal to the Medicare payment amount.
                    ``(B) Medicare payment amount.--For purposes of 
                subparagraph (A), the Medicare payment amount with 
                respect to an eligible EMTALA debt is the fee schedule 
                amount established under section 1848 of the Social 
                Security Act for the physicians' service (to which such 
                debt relates) as if the service were provided to an 
                individual enrolled under part B of title XVIIII of 
                such Act.
            ``(2) Eligible emtala debt.--For purposes of this section, 
        the term `eligible EMTALA debt' means any debt if--
                    ``(A) such debt arose as a result of physicians' 
                services--
                            ``(i) which were performed in an EMTALA 
                        hospital by a board-certified physician 
                        (whether as part of medical screening or 
                        necessary stabilizing treatment and whether as 
                        an emergency department physician, as an on-
                        call physician, or otherwise), and
                            ``(ii) which were required to be provided 
                        under section 1867 of the Social Security Act 
                        (42 U.S.C. 1395dd), and
                    ``(B) such debt is owed--
                            ``(i) to such physician, or
                            ``(ii) to an entity if--
                                    ``(I) such entity is a corporation 
                                and the sole shareholder of such 
                                corporation is such physician, or
                                    ``(II) such entity is a partnership 
                                and any deduction under this subsection 
                                with respect to such debt is allocated 
                                to such physician or to an entity 
                                described in subclause (I).
            ``(3) Board-certified physician.--For purposes of this 
        subsection, the term `board-certified physician' means any 
        physician (as defined in section 1861(r) of the Social Security 
        Act (42 U.S.C. 1395x(r)) who is certified by the American Board 
        of Emergency Medicine or other appropriate medical specialty 
        board for the specialty in which the physician practices, or 
        who meets comparable requirements, as identified by the 
        Secretary of the Treasury in consultation with Secretary of 
        Health and Human Services.
            ``(4) Other definitions.--For purposes of this subsection--
                    ``(A) EMTALA hospital.--The term `EMTALA hospital' 
                means any hospital having a hospital emergency 
                department which is required to comply with section 
                1867 of the Social Security Act (42 U.S.C. 1395dd) 
                (relating to examination and treatment for emergency 
                medical conditions and women in labor).
                    ``(B) Physicians' services.--The term `physicians' 
                services' has the meaning given such term in section 
                1861(q) of the Social Security Act (42 U.S.C. 
                1395x(q)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to debts arising from services performed in taxable years 
beginning after the date of the enactment of this Act.

                     TITLE VIII--ADDITIONAL CHANGES

SEC. 801. APPLICATION OF SECTION 1115 WAIVERS BY OTHER STATES.

    Section 1115 of the Social Security Act (42 U.S.C. 1315) is amended 
by adding at the end the following new subsection:
    ``(g) If the Secretary has waived under subsection (a) compliance 
with one or more requirements of title XIX in connection with a project 
of a State and such waiver has not been terminated, the Secretary shall 
also waive compliance with such requirements in connection with a 
project conducted by another State that is consistent with the terms 
and conditions for the original project.''.

SEC. 802. HIPAA TECHNICAL ADVISORY GROUP.

