II 

116TH CONGRESS 

2D SESSION S. 4796 

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

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

IN THE SENATE OF THE UNITED STATES 

OCTOBER 5, 2020 

Mr. BRAUN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To address the high costs of health care services, prescription 

drugs, and health insurance coverage in the United 

States, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Fair Care Act of 2020’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—MEDISAVE 

Subtitle A—Medisave Accounts and Contributions 


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Sec. 101. Establishment of Medisave accounts. 

Sec. 102. Consolidation of HSAs, HRAs, FSAs, and MSAs into Medisave accounts. 

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

Group Health Plans. 

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

Sec. 105. Direct primary care. 

Subtitle B—Assistance to Medisave Accounts 

Sec. 111. Support in implementation. 

Sec. 112. New corporations required to use Medisave. 

Sec. 113. Federal employee health benefits and Medisave. 

Sec. 114. Grants to States for consumer assistance. 

TITLE II—IMPROVING PRIVATE HEALTH INSURANCE 

Subtitle A—Maintaining Protections for Patients With Preexisting Conditions 

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

Subtitle B—Expanding Coverage Options 

Sec. 211. Rules governing association health plans. 

Sec. 212. Clarification of treatment of single employer arrangements. 

Sec. 213. Enforcement provisions relating to association health plans. 

Sec. 214. Cooperation between Federal and State authorities. 

Sec. 215. Effective date and transitional and other rules. 

Sec. 216. Short-term limited duration insurance. 

Subtitle C—Improving Commercial Health Insurance 

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

Sec. 222. Employer health insurance mandate repeal. 

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

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

under health plans. 

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

rates. 

Sec. 226. Premium assistance adjustment to reflect age. 

Sec. 227. Premium assistance. 

Sec. 228. Adding copper plans to Exchanges. 

Sec. 229. Copper and bronze plans. 

Sec. 230. Waivers for State innovation. 

Sec. 231. Enrollment periods. 

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

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

TITLE III—COMPETITION, TRANSPARENCY AND ACCOUNTABILITY 

Subtitle A—Provider and Insurer Competition 

Sec. 301. Hospital consolidation. 

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


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Sec. 303. Restoring the application of antitrust laws to the business of health 

insurance. 

Sec. 304. Leveling the playing field between payers and providers. 

Sec. 305. Increasing transparency by removing gag clauses on price and quality 

information. 

Sec. 306. Banning anticompetitive terms in facility and insurance contracts 

that limit access to higher quality, lower cost care. 

Sec. 307. Repealing eligibility of certain ACOs. 

Sec. 308. Repeal of health care reform provisions limiting Medicare exception 

to the prohibition on certain physician referrals for hospitals. 

Sec. 309. Alternative payment model for certain shoppable procedures. 

Subtitle B—Price Transparency 

Sec. 321. Price transparency. 

Sec. 322. Price transparency requirements. 

Sec. 323. Designation of nongovernmental, nonprofit transparency organizations to lower Americans’ health care costs. 

Sec. 324. Protecting patients and improving the accuracy of provider directory 

information. 

Sec. 325. Ensuring enrollee access to cost-sharing information. 

Sec. 326. Access of individuals to protected health information. 

Sec. 327. Timely bills for patients. 

Sec. 328. Advisory group on reducing burden of hospital administrative requirements. 

Sec. 329. Data reporting to improve the transparency regarding how 340B hospital covered entities provide care for patients. 

Sec. 330. Requiring 340B drug discount program reports by DSH hospital covered entities on low-income utilization rate of outpatient hospital services. 

Sec. 331. Employer benefits reports. 

Sec. 332. Group health plan reporting requirements. 

Sec. 333. Government Accountability Office study on profit- and revenue-sharing in health care. 

Subtitle C—Prescription Drug Competition and Innovation 

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

products. 

Sec. 342. Preventing blocking of generic drugs. 

Sec. 343. Ensuring timely access to generics. 

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

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

Sec. 346. Provisional approval of new human drugs. 

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

conditions. 

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

Sec. 349. Protecting access to biological products. 

Sec. 350. Streamlining the transition of biological products. 

Sec. 351. Regulation of manufacturer-sponsored copay contributions. 

Sec. 352. Antitrust exemption for private health insurer issuers to negotiate 

wholesale acquisition prices of prescription drugs purchased 

from drug manufacturers. 

Sec. 353. Biological product innovation. 

Sec. 354. Clarifying the meaning of new chemical entity. 


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Sec. 355. Prompt approval of drugs related to safety information. 

Sec. 356. Conditions of use for biosimilar biological products. 

Sec. 357. Education on biological products. 

Sec. 358. Congressional review of the Food and Drug Administration rulemaking. 

Sec. 359. Government Accountability Office study of rules. 

Subtitle D—Prescription Drug and Pharmacy Benefit Manager Transparency 

Sec. 361. Patent disclosure requirements. 

Sec. 362. Biological product patent transparency. 

Sec. 363. Orange Book modernization. 

Sec. 364. Modernizing the labeling of certain generic drugs. 

Sec. 365. Requirements with respect to prescription drug benefits. 

Sec. 366. PBM transparency and elimination of DIR fees. 

Sec. 367. Health plan oversight of pharmacy benefit manager services. 

Sec. 368. Study by Comptroller General of United States. 

Subtitle E—Medicare and Medicaid Prescription Drug Reforms 

Sec. 371. Medicare part B rebate by manufacturers for drugs or biologicals 

with prices increasing faster than inflation. 

Sec. 372. Market based part B pricing index. 

Sec. 373. Innovation model testing of Medicare drug payments. 

Sec. 374. Modification of maximum rebate amount under Medicaid drug rebate 

program. 

Subtitle F—Medical Malpractice Reform 

Sec. 381. Definitions. 

Sec. 382. Encouraging speedy resolution of claims. 

Sec. 383. Compensating patient injury. 

Sec. 384. Maximizing patient recovery. 

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

care lawsuits. 

Sec. 386. Product liability for health care providers. 

Sec. 387. Effect on other laws. 

Sec. 388. Limitation on expert witness testimony. 

Sec. 389. Expert witness qualifications. 

Sec. 390. Communications following unanticipated outcome. 

Sec. 391. Affidavit of merit. 

Sec. 392. Notice of intent to commence lawsuit. 

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

Sec. 394. Rules of construction. 

Sec. 395. Effective date. 

TITLE IV—MEDICARE AND MEDICAID REFORMS 

Subtitle A—Medicaid Reforms 

Sec. 401. Medicaid payment reform. 

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

Sec. 403. Medicaid eligibility determinations. 

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

care providers. 


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

under the Medicaid program. 

Sec. 406. Deduction for qualified charity care. 

Subtitle B—Medicare Reforms 

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

Sec. 412. Eliminating FEHBP eligibility for annuitants. 

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

Sec. 414. Medicare part D tax deduction. 

Sec. 415. Repeal of net investment income tax. 

Sec. 416. Medicare coverage of bad debt. 

Subtitle C—Medicare Choice and Competition 

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

Sec. 422. New unified eligibility and enrollment rules. 

Sec. 423. New benefit structure under unified Medicare. 

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

Sec. 425. Medigap reform. 

Sec. 426. ACO revision. 

Sec. 427. Primary care options. 

Sec. 428. General provisions; effective date. 