    (a) Establishment.--The Secretary shall establish a Technical 
Advisory Group (in this section referred to as the ``Advisory Group'') 
to review issues related to the HIPAA regulations and their 
implementation. In this section, the term ``HIPAA regulations'' refers 
to the regulations promulgated pursuant to section 264(c) of the Health 
Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d-1 
note).
    (b) Membership.--The Advisory Group shall be composed of 19 
members, including the Administrator of the Centers for Medicare & 
Medicaid Services and the Inspector General of the Department of Health 
and Human Services and of which--
            (1) 2 shall be representatives of hospitals, including at 
        least one public hospital, that have experience with the 
        application of HIPAA regulations;
            (2) 9 shall be practicing physicians drawn from the fields 
        of emergency medicine, cardiology or cardiothoracic surgery, 
        orthopaedic surgery, neurosurgery, general surgery with 
        expertise in trauma, internal medicine, pediatrics or a 
        pediatric subspecialty, obstetrics-gynecology, and psychiatry, 
        with not more than one physician from any particular field;
            (3) 2 shall be non-physician representatives from private 
        medical practices with significant patient volume;
            (4) 2 shall represent patients;
            (5) 2 shall be staff involved in HIPAA regulations 
        investigations from different regional offices of the Centers 
        for Medicare & Medicaid Services; and
            (6) 1 shall be from a State survey office involved in HIPAA 
        regulations investigations and 1 shall be from a peer review 
        organization, both of whom shall be from areas other than the 
        regions represented under paragraph (5).
In selecting members described in paragraphs (1) through (4), the 
Secretary shall consider qualified individuals nominated by 
organizations representing providers and patients.
    (c) General Responsibilities.--The Advisory Group--
            (1) shall review HIPAA regulations;
            (2) may provide advice and recommendations to the Secretary 
        with respect to those regulations and their application to 
        hospitals, medical practices, outpatient services and 
        physicians;
            (3) shall solicit comments and recommendations from 
        hospitals, physicians, and the public regarding the 
        implementation of such regulations;
            (4) may disseminate information on the application of such 
        regulations to hospitals, physicians, and the public; and
            (5) shall make recommendations to Congress regarding any 
        reforms recommended that may ease the regulatory burden on 
        those caring for patients.
    (d) Administrative Matters.--
            (1) Chairperson.--The members of the Advisory Group shall 
        elect a member to serve as chairperson of the Advisory Group 
        for the life of the Advisory Group.
            (2) Meetings.--The Advisory Group shall first meet at the 
        direction of the Secretary. The Advisory Group shall then meet 
        twice per year and at such other times as the Advisory Group 
        may provide.
    (e) Termination.--The Advisory Group shall terminate 30 months 
after the date of its first meeting.
    (f) Waiver of Administrative Limitation.--The Secretary shall 
establish the Advisory Group notwithstanding any limitation that may 
apply to the number of advisory committees that may be established 
(within the Department of Health and Human Services or otherwise).

SEC. 803. MEDICARE PHYSICIAN PAYMENT UPDATE REFORM.

    (a) Substitution of MEI Increase for SGR Adjustments.--Section 
1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) is amended--
            (1) in paragraph (1)(A), by inserting ``and before 2008'' 
        after ``beginning with 2001'';
            (2) in paragraph (1)(A), by inserting before the period at 
        the end the following: ``, and for years beginning with 2008, 
        multiplied by the update established under paragraph (7) 
        applicable to the year involved''; and
            (3) in paragraph (4)--
                    (A) in the heading by striking ``years beginning 
                with 2001'' and inserting ``2001, 2002, and 2003''; and
                    (B) in subparagraph (A), by inserting ``and ending 
                with 2003'' after ``beginning with 2001''; and
            (4) by adding at the end the following new paragraph:
            ``(8) Update beginning with 2008.--The update to the single 
        conversion factor established in paragraph (1)(C) for 2008 and 
        each succeeding year shall be the percentage increase in the 
        MEI (as defined in section 1842(i)(3)) for the year 
        involved.''.
    (b) Ending Application of Sustainable Growth Rate (SGR).--Section 
1848(f)(1)(B) of such Act (42 U.S.C. 1395w-4(f)(1)(B)) is amended by 
inserting ``(and before 2007)'' after ``each succeeding year''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payment for services furnished on or after January 1, 2008.

SEC. 804. REMOVING LIMITATIONS ON BALANCE BILLING WITH BENEFICIARY 
              NOTICE.

    (a) In General.--Section 1848(g) of the Social Security Act (42 
U.S.C. 1395w-4(g)) is amended--
            (1) in paragraph (1)(A), in the matter before clause (i), 
        by inserting ``, subject to subparagraph (D),'' after 
        ``enrolled under this part'';
            (2) in paragraph (1), by adding at the end the following 
        new subparagraph:
                    ``(D) Exception.--Subparagraph (A) shall not apply 
                with respect to physicians' services furnished in a 
                month to an individual if the individual furnishing 
                such services provides the advance notice of such non-
                participation and non-acceptance of assignment under 
                paragraph (8) and (for services furnished on or after 
                January 1, 2008) submits information in accordance with 
                subsection (k)(4).''; and
            (3) by adding at the end the following new paragraph:
            ``(8) Notice of non-participation and non-acceptance of 
        assignment.--For purposes of paragraph (1)(D), the advance 
        notice of non-participation and non-acceptance of assignment 
        shall be, with respect to an item or service furnished under 
        this part by (or under the supervision of) a physician, a 
        notice (that may be in the form of a posting in a conspicuous 
        place in a physician's office or on patient information forms) 
        that is posted or otherwise furnished in a manner so as to 
        inform the individual receiving the item or service that--
                    ``(A) the physician furnishing (or supervising the 
                furnishing of) the items or service is not a 
                participating physician and does not accept assignment 
                with respect to the service; and
                    ``(B) because of such non-acceptance, in the case 
                of physicians' services furnished in a month to an 
                individual, the charge imposed is not limited and may 
                exceed the limiting charge described in paragraph 
                (2).''.
    (b) Conforming Amendment to Private Contract Provisions.--Section 
1802 of such Act (42 U.S.C. 1395a) is amended by adding at the end the 
following new paragraph:
            ``(6) Exception.--The previous provisions of this 
        subsection shall not apply to physicians' services furnished in 
        a month to an individual if the advance notice described in 
        section 1848(g)(8) has been provided and (for services 
        furnished on or after January 1, 2008) the physician furnishing 
        the services submits information in accordance with section 
        1848(k)(4).''.
    (c) Conforming Amendment to Participation Provisions.--Section 
1842(h) of such Act (42 U.S.C. 1395u) is amended by adding at the end 
the following new paragraph:
    ``(8) The previous provisions of this subsection, insofar as they 
limit the charges that a participating physician may impose, shall not 
apply to physicians' services furnished in a month to an individual if 
the advance notice described in section 1848(g)(8) has been provided 
and (for services furnished on or after January 1, 2008) the physician 
furnishing the services submits information in accordance with section 
1848(k)(4).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2008.

SEC. 805. ELECTION OF TAX CREDIT INSTEAD OF ALTERNATIVE GOVERNMENT 
              BENEFITS.

    (a) In General.--Notwithstanding any other provision of law, an 
individual who is otherwise eligible for benefits under a Federal 
health program (as defined in subsection (c)) may elect, in a form and 
manner specified by the Secretary of Health and Human Services in 
consultation with the Secretary of the Treasury, to receive a tax 
credit described in section 36 of the Internal Revenue Code of 1986 
(which may be used for the purpose of health insurance coverage) in 
lieu of receiving any benefits under such program.
    (b) Effective Date.--An election under subsection (a) may first be 
made for calendar year 2009 and any such election shall be effective 
for such period (not less than one calendar year) as the Secretary of 
Health and Human Services shall specify, in consultation with the 
Secretary of the Treasury.
    (c) Federal Health Program Defined.--For purposes of this section, 
the term ``Federal health program'' means any of the following:
            (1) Medicare.--The medicare program under part A of title 
        XVIII of the Social Security Act, including any benefits under 
        any other part of such title.
            (2) Medicaid.--The Medicaid program under title XIX of such 
        Act (including such a program operating under a Statewide 
        waiver under section 1115 of such Act).
            (3) SCHIP.--The State children's health insurance program 
        under title XXI of such Act.
            (4) TRICARE.--The TRICARE program under chapter 55 of title 
        10, United States Code.
            (5) Veterans benefits.--Coverage for benefits under chapter 
        17 of title 38, United States Code.

SEC. 806. USE OF PRIVATE CONTRACTS BY MEDICARE BENEFICIARIES FOR 
              PROFESSIONAL SERVICES.