Subtitle D—Telehealth Improvements and Expansion 

Sec. 431. Expansion of coverage of telehealth services. 

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

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

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

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

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

Sec. 437. Native American health facilities. 

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

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

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

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

home. 

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

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

services. 

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


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1 TITLE I—MEDISAVE 

2 Subtitle A—Medisave Accounts and 

3 Contributions 

4 SEC. 101. ESTABLISHMENT OF MEDISAVE ACCOUNTS. 

5 (a) IN GENERAL.—Part VIII of subchapter F of 

6 chapter 1 of the Internal Revenue Code of 1986 is amend7 ed by adding at the end the following new section: 

8 ‘‘SEC. 530A. MEDISAVE ACCOUNTS. 

9 ‘‘(a) MEDISAVE ACCOUNT.—For purposes of this sec10 tion— 

11 ‘‘(1) IN GENERAL.—The term ‘Medisave ac12 count’ means a trust created or organized in the 

13 United States as a Medisave account exclusively for 

14 the purpose of paying the qualified medical expenses 

15 of the account beneficiary, but only if the written 

16 governing instrument creating the trust meets the 

17 following requirements: 

18 ‘‘(A) Except in the case of a rollover con19 tribution described in subparagraph (A) or (B) 

20 of subsection (e)(5), no contribution will be ac21 cepted— 

22 ‘‘(i) unless it is in cash, 

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

24 when added to previous contributions to 

25 the trust for the calendar year, exceeds the 


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1 limitation amount specified in subsection 

2 (b)(1), or 

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

4 when added to the balance of the account, 

5 exceeds the limitation amount specified in 

6 subsection (b)(2). 

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

8 section 408(n)), an insurance company (as de9 fined in section 816), or another person who 

10 demonstrates to the satisfaction of the Sec11 retary that the manner in which such person 

12 will administer the trust will be consistent with 

13 the requirements of this section. 

14 ‘‘(C) No part of the trust assets will be in15 vested in life insurance contracts. 

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

17 commingled with other property except in a 

18 common trust fund or common investment 

19 fund. 

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

21 balance in his account is nonforfeitable. 

22 ‘‘(2) QUALIFIED MEDICAL EXPENSES.— 

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

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1 ficiary for medical care, but only to the extent 

2 such amounts are not compensated for by in3 surance or otherwise— 

4 ‘‘(i) for— 

5 ‘‘(I) such individual, 

6 ‘‘(II) the spouse of such indi7 vidual, 

8 ‘‘(III) any dependent (as defined 

9 in section 152, determined without re10 gard to subsections (b)(1), (b)(2), and 

11 (d)(1)(B) thereof) of such individual, 

12 and 

13 ‘‘(IV) any individual who bears a 

14 relationship to the account beneficiary 

15 that is described in subparagraph (C) 

16 or (D) of section 152(d) if the ac17 count beneficiary is or was a depend18 ent of such individual for any taxable 

19 year ending before or with the taxable 

20 year in which the individual attained 

21 18 years of age, and 

22 ‘‘(ii) if, on the date such medical care 

23 was provided, such individual, spouse or 

24 dependent to whom such care was provided 


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1 was covered under the qualified health in2 surance of the account beneficiary. 

3 ‘‘(B) MODIFIED DEFINITION OF MEDICAL

4 CARE.—For purposes of subparagraph (A), the 

5 term ‘medical care’ has the meaning given such 

6 term by section 213(d), except that such term 

7 includes— 

8 ‘‘(i) a direct primary care service ar9 rangement, and 

10 ‘‘(ii) predetermined level of access to 

11 care from an integrated health plan. 

12 ‘‘(3) ACCOUNT BENEFICIARY.—The term ‘ac13 count beneficiary’ means the individual on whose be14 half the Medisave account was established. 

15 ‘‘(4) CERTAIN RULES TO APPLY.—Rules similar 

16 to the following rules shall apply for purposes of this 

17 section: 

18 ‘‘(A) Section 219(d)(2) (relating to no de19 duction for rollovers). 

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

21 when contributions deemed made). 

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

23 section 219(f)(5) (relating to employer pay24 ments). 


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1 ‘‘(D) Section 408(g) (relating to commu2 nity property laws). 

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

4 accounts). 

5 ‘‘(b) LIMITATIONS.— 

6 ‘‘(1) ANNUAL LIMITATION.— 

7 ‘‘(A) IN GENERAL.—The limitation amount 

8 specified in this paragraph is— 

9 ‘‘(i) $5,000 in the case of a qualified 

10 health plan with an actuarial value of less 

11 than 40 percent, 

12 ‘‘(ii) $4,300 in the case of a qualified 

13 health plan with an actuarial value that is 

14 40 percent or more and less than 75 per15 cent, and 

16 ‘‘(iii) $3,600 in the case of a qualified 

17 health plan with an actuarial value that is 

18 75 percent or more. 

19 ‘‘(B) ACTUARIAL VALUE OF QUALIFIED

20 HEALTH PLAN.—For purposes of subparagraph 

21 (A), the actuarial value of a qualified health 

22 plan is the percentage of the total average costs 

23 of covered benefits under the health plan. 


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1 ‘‘(2) ACCOUNT ACCUMULATION LIMITATION.— 

2 The limitation amount specified in this paragraph is 

3 $50,000. 

4 ‘‘(3) INDEXING.— 

5 ‘‘(A) IN GENERAL.—In the case of any 

6 taxable year beginning in a calendar year after 

7 2020, each dollar amount contained in para8 graph (1)(A) shall be increased by the medical 

9 care cost adjustment of such amount for such 

10 calendar year. 

11 ‘‘(B) MEDICAL CARE COST ADJUST12 MENT.—For purposes of subparagraph (A), the 

13 medical care cost adjustment for any calendar 

14 year is the percentage (if any) by which— 

15 ‘‘(i) the medical care component of 

16 the C–CPI–U (as defined in section 

17 1(f)(6)) for August of the preceding cal18 endar year, exceeds 

19 ‘‘(ii) such component of the C–CPI–U 

20 (as so defined) for August of 2019. 

21 ‘‘(C) ROUNDING.— 

22 ‘‘(i) ANNUAL LIMITATION.—If any in23 crease in a dollar amount contained in 

24 paragraph (1)(A) determined under sub25 paragraph (A) is not a multiple of $100, 


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1 such increase shall be rounded to the near2 est multiple of $100. 

3 ‘‘(ii) ACCOUNT LIMITATION.—If any 

4 increase in the dollar amount contained in 

5 paragraph (2) determined under subpara6 graph (A) is not a multiple of $1,000, such 

7 increase shall be rounded to the nearest 

8 multiple of $1,000. 

9 ‘‘(4) COORDINATION WITH OTHER CONTRIBU10 TIONS.—The limitation which would (but for this 

11 paragraph) apply under paragraphs (1) and (2) to 

12 an individual for any taxable year shall be reduced 

13 (but not below zero) by the sum of— 

14 ‘‘(A) the aggregate amount contributed to 

15 Medisave accounts of such individual which is 

16 excludable from the taxpayer’s gross income for 

17 such taxable year under section 106(d), and 

18 ‘‘(B) the aggregate amount contributed to 

19 Medisave accounts of such individual for such 

20 taxable year under section 408(d)(9). 

21 ‘‘(5) DEPOSIT OF ADVANCE PREMIUM TAX

22 CREDIT.—An account beneficiary who is eligible for 

23 an advance payment of the premium tax credit 

24 under section 36B may elect to have the Secretary 


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1 deposit the advance payment into the Medisave ac2 count of the account beneficiary. 

3 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur4 poses of this section— 

5 ‘‘(1) ELIGIBLE INDIVIDUAL.— 

6 ‘‘(A) IN GENERAL.—The term ‘eligible in7 dividual’ means, with respect to any month— 

8 ‘‘(i) any individual who is covered 

9 under a qualified health plan as of the 1st 

10 day of such month; and 

11 ‘‘(ii) any individual whose household 

12 income is greater than 250 percent of the 

13 Federal poverty level— 

14 ‘‘(I) if such individual is covered 

15 under a qualified health plan with an 

16 actuarial value not more than 80 per17 cent; or 

18 ‘‘(II) if— 

19 ‘‘(aa) such individual is cov20 ered under a high deductible 

21 health plan as of the 1st day of 

22 such month; and 

23 ‘‘(bb) such individual is not, 

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1 ductible health plan, covered 

2 under any health plan— 

3 ‘‘(AA) which is not a 

4 high deductible health plan; 

5 and 

6 ‘‘(BB) which provides 

7 coverage for any benefit 

8 which is covered under the 

9 high deductible health plan. 

10 ‘‘(B) CERTAIN COVERAGE DIS11 REGARDED.—Subparagraph (A) shall be ap12 plied without regard to— 

13 ‘‘(i) coverage for any benefit provided 

14 by permitted insurance, and 

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

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

18 ‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI19 GIBLE FOR CERTAIN VETERANS BENEFITS.—An 

20 individual shall not fail to be treated as an eli21 gible individual for any period merely because 

22 the individual receives hospital care or medical 

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1 nected disability (within the meaning of section 

2 101(16) of title 38, United States Code). 

3 ‘‘(2) QUALIFIED HEALTH PLAN.— 

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

5 health plan’ means a health plan that offers 

6 health insurance coverage. Such term includes 

7 entitlement to benefits under title XVIII or title 

8 XIX of the Social Security Act. 

9 ‘‘(B) EXCLUSION OF CERTAIN PLANS.— 

10 Such term does not include a health plan if 

11 substantially all of its coverage is disregarded 

12 under paragraph (1)(B). 

13 ‘‘(C) HEALTH INSURANCE COVERAGE.— 

14 The term ‘health insurance coverage’ means 

15 benefits consisting of medical care (provided di16 rectly, through insurance or reimbursement, or 

17 otherwise and including items and services paid 

18 for as medical care) under any hospital or med19 ical service policy or certificate, hospital or 

20 medical service plan contract, or health mainte21 nance organization contract offered by a health 

22 insurance issuer. 

23 ‘‘(D) HEALTH INSURANCE ISSUER.—The 

24 term ‘health insurance issuer’ means an insur25 ance company, insurance service, or insurance 


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1 organization (including a health maintenance 

2 organization) which is licensed to engage in the 

3 business of insurance in a State and which is 

4 subject to State law which regulates insurance 

5 (within the meaning of section 514(b)(2) of the 

6 Employee Retirement Income Security Act of 

7 1974 (29 U.S.C. 1144(b)(2))). 

8 ‘‘(E) HEALTH MAINTENANCE ORGANIZA9 TION.—The term ‘health maintenance organiza10 tion’ means— 

11 ‘‘(i) a Federally qualified health main12 tenance organization (as defined in section 

13 1301(a) of the Public Health Service Act 

14 (42 U.S.C. 300e(a))), 

15 ‘‘(ii) an organization recognized under 

16 State law as a health maintenance organi17 zation, or 

18 ‘‘(iii) a similar organization regulated 

19 under State law for solvency in the same 

20 manner and to the same extent as such a 

21 health maintenance organization. 

22 ‘‘(3) PERMITTED INSURANCE.—The term ‘per23 mitted insurance’ means— 


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

2 coverage provided under such insurance relates 

3 to— 

4 ‘‘(i) liabilities incurred under workers’ 

5 compensation laws, 

6 ‘‘(ii) tort liabilities, 

7 ‘‘(iii) liabilities relating to ownership 

8 or use of property, or 

9 ‘‘(iv) such other similar liabilities as 

10 the Secretary may specify by regulations, 

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

12 illness, and 

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

14 day (or other period) of hospitalization. 

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

16 coverage’ means any coverage other than self-only 

17 coverage. 

18 ‘‘(d) TAX TREATMENT OF ACCOUNTS.— 

19 ‘‘(1) IN GENERAL.—A Medisave account is ex20 empt from taxation under this subtitle unless such 

21 account has ceased to be a Medisave account. Not22 withstanding the preceding sentence, any Medisave 

23 account is subject to the taxes imposed by section 

24 511 (relating to imposition of tax on unrelated busi25 ness income of charitable, etc. organizations). 


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

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

3 408(e) shall apply to Medisave accounts, and any 

4 amount treated as distributed under such rules shall 

5 be treated as not used to pay qualified medical ex6 penses. 

7 ‘‘(e) TAX TREATMENT OF DISTRIBUTIONS.— 

8 ‘‘(1) AMOUNTS USED FOR QUALIFIED MEDICAL

9 EXPENSES.—Any amount paid or distributed out of 

10 a Medisave account which is used exclusively to pay 

11 qualified medical expenses of any account beneficiary 

12 shall not be includible in gross income. 

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

14 QUALIFIED MEDICAL EXPENSES.—Any amount paid 

15 or distributed out of a Medisave account which is 

16 not used exclusively to pay the qualified medical ex17 penses of the account beneficiary shall be included in 

18 the gross income of such beneficiary. 

19 ‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE20 FORE DUE DATE OF RETURN.— 

21 ‘‘(A) IN GENERAL.—If any excess con22 tribution is contributed for a taxable year to 

23 any Medisave account of an individual, para24 graph (2) shall not apply to distributions from 

25 the Medisave accounts of such individual (to the 


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1 extent such distributions do not exceed the ag2 gregate excess contributions to all such ac3 counts of such individual for such year) if— 

4 ‘‘(i) such distribution is received by 

5 the individual on or before the last day 

6 prescribed by law (including extensions of 

7 time) for filing such individual’s return for 

8 such taxable year, and 

9 ‘‘(ii) such distribution is accompanied 

10 by the amount of net income attributable 

11 to such excess contribution. 

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

13 included in the gross income of the individual 

14 for the taxable year in which it is received. 

15 ‘‘(B) EXCESS CONTRIBUTION.—For pur16 poses of subparagraph (A), the term excess con17 tribution means any contribution (other than a 

18 rollover contribution described in paragraph 

19 (5)) which exceeds the limitations specified in 

20 subsection (b). 

21 ‘‘(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT

22 USED FOR QUALIFIED MEDICAL EXPENSES.— 

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

24 this chapter on the account beneficiary for any 

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1 tribution from a Medisave account of such ben2 eficiary which is includible in gross income 

3 under paragraph (2) shall be increased by 20 

4 percent of the amount which is so includible. 