    (a) In General.--Section 1802 of the Social Security Act (42 U.S.C. 
1395a) is amended by striking subsection (b) and inserting the 
following:
    ``(b) Clarification of Use of Private Contracts by Medicare 
Beneficiaries for Professional Services.--
            ``(1) In general.--Nothing in this title shall prohibit a 
        medicare beneficiary from entering into a private contract with 
        a physician or health care practitioner for the provision of 
        medicare covered professional services (as defined in paragraph 
        (5)(C)) if--
                    ``(A) the services are covered under a private 
                contract that is between the beneficiary and the 
                physician or practitioner and meets the requirements of 
                paragraph (2);
                    ``(B) under the private contract no claim for 
                payment for services covered under the contract is to 
                be submitted (and no payment made) under part A or B 
                under a contract under section 1876, or under a 
                Medicare Advantage plan (other than an MSA plan); and
                    ``(C)(i) the Secretary has been provided with the 
                minimum information necessary to avoid any payment 
                under part A or B for services covered under the 
                contract, or
                    ``(ii) in the case of an individual enrolled under 
                a contract under section 1876 or a Medicare Advantage 
                plan (other than an MSA plan) under part C, the 
                eligible organization under the contract or the 
                Medicare Advantage organization offering the plan has 
                been provided the minimum information necessary to 
                avoid any payment under such contract or plan for 
                services covered under the contract.
            ``(2) Requirements for private contracts.--The requirements 
        in this paragraph for a private contract between a medicare 
        beneficiary and a physician or health care practitioner are as 
        follows:
                    ``(A) General form of contract.--The contract is in 
                writing and is signed by the medicare beneficiary.
                    ``(B) No claims to be submitted for covered 
                services.--The contract provides that no party to the 
                contract (and no entity on behalf of any party to the 
                contract) shall submit any claim for (or request) 
                payment for services covered under the contract under 
                part A or B, under a contract under section 1876, or 
                under a Medicare Advantage plan (other than an MSA 
                plan).
                    ``(C) Scope of services.--The contract identifies 
                the medicare covered professional services and the 
                period (if any) to be covered under the contract, but 
                does not cover any services furnished--
                            ``(i) before the contract is entered into; 
                        or
                            ``(ii) for the treatment of an emergency 
                        medical condition (as defined in section 
                        1867(e)(1)(A)), unless the contract was entered 
                        into before the onset of the emergency medical 
                        condition.
                    ``(D) Clear disclosure of terms.--The contract 
                clearly indicates that by signing the contract the 
                medicare beneficiary--
                            ``(i) agrees not to submit a claim (or to 
                        request that anyone submit a claim) under part 
                        A or B (or under section 1876 or under a 
                        Medicare Advantage plan, other than an MSA 
                        plan) for services covered under the contract;
                            ``(ii) agrees to be responsible, whether 
                        through insurance or otherwise, for payment for 
                        such services and understands that no 
                        reimbursement will be provided under such part, 
                        contract, or plan for such services;
                            ``(iii) acknowledges that no limits under 
                        this title (including limits under paragraph 
                        (1) and (3) of section 1848(g)) will apply to 
                        amounts that may be charged for such services;
                            ``(iv) acknowledges that medicare 
                        supplemental policies under section 1882 do 
                        not, and other supplemental health plans and 
                        policies may elect not to, make payments for 
                        such services because payment is not made under 
                        this title; and
                            ``(v) acknowledges that the beneficiary has 
                        the right to have such services provided by (or 
                        under the supervision of) other physicians or 
                        health care practitioners for whom payment 
                        would be made under such part, contract, or 
                        plan.
                Such contract shall also clearly indicate whether the 
                physician or practitioner involved is excluded from 
                participation under this title.
            ``(3) Modifications.--The parties to a private contract may 
        mutually agree at any time to modify or terminate the contract 
        on a prospective basis, consistent with the provisions of 
        paragraphs (1) and (2).
            ``(4) No requirements for services furnished to msa plan 
        enrollees.--The requirements of paragraphs (1) and (2) do not 
        apply to any contract or arrangement for the provision of 
        services to a medicare beneficiary enrolled in an MSA plan 
        under part C.
            ``(5) Definitions.--In this subsection:
                    ``(A) Health care practitioner.--The term `health 
                care practitioner' means a practitioner described in 
                section 1842(b)(18)(C).
                    ``(B) Medicare beneficiary.--The term `medicare 
                beneficiary' means an individual who is enrolled under 
                part B.
                    ``(C) Medicare covered professional services.--The 
                term `medicare covered professional services' means--
                            ``(i) physicians' services (as defined in 
                        section 1861(q), and including services 
                        described in section 1861(s)(2)(A)), and
                            ``(ii) professional services of health care 
                        practitioners, including services described in 
                        section 1842(b)(18)(D),
                for which payment may be made under part A or B, under 
                a contract under section 1876, or under a Medicare 
                Advantage plan but for the provisions of a private 
                contract that meets the requirements of paragraph (2).
                    ``(D) Medicare advantage plan; msa plan.--The terms 
                `Medicare Advantage plan' and `MSA plan' have the 
                meanings given the terms `Medicare+Choice plan' and 
                `MSA plan' in section 1859.
                    ``(E) Physician.--The term `physician' has the 
                meaning given such term in section 1861(r).''.
    (b) Conforming Amendments Clarifying Exemption From Limiting Charge 
and From Requirement for Submission of Claims.--Section 1848(g) of the 
Social Security Act (42 U.S.C. 1395w-4(g)) is amended--
            (1) in paragraph (1)(A), by striking ``In'' and inserting 
        ``Subject to paragraph (8), in'';
            (2) in paragraph (3)(A), by striking ``Payment'' and 
        inserting ``Subject to paragraph (8), payment'';
            (3) in paragraph (4)(A), by striking ``For'' and inserting 
        ``Subject to paragraph (8), for''; and
            (4) by adding at the end the following new paragraph:
            ``(8) Exemption from requirements for services furnished 
        under private contracts.--
                    ``(A) In general.--Pursuant to section 1802(b)(1), 
                paragraphs (1), (3), and (4) do not apply with respect 
                to physicians' services (and services described in 
                section 1861(s)(2)(A)) furnished to an individual by 
                (or under the supervision of) a physician if the 
                conditions described in section 1802(b)(1) are met with 
                respect to the services.
                    ``(B) No restrictions for enrollees in msa plans.--
                Such paragraphs do not apply with respect to services 
                furnished to individuals enrolled with MSA plans under 
                part C, without regard to whether the conditions 
                described in subparagraphs (A) through (C) of section 
                1802(b)(1) are met.
                    ``(C) Application to enrollees in other plans.--
                Subject to subparagraph (B) and section 1852(k)(2), the 
                provisions of subparagraph (A) shall apply in the case 
                of an individual enrolled under a contract under 
                section 1876 or under a Medicare Advantage plan (other 
                than an MSA plan) under part C, in the same manner as 
                they apply to individuals not enrolled under such a 
                contract or plan.''.
    (c) Conforming Amendments.--
            (1) Section 1842(b)(18) of the Social Security Act (42 
        U.S.C. 1395u(b)(18)) is amended by adding at the end the 
        following:
                    ``(E) The provisions of section 1848(g)(8) shall 
                apply with respect to exemption from limitations on 
                charges and from billing requirements for services of 
                health care practitioners described in this paragraph 
                in the same manner as such provisions apply to 
                exemption from the requirements referred to in section 
                1848(g)(8)(A) for physicians' services.''.
            (2) Section 1866(a)(1)(O) of such Act (42 U.S.C. 
        1395cc(a)(1)(O)) is amended by inserting ``(other than under an 
        MSA plan)'' after ``Medicare+Choice organization under part 
        C''.
    (d) Effective Date.--The amendments made by this section shall be 
effective on the date of the enactment of this Act.