5 ‘‘(B) EXCEPTION FOR DISABILITY OR

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

7 the payment or distribution is made after the 

8 account beneficiary becomes disabled within the 

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

10 ‘‘(5) ROLLOVER CONTRIBUTION.— 

11 ‘‘(A) IN GENERAL.—An amount is de12 scribed in this subparagraph as a rollover con13 tribution if it meets the requirements of clauses 

14 (i) and (ii). 

15 ‘‘(i) IN GENERAL.—Paragraph (2) 

16 shall not apply to any amount paid or dis17 tributed from a Medisave account to the 

18 account beneficiary to the extent the 

19 amount received is paid into a Medisave 

20 account for the benefit of such beneficiary 

21 not later than the 60th day after the day 

22 on which the beneficiary receives the pay23 ment or distribution. 

24 ‘‘(ii) LIMITATION.—This paragraph 

25 shall not apply to any amount described in 


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1 clause (i) received by an individual from a 

2 Medisave account if, at any time during 

3 the 1-year period ending on the day of 

4 such receipt, such individual received any 

5 other amount described in clause (i) from 

6 a Medisave account which was not includ7 ible in the individual’s gross income be8 cause of the application of this paragraph. 

9 ‘‘(B) ROLLOVER FROM FSA, ARCHER MSA, 

10 AND HSA.—An amount is described in this sub11 paragraph for a calendar year as a rollover con12 tribution if the amount is the remaining balance 

13 in a flexible spending account, Archer MSA, or 

14 health savings account that is contributed to 

15 the Medisave account for a taxable year ending 

16 on or before one year after the date of the en17 actment of the Fair Care Act of 2020. 

18 ‘‘(6) COORDINATION WITH MEDICAL EXPENSE

19 DEDUCTION.—For purposes of determining the 

20 amount of the deduction under section 213, any pay21 ment or distribution out of a Medisave account for 

22 qualified medical expenses shall not be treated as an 

23 expense paid for medical care. 

24 ‘‘(7) TRANSFER OF ACCOUNT INCIDENT TO DI25 VORCE.—The transfer of an individual’s interest in 


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1 a Medisave account to an individual’s spouse or 

2 former spouse under a divorce or separation instru3 ment described in clause (i) of section 121(d)(3)(C) 

4 shall not be considered a taxable transfer made by 

5 such individual notwithstanding any other provision 

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

7 transfer, be treated as a Medisave account with re8 spect to which such spouse is the account bene9 ficiary. 

10 ‘‘(8) TREATMENT AFTER DEATH OF ACCOUNT

11 BENEFICIARY.— 

12 ‘‘(A) TREATMENT IF DESIGNATED BENE13 FICIARY IS SPOUSE.—If the account bene14 ficiary’s surviving spouse acquires such bene15 ficiary’s interest in a Medisave account by rea16 son of being the designated beneficiary of such 

17 account at the death of the account beneficiary, 

18 such Medisave account shall be treated as if the 

19 spouse were the account beneficiary. 

20 ‘‘(B) OTHER CASES.— 

21 ‘‘(i) IN GENERAL.—If, by reason of 

22 the death of the account beneficiary, any 

23 person acquires the account beneficiary’s 

24 interest in a Medisave account in a case to 

25 which subparagraph (A) does not apply— 


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•S 4796 IS

1 ‘‘(I) such account shall cease to 

2 be a Medisave account as of the date 

3 of death, and 

4 ‘‘(II) an amount equal to the fair 

5 market value of the assets in such ac6 count on such date shall be includible 

7 if such person is not the estate of 

8 such beneficiary, in such person’s 

9 gross income for the taxable year 

10 which includes such date, or if such 

11 person is the estate of such bene12 ficiary, in such beneficiary’s gross in13 come for the last taxable year of such 

14 beneficiary. 

15 ‘‘(ii) SPECIAL RULES.— 

16 ‘‘(I) REDUCTION OF INCLUSION

17 FOR PREDEATH EXPENSES.—The 

18 amount includible in gross income 

19 under clause (i) by any person (other 

20 than the estate) shall be reduced by 

21 the amount of qualified medical ex22 penses which were incurred by the de23 cedent before the date of the dece24 dent’s death and paid by such person 

25 within 1 year after such date. 


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•S 4796 IS

1 ‘‘(II) DEDUCTION FOR ESTATE

2 TAXES.—An appropriate deduction 

3 shall be allowed under section 691(c) 

4 to any person (other than the dece5 dent or the decedent’s spouse) with 

6 respect to amounts included in gross 

7 income under clause (i) by such per8 son. 

9 ‘‘(f) REPORTS.—The Secretary may require— 

10 ‘‘(1) the trustee of a Medisave account to make 

11 such reports regarding such account to the Secretary 

12 and to the account beneficiary with respect to con13 tributions, distributions, the return of excess con14 tributions, and such other matters as the Secretary 

15 determines appropriate, and 

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

17 a qualified health plan to make such reports to the 

18 Secretary and to the account beneficiary with re19 spect to such plan as the Secretary determines ap20 propriate. 

21 The reports required by this subsection shall be filed at 

22 such time and in such manner and furnished to such indi23 viduals at such time and in such manner as may be re24 quired by the Secretary. 


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•S 4796 IS

1 ‘‘(g) REGULATIONS AND GUIDANCE.—For purposes 

2 of this section, the Secretary shall prescribe such regula3 tions or other guidance as the Secretary determines nec4 essary or appropriate to carry out this section, including 

5 regulations or guidance on the methods acceptable to the 

6 Secretary for determining qualified health plan actuarial 

7 value.’’. 

8 (b) CLERICAL AMENDMENTS.—The table of sections 

9 for part VIII of subchapter F of chapter 1 of such Code 

10 is amended by adding at the end the following new item: 

‘‘Sec. 530A. Medisave accounts.’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years beginning after 

13 one year after the date of the enactment of this Act. 

14 SEC. 102. CONSOLIDATION OF HSAS, HRAS, FSAS, AND MSAS 

15 INTO MEDISAVE ACCOUNTS. 

16 (a) TREATMENT OF EMPLOYER PAYMENTS.— 

17 (1) EXCLUSION LIMITED TO SELF-FUNDED

18 MAJOR MEDICAL PLAN OF EMPLOYERS.—Section 

19 105(b) of the Internal Revenue Code of 1986 is 

20 amended by striking ‘‘paid,’’ and inserting ‘‘paid 

21 under a self-funded major medical plan of the em22 ployer’’. 

23 (2) EXCLUSION NOT APPLICABLE TO HEALTH

24 REIMBURSEMENT ARRANGEMENTS.—Subsection (h) 

25 of such Code is amended to read as follows: 


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•S 4796 IS

1 ‘‘(h) EXCLUSION NOT APPLICABLE TO HEALTH RE2 IMBURSEMENT ARRANGEMENTS.—Subsection (b) shall 

3 not apply to health reimbursement arrangements.’’. 

4 (3) REPEAL OF EXCLUSIONS FROM INCOME FOR

5 ARCHER MSAS, FSAS, AND HSAS.— 

6 (A) IN GENERAL.—Section 106 of such 

7 Code is amended— 

8 (i) by striking subsections (b), (d), 

9 and (e), and 

10 (ii) by redesignating subsections (f) 

11 and (g) as subsections (d) and (e), respec12 tively. 

13 (B) EXCLUSION FROM INCOME FOR

14 MEDISAVE ACCOUNTS.—Section 106 of such 

15 Code, as amended by subparagraph (A), is 

16 amended by inserting after subsection (a) the 

17 following: 

18 ‘‘(b) CONTRIBUTIONS TO MEDISAVE ACCOUNTS.— 

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

20 who is an eligible individual (as defined in section 

21 530A(c)(1)), amounts contributed by such employ22 ee’s employer to any Medisave account (as defined in 

23 section 530A(a)) of such employee shall be treated 

24 as employer-provided coverage for medical expenses 

25 under an accident or health plan to the extent such 


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•S 4796 IS

1 amounts do not exceed the limitations specified in 

2 clauses (ii) and (iii) of section 530A(a)(1)(A) (deter3 mined without regard to this subsection) which is 

4 applicable to such employee for such taxable year 

5 unless such employee is receiving and advance pay6 ment of the premium tax credit under section, then 

7 such amounts shall not be treated as employer-pro8 vided coverage for medical expense under an acci9 dent or health plan and are subject to taxation as 

10 personal income. 

11 ‘‘(2) NO CONSTRUCTIVE RECEIPT.—No amount 

12 shall be included in the gross income of any em13 ployee solely because the employee may choose be14 tween the contributions referred to in paragraph (1) 

15 and employer contributions to another health plan of 

16 the employer. 

17 ‘‘(3) SPECIAL RULE FOR DEDUCTION OF EM18 PLOYER CONTRIBUTIONS.—Any employer contribu19 tion to a Medisave account, if otherwise allowable as 

20 a deduction under this chapter, shall be allowed only 

21 for the taxable year in which paid. 

22 ‘‘(4) EMPLOYER MEDISAVE ACCOUNT CON23 TRIBUTIONS REQUIRED TO BE SHOWN ON RE24 TURN.—Every individual required to file a return 

25 under section 6012 for the taxable year shall include 


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•S 4796 IS

1 on such return the aggregate amount contributed by 

2 employers to the Medisave accounts of such indi3 vidual or such individual’s spouse for such taxable 

4 year. 

5 ‘‘(5) MEDISAVE ACCOUNT CONTRIBUTIONS NOT

6 PART OF COBRA COVERAGE.—Paragraph (1) shall 

7 not apply for purposes of section 4980B. 

8 ‘‘(6) CROSS REFERENCE.—For penalty on fail9 ure by employer to make comparable contributions 

10 to the Medisave accounts of comparable employees, 

11 see section 4980G.’’. 

12 (4) DISTRIBUTION FROM CERTAIN RETIREMENT

13 ACCOUNTS FOR MEDISAVE ACCOUNT FUNDING.— 

14 Section 408(d)(9) of such Code is amended to read 

15 as follows: 

16 ‘‘(9) DISTRIBUTION FOR MEDISAVE ACCOUNT

17 FUNDING.— 

18 ‘‘(A) IN GENERAL.—In the case of an indi19 vidual who is an eligible individual (as defined 

20 in section 530A(c)(1)) and who elects the appli21 cation of this paragraph for a taxable year, 

22 gross income of the individual for the taxable 

23 year does not include a qualified Medisave ac24 count funding distribution to the extent such 


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•S 4796 IS

1 distribution is otherwise includible in gross in2 come. 

3 ‘‘(B) QUALIFIED MEDISAVE ACCOUNT

4 FUNDING DISTRIBUTION.—For purposes of this 

5 paragraph, the term ‘qualified Medisave ac6 count funding distribution’ means a distribution 

7 from an individual retirement plan (other than 

8 a plan described in subsection (k) or (p)) of the 

9 employee to the extent that— 

10 ‘‘(i) such distribution is contributed to 

11 the Medisave account of the individual in 

12 a direct trustee-to-trustee transfer, and 

13 ‘‘(ii) such distribution— 

14 ‘‘(I) when added to previous con15 tributions to the Medisave account for 

16 the calendar year does not exceed the 

17 limitation amount specified in section 

18 530A(b)(1), and 

19 ‘‘(II) when added to the balance 

20 of the Medisave account, exceeds the 

21 limitation amount specified in section 

22 530A(b)(2). 

23 ‘‘(C) ONE-TIME TRANSFER.—An individual 

24 may make an election under subparagraph (A) 

25 only for one qualified Medisave account funding 


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•S 4796 IS

1 distribution during the lifetime of the indi2 vidual. Such an election, once made, shall be ir3 revocable. 

4 ‘‘(D) APPLICATION OF SECTION 72.—Not5 withstanding section 72, in determining the ex6 tent to which an amount is treated as otherwise 

7 includible in gross income for purposes of sub8 paragraph (A), the aggregate amount distrib9 uted from an individual retirement plan shall be 

10 treated as includible in gross income to the ex11 tent that such amount does not exceed the ag12 gregate amount which would have been so in13 cludible if all amounts from all individual retire14 ment plans were distributed. Proper adjust15 ments shall be made in applying section 72 to 

16 other distributions in such taxable year and 

17 subsequent taxable years.’’. 

18 (5) FAILURE OF EMPLOYER TO MAKE COM19 PARABLE CONTRIBUTIONS.— 

20 (A) Section 4980G(a) of such Code is 

21 amended by striking ‘‘health savings account’’ 

22 and inserting ‘‘Medisave account’’. 

23 (B) Section 4980G(c) of such Code is 

24 amended by striking ‘‘Archer MSAs and health 


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•S 4796 IS

1 savings accounts’’ and inserting ‘‘Medisave ac2 counts’’. 

3 (6) W–2 STATEMENTS.—Section 6051(a) of 

4 such Code is amended— 

5 (A) by striking paragraph (11) and redes6 ignating paragraphs (12) through (17) as para7 graphs (11) through (16), respectively, and 

8 (B) by amending paragraph (11), as so re9 designated, to read as follows: 

10 ‘‘(11) the amount contributed to any Medisave 

11 account (as defined in section 530A) of such em12 ployee or such employee’s spouse,’’. 

13 (b) OTHER CONFORMING AMENDMENTS.— 

14 (1) ARCHER MSAS.—Section 220(a) of such 

15 Code is amended by adding at the end the following: 

16 ‘‘No amount is allowed as a deduction under the 

17 preceding sentence for any taxable year beginning 

18 after one year after the date of the enactment of the 

19 Fair Care Act of 2020.’’. 

20 (2) HEALTH SAVINGS ACCOUNTS.—Section 

21 223(a) of such Code is amended by adding at the 

22 end the following: ‘‘No amount is allowed as a de23 duction under the preceding sentence for any taxable 

24 year beginning after one year after the date of the 

25 enactment of the Fair Care Act of 2020.’’. 


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•S 4796 IS

1 (c) ROLLOVER OF FSA, ARCHER MSA, HSA TO

2 MEDISAVE ACCOUNT.—Notwithstanding any other provi3 sion of law, if the remaining balance in a health flexible 

4 spending arrangement, Archer MSA, or health savings ac5 count is transferred to a Medisave account before the end 

6 of any taxable year ending on or before one year after 

7 the date of the enactment of the Fair Care Act of 2020, 

8 such transfer shall be treated as a rollover to the Medisave 

9 account under section 530A(e)(5)(B) of the Internal Rev10 enue Code of 1986 and the distribution from the health 

11 flexible spending arrangement, Archer MSA, or health 

12 savings account shall not be includible in gross income. 

13 (d) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 one year after the date of the enactment of this Act. 

16 SEC. 103. HEALTH REIMBURSEMENT ARRANGEMENTS AND 

17 OTHER ACCOUNT-BASED GROUP HEALTH 

18 PLANS. 

19 The rule published by the Internal Revenue Service, 

20 the Employee Benefits Security Administration, and the 

21 Health and Human Services Department relating to 

22 ‘‘Health Reimbursement Arrangements and Other Ac23 count-Based Group Health Plans’’ (June 20, 2019) shall 

24 have the force and effect of law. Health Reimbursement 


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•S 4796 IS

1 Arrangements as described in this rule are subject to all 

2 sections in this title. 

3 SEC. 104. COST-SHARING REDUCTION PAYMENTS AS ELIGI4 BLE CONTRIBUTIONS. 

5 (a) ALTERNATIVE WAIVER FOR STATE INNOVA6 TION.—Section 1332 of the Patient Protection and Af7 fordable Care Act (42 U.S.C. 18052) is amended by add8 ing at the end the following new subsection: 

9 ‘‘(f) ALTERNATIVE WAIVER FOR STATE INNOVA10 TION.— 

11 ‘‘(1) IN GENERAL.—Notwithstanding any pre12 ceding provision of this section, a State may apply 

13 to the Secretary for the waiver of any requirement 

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

15 coverage within that State for plan years beginning 

16 on or after January 1, 2022, if instead of complying 

17 with section 1402 the State provides for the dis18 tribution of funding received under paragraph (2) to 

19 Medisave accounts of qualifying individuals with re20 spect to such State. Such application shall be filed 

21 at such time and in such manner as the Secretary 

22 may require, and shall include such information as 

23 the Secretary may require (including a 10-year 

24 budget plan for such plan that is budget neutral for 

25 the Federal Government). 


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•S 4796 IS

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

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

3 due to the structure of such waiver, individuals in 

4 the State would not qualify for cost-sharing reduc5 tions under section 1402 for which they would other6 wise be eligible, the Secretary shall provide for an al7 ternative means by which an amount is transferred 

8 to the State equal to the aggregate amount of such 

9 reductions that would have been paid on behalf of 

10 the participants in the Exchanges established under 

11 this title— 

12 ‘‘(A) had the State not received such waiv13 er; 

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

15 under section 1402 referred to ‘qualifying in16 sureds (as defined in section 1332(f))’; 

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

18 the case of a qualifying insured enrolled in the 

19 bronze level of coverage— 

20 ‘‘(i) the percentages specified in sub21 clauses (I), (II), and (III) of section 

22 1402(c)(1)(B) were references to 84 per23 cent, 77 percent, and 63 percent, respec24 tively; and 


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•S 4796 IS

1 ‘‘(ii) the references in subparagraphs 

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

3 94 percent, 87 percent, and 73 percent, re4 spectively, were references to 84 percent, 

5 77 percent, and 63 percent, respectively; 

6 and 

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

8 in the case of a qualifying insured enrolled in 

9 the copper level of coverage— 

10 ‘‘(i) the percentages specified in sub11 clauses (I), (II), and (III) of section 

12 1402(c)(1)(B) were references to 74 per13 cent, 67 percent, and 53 percent, respec14 tively; and 

15 ‘‘(ii) the references in subparagraphs 

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

17 94 percent, 87 percent, and 73 percent, re18 spectively, were references to 74 percent, 

19 67 percent, and 53 percent, respectively. 

20 The amount transferred pursuant to the previous 

21 sentence shall be determined annually by the Sec22 retary, taking into consideration the experience of 

23 other States with respect to participation in an Ex24 change and reductions provided under such provi25 sions to residents of the other States, and shall be 


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•S 4796 IS

1 paid to the State for purposes of implementing such 

2 waiver. 

3 ‘‘(3) WAIVER CONSIDERATION AND TRANS4 PARENCY.—The provisions of paragraph (4) of sub5 section (a) shall apply to an application for a waiver 

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

7 provisions apply with respect to an application for a 

8 waiver under subsection (a)(1), except that, for pur9 poses of this paragraph, the provisions of subsection 

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

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

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

13 with respect to a determination with respect to an 

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

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

16 same manner as such provisions apply with respect 

17 to a determination with respect to an application 

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

19 term of a waiver under such subsection. 

20 ‘‘(5) DEFINITIONS.—For purposes of this sub21 section: 

22 ‘‘(A) MEDISAVE ACCOUNT.—The term 

23 ‘Medisave account’ has the meaning given such 

24 term in section 530A(a) of the Internal Rev25 enue Code of 1986. 


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•S 4796 IS

1 ‘‘(B) QUALIFYING INSURED.—The term 

2 ‘qualifying insured’ means, with respect to a 

3 State and a year, an individual— 

4 ‘‘(i) who is enrolled in a Medisave ac5 count; 

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

7 a silver, bronze, or copper level coverage 

8 offered through an Exchange; and 

9 ‘‘(iii) whose household income is not 

10 more than 250 percent of the Federal pov11 erty line for a family of the size involved.’’. 

12 (b) ADDITIONAL AMENDMENTS.—Section 1402 of 

13 the Patient Protection and Affordable Care Act (42 

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

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

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

17 (c) CONFORMING AMENDMENTS.—Section 1332 of 

18 the Patient Protection and Affordable Care Act (42 

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

20 amended in subsection (a)(4)— 

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

22 and inserting ‘‘, except in the case of a waiver de23 scribed in subsection (f).’’; and 


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•S 4796 IS

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

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

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

4 (d) APPROPRIATION FOR COST-SHARING PAY5 MENTS.—Section 1402 of the Patient Protection and Af6 fordable Care Act (42 U.S.C. 18071) is amended by add7 ing at the end the following new subsection: 

8 ‘‘(g) FUNDING.— 

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

10 the Treasury not otherwise appropriated, there is 

11 appropriated such sums as may be necessary to, 

12 subject to paragraph (2), provide health benefits 

13 coverage through payment to issuers (under this sec14 tion or through advance payment by the Secretary 

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

16 amounts computed under this section for each of 

17 plan years 2022 through 2026. 

18 ‘‘(2) ADJUSTMENTS.—Notwithstanding any 

19 other provision of law, payments and other actions 

20 for adjustments to obligations incurred prior to De21 cember 31, 2022, may be made through December 

22 31, 2022. 

23 ‘‘(3) LIMITATION.—Amounts appropriated 

24 under paragraph (1) for each of plan years 2022 

25 through 2026 are subject to the requirements and 


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•S 4796 IS

1 limitations under sections 506 and 507 of division H 

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

3 the same extent as if such amounts for each such 

4 year were appropriated under such division.’’. 

5 SEC. 105. DIRECT PRIMARY CARE. 

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

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

8 the following new subparagraph: 

9 ‘‘(D) TREATMENT OF DIRECT PRIMARY

10 CARE SERVICE ARRANGEMENTS.— 

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

12 care service arrangement shall not be 

13 treated as a health plan for purposes of 

14 subparagraph (A)(ii). 

15 ‘‘(ii) DIRECT PRIMARY CARE SERVICE

16 ARRANGEMENT.—For purposes of this 

17 paragraph— 

18 ‘‘(I) IN GENERAL.—The term ‘di19 rect primary care service arrange20 ment’ means, with respect to any indi21 vidual, an arrangement under which 

22 such individual is provided medical 

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

24 consisting solely of primary care serv25 ices provided by primary care practiVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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•S 4796 IS

1 tioners (as defined in section 

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

3 Act, determined without regard to 

4 clause (ii) thereof), if the sole com5 pensation for such care is a fixed peri6 odic fee. 

7 ‘‘(II) LIMITATION.—With respect 

8 to any individual for any month, such 

9 term shall not include any arrange10 ment if the aggregate fees for all di11 rect primary care service arrange12 ments (determined without regard to 

13 this subclause) with respect to such 

14 individual for such month exceed 

15 $150 (twice such dollar amount in the 

16 case of an individual with any direct 

17 primary care service arrangement (as 

18 so determined) that covers more than 

19 one individual). 

20 ‘‘(iii) CERTAIN SERVICES SPECIFI21 CALLY EXCLUDED FROM TREATMENT AS

22 PRIMARY CARE SERVICES.—For purposes 

23 of this paragraph, the term ‘primary care 

24 services’ shall not include— 


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•S 4796 IS

1 ‘‘(I) procedures that require the 

2 use of general anesthesia, and 

3 ‘‘(II) laboratory services not typi4 cally administered in an ambulatory 

5 primary care setting. 

6 The Secretary, after consultation with the 

7 Secretary of Health and Human Services, 

8 shall issue regulations or other guidance 

9 regarding the application of this clause.’’. 

10 (b) DIRECT PRIMARY CARE SERVICE ARRANGEMENT

11 FEES TREATED AS MEDICAL EXPENSES.—Section 

12 223(d)(2)(C) is amended by striking ‘‘or’’ at the end of 

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

14 and inserting ‘‘, or’’, and by adding at the end the fol15 lowing new clause: 

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

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

18 such Code is amended— 

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

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

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

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

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

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


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•S 4796 IS

1 by inserting after clause (ii) the following new 

2 clause: 

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

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

5 years beginning in calendar years after 

6 2020, calendar year 2019.’’. 

7 (d) REPORTING OF DIRECT PRIMARY CARE SERVICE

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

9 Code is amended by striking ‘‘and’’ at the end of para10 graph (16), by striking the period at the end of paragraph 

11 (17) and inserting ‘‘, and’’, and by inserting after para12 graph (17) the following new paragraph: 

13 ‘‘(18) in the case of a direct primary care serv14 ice arrangement (as defined in section 

15 223(c)(1)(D)(ii)) which is provided in connection 

16 with employment, the aggregate fees for such ar17 rangement for such employee.’’. 

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

19 this section shall apply to months beginning after Decem20 ber 31, 2019, in taxable years ending after such date. 

21 Subtitle B—Assistance to Medisave 

22 Accounts 

23 SEC. 111. SUPPORT IN IMPLEMENTATION. 

24 (a) IN GENERAL.—In the case of an individual who 

25 makes a contribution to a Medisave account before the end 


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•S 4796 IS

1 of the 1-year period beginning on the date of the enact2 ment of this Act, there shall be allowed as a credit against 

3 the tax imposed by subtitle A of the Internal Revenue 

4 Code of 1986 for the taxable year in which the contribu5 tion is made an amount equal to the aggregate of $1 for 

6 every $3 contributed to the account (other than a rollover 

7 contribution under section 530A(e)(5) of such Code) for 

8 such taxable year. 

9 (b) LIMITATION.—The aggregate amount allowed to 

10 an individual as a credit under subsection (a) for all tax11 able years shall not exceed $1,000. 

12 (c) PORTION OF CREDIT REFUNDABLE.—For pur13 poses of this section— 

14 (1) IN GENERAL.—For purposes of the Internal 

15 Revenue Code of 1986, in the case of an eligible in16 dividual— 

17 (A) INCREASE IN CREDIT RATE.—Sub18 section (a) shall be applied by substituting ‘‘$1 

19 for every $1 contributed’’ for ‘‘$1 for every $3 

20 contributed’’. 

21 (B) CREDIT REFUNDABLE.—The credit al22 lowed under this section shall be treated in the 

23 same manner as a credit allowed under subpart 

24 C of part IV of subchapter A of chapter 1 of 

25 such Code. 


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•S 4796 IS

1 (2) ELIGIBLE INDIVIDUAL.— 

2 (A) IN GENERAL.—The term ‘‘eligible indi3 vidual’’ means, with respect to any taxable year, 

4 a taxpayer whose household income for the tax5 able year does not exceed 400 percent of an 

6 amount equal to the poverty line for a family of 

7 the size involved. 

8 (B) MARRIED COUPLES MUST FILE JOINT

9 RETURN.—If the taxpayer is married (within 

10 the meaning of section 7703 of such Code) at 

11 the close of the taxable year— 

12 (i) the taxpayer shall be treated as an 

13 eligible individual only if the taxpayer and 

14 the taxpayer’s spouse file a joint return for 

15 the taxable year, and 

16 (ii) paragraph (1) shall be applied 

17 separately to each spouse. 

18 (3) FAMILY SIZE, HOUSEHOLD INCOME, MODI19 FIED ADJUSTED GROSS INCOME, POVERTY LINE.— 

20 The terms ‘‘family size’’, ‘‘household income’’, 

21 ‘‘modified adjusted gross income’’, and ‘‘poverty 

22 line’’ have the meaning given such terms by section 

23 36B(d) of such Code. 

24 (d) DENIAL OF CREDIT TO DEPENDENTS.—No cred25 it shall be allowed under this section to any individual with 


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•S 4796 IS

1 respect to whom a deduction under section 151 is allow2 able to another taxpayer for a taxable year beginning in 

3 the calendar year in which such individual’s taxable year 

4 begins. 

5 SEC. 112. NEW CORPORATIONS REQUIRED TO USE 

6 MEDISAVE. 

7 Notwithstanding any other provision of law, a cor8 poration incorporated after December 31, 2021, may not 

9 receive tax benefits for offering employees health insur10 ance. The previous sentence shall not apply to Medisave 

11 contributions offered by such a corporation. 

12 SEC. 113. FEDERAL EMPLOYEE HEALTH BENEFITS AND 

13 MEDISAVE. 

14 (a) IN GENERAL.—Section 1312(d)(3)(D) of the Pa15 tient Protection and Affordable Care Act (42 U.S.C. 

16 18032(d)(3)(D)) is amended— 

17 (1) in the subparagraph heading, by striking 

18 ‘‘MEMBERS OF CONGRESS’’ and inserting ‘‘PRESI19 DENT, VICE PRESIDENT, MEMBERS OF CONGRESS, 

20 AND FEDERAL EMPLOYEES’’; 

21 (2) in clause (i), in the matter preceding sub22 clause (I)— 

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

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1 dent, Vice President, Members of Congress, and 

2 Federal employees’’; and 

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

4 congressional staff’’ and inserting ‘‘the Presi5 dent, the Vice President, a Member of Con6 gress, or a Federal employee’’; and 

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

8 read as follows: 

9 ‘‘(II) FEDERAL EMPLOYEE.—The 

10 term ‘Federal employee’ means— 

11 ‘‘(aa) an ‘employee’, as such 

12 term is defined in section 2105 of 

13 title 5, United States Code; and 

14 ‘‘(bb) includes an individual 

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

16 such section 2105 pertains 

17 (whether or not such individual 

18 satisfies item (aa)).’’. 

19 (b) CONVERSION TO MEDISAVE ACCOUNTS.—Each 

20 plan offered under chapter 89 of title 5, United States 

21 Code, shall be converted into a Medisave account deposit 

22 and funded at the level of the second-least expensive silver 

23 plan available through the Exchange where the applicable 

24 individual resides. 


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1 SEC. 114. GRANTS TO STATES FOR CONSUMER ASSISTANCE. 

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

3 a grant program to provide assistance to eligible entities 

4 to carry out the activities described in subsection (c) for 

5 the 5-year period beginning on the date of the enactment 

6 of this section. 

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

8 application to the Administrator in such time and in such 

9 manner as the Administrator may require, providing that 

10 such application requires a demonstration of the existence 

11 of a relationship with, or the ability to establish a relation12 ship with, an employer, employee, self-employed indi13 vidual, or consumer eligible to enroll in a Medisave ac14 count. 

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

16 grant under this section shall use such funds to— 

17 (1) distribute fair and impartial information to 

18 consumers about Medisave accounts, including the 

19 availability of such accounts and how such accounts 

20 may be utilized; 

21 (2) conduct activities to raise public awareness 

22 of Medisave accounts; 

23 (3) facilitate enrollment in Medisave accounts; 

24 and 

25 (4) refer individuals enrolled in a Medisave ac26 count to the appropriate official, organization, or 


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•S 4796 IS

1 State agency for the purpose of addressing a com2 plaint, grievance, or other question with respect to 

3 such Medisave account. 

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

5 to $5,000,000 annually for each year occurring during the 

6 period described in subsection (a) to be divided among 

7 grant recipients under this section. 

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

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

10 section ends, the Administrator shall submit a report to 

11 the Congress on the effectiveness of the grants provided 

12 under this section. 

13 (f) DEFINITIONS.—In this section: 

14 (1) ADMINISTRATOR.—The term ‘‘Adminis15 trator’’ means the Administrator of the Centers for 

16 Medicare & Medicaid Services. 

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

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

19 Medisave account. 

20 (3) ELIGIBLE ENTITY.—The term ‘‘eligible enti21 ty’’ includes the following: 

22 (A) A State. 

23 (B) Trade. 

24 (C) Industry. 

25 (D) Professional associations. 


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•S 4796 IS

1 (E) Commercial fishing industry organiza2 tions. 

3 (F) Ranching and farming organizations. 

4 (G) Community and consumer-focused 

5 nonprofit groups. 

6 (H) Chambers of Commerce. 

7 (I) Unions. 

8 (J) Small business development centers (as 

9 defined in section 21 of the Small Business Act 

10 (15 U.S.C. 648)). 

11 (K) Other entities capable of carrying out 

12 the activities described under subsection (b). 

13 (4) MEDISAVE ACCOUNT.—The term ‘‘Medisave 

14 account’’ has the meaning given such term in section 

15 530A(a) of the Internal Revenue Code of 1986 (as 

16 added by section 2(a)). 

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

18 the several States, the District of Columbia, each 

19 territory and possession of the United States, and 

20 each federally recognized Indian Tribe. 


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1 TITLE II—IMPROVING PRIVATE 

2 HEALTH INSURANCE 

3 Subtitle A—Maintaining Protec4 tions for Patients With Pre5 existing Conditions 

6 SEC. 201. GUARANTEED AVAILABILITY OF COVERAGE; PRO7 HIBITING DISCRIMINATION. 

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

9 Insurance Portability and Accountability Act of 1996 

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

11 the following: 

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

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

14 INDIVIDUAL AND GROUP MARKET.—Subject to sub15 sections (b) through (d), each health insurance issuer that 

16 offers health insurance coverage in the individual or group 

17 market in a State must accept every employer and indi18 vidual in the State that applies for such coverage. 

19 ‘‘(b) ENROLLMENT.— 

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

21 described in subsection (a) may restrict enrollment 

22 in coverage described in such subsection to open or 

23 special enrollment periods. 

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

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1 ance with the regulations promulgated under para2 graph (3), establish special enrollment periods for 

3 qualifying events (under section 603 of the Em4 ployee Retirement Income Security Act of 1974). 

5 ‘‘(3) REGULATIONS.—The Secretary shall pro6 mulgate regulations with respect to enrollment peri7 ods under paragraphs (1) and (2). 

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

9 ‘‘(1) IN GENERAL.—In the case of a health in10 surance issuer that offers health insurance coverage 

11 in the group and individual market through a net12 work plan, the issuer may— 

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

14 for such coverage to those with eligible individ15 uals who live, work, or reside in the service area 

16 for such network plan; and 

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

18 deny such coverage to such employers and indi19 viduals if the issuer has demonstrated, if re20 quired, to the applicable State authority that— 

21 ‘‘(i) it will not have the capacity to de22 liver services adequately to enrollees of any 

23 additional groups or any additional individ24 uals because of its obligations to existing 

25 group contract holders and enrollees; and 


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•S 4796 IS

1 ‘‘(ii) it is applying this paragraph uni2 formly to all employers and individuals 

3 without regard to the claims experience of 

4 those individuals, employers and their em5 ployees (and their dependents), or any 

6 health status-related factor relating to 

7 such individuals, employees, and depend8 ents. 

9 ‘‘(2) 180-DAY SUSPENSION UPON DENIAL OF

10 COVERAGE.—An issuer, upon denying health insur11 ance coverage in any service area in accordance with 

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

13 group or individual market within such service area 

14 for a period of 180 days after the date such cov15 erage is denied. 

16 ‘‘(d) APPLICATION OF FINANCIAL CAPACITY LIM17 ITS.— 

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

19 may deny health insurance coverage in the group or 

20 individual market if the issuer has demonstrated, if 

21 required, to the applicable State authority that— 

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

23 necessary to underwrite additional coverage; 

24 and 


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1 ‘‘(B) it is applying this paragraph uni2 formly to all employers and individuals in the 

3 group or individual market in the State con4 sistent with applicable State law and without 

5 regard to the claims experience of those individ6 uals, employers and their employees (and their 

7 dependents) or any health status-related factor 

8 relating to such individuals, employees, and de9 pendents. 

10 ‘‘(2) 180-DAY SUSPENSION UPON DENIAL OF

11 COVERAGE.—A health insurance issuer upon denying 

12 health insurance coverage in connection with group 

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

14 State may not offer coverage in connection with 

15 group health plans in the group or individual market 

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

17 such coverage is denied or until the issuer has dem18 onstrated to the applicable State authority, if re19 quired under applicable State law, that the issuer 

20 has sufficient financial reserves to underwrite addi21 tional coverage, whichever is later. An applicable 

22 State authority may provide for the application of 

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

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

25 197 through 199A: 


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

2 of Health and Human Services. 

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

4 test’, ‘group health plan’, ‘group market’, ‘health in5 surance coverage’, ‘health insurance issuer’, ‘group 

6 health insurance coverage’, ‘individual health insur7 ance coverage’, ‘