SEC. 807. EMTALA TECHNICAL ADVISORY GROUP.

    (a) Authorization for Extension.--Subsection (e) of section 945 of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108-173; 42 U.S.C. 1395dd note) is amended by 
inserting before the period at the end the following: ``, except that 
the Secretary may extend the Advisory Group beyond such date in order 
to permit the Advisory Group to continue to carry out its 
responsibilities''.
    (b) Secretarial Responsive Report on Group Recommendations.--Such 
section is further amended by adding at the end the following new 
subsection:
    ``(g) Secretarial Response to Recommendations.--The Secretary shall 
review the recommendations made to the Secretary by the Advisory Group 
and shall submit to Congress a report that contains a description of 
any actions the Secretary intends to take in response to such 
recommendations and problems identified by the Advisory Group with 
regard to the EMTALA regulations and their application.''.

SEC. 808. FEDERALLY-SUPPORTED STUDENT LOAN FUNDS FOR MEDICAL STUDENTS.

    (a) Primary Health Care Medical Students.--Subpart II of part A of 
the Public Health Service Act (42 U.S.C. 292q et seq.) is amended--
            (1) by redesignating section 735 as section 729; and
            (2) in subsection (f) of section 729 (as so redesignated), 
        by striking ``is authorized to be appropriated to be 
        appropriated $10,000,000 for each of the fiscal years 1994 
        through 1996'' and inserting ``are authorized to be 
        appropriated such sums as may be necessary for fiscal year 2008 
        and each fiscal year thereafter''.
    (b) Other Medical Students.--Part A of title VII of the Public 
Health Service Act (42 U.S.C. 292 et seq.) is amended by adding at the 
end the following:

   ``Subpart III--Federally-Supported Student Loan Funds for Certain 
                            Medical Students

``SEC. 730. SCHOOL LOAN FUNDS FOR CERTAIN MEDICAL STUDENTS.

    ``(a) Fund Agreements.--For the purpose described in subsection 
(b), the Secretary is authorized to enter into an agreement for the 
establishment and operation of a student loan fund with any public or 
nonprofit school of medicine or osteopathic medicine.
    ``(b) Purpose.--The purpose of this subpart is to provide for loans 
to medical students who would be eligible for a loan under subpart II, 
except for the student's decision to enter a residency training program 
in a field other than primary health care.
    ``(c) Commencement of Repayment Period.--The repayment period for a 
loan under this section shall not begin before the end of any period 
during which the student is participating in an internship, residency, 
or fellowship training program directly related to the field of 
medicine which the student agrees to enter pursuant to subsection (d).
    ``(d) Requirements for Students.--Each agreement under this section 
for the establishment of a student loan fund shall provide that the 
school of medicine or osteopathic medicine will make a loan to a 
student from such fund only if the student agrees--
            ``(1) to enter and complete a residency training program 
        (in a field of medicine other than primary health care) not 
        later than a period determined by the Secretary to be 
        reasonable after the date on which the student graduates from 
        such school; and
            ``(2) to practice medicine through the date on which the 
        loan is repaid in full.
    ``(e) Requirements for Schools.--The provisions of section 723(b) 
(regarding graduates in primary health care) shall not apply to a 
student loan fund established under this section.
    ``(f) Applicability of Other Provisions.--Except as inconsistent 
with this section, the provisions of subpart II shall apply to the 
program of student loan funds established under this section to the 
same extent and in the same manner as such provisions apply to the 
program of student loan funds established under subpart II.
    ``(g) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated such sums as may be necessary 
for fiscal year 2008 and each fiscal year thereafter.''.

SEC. 809. ESTABLISHMENT OF PERFORMANCE-BASED QUALITY MEASURES.

    Not later than January 1, 2009, the Secretary of Health and Human 
Services shall submit to Congress a proposal for a formalized process 
for the development of performance-based quality measures that could be 
applied to physicians' services under the Medicare program. Such 
proposal shall be in concert with and agreement with the Physician 
Consortium for Performance Improvement and shall only utilize measures 
agreed upon by each physician specialty group.
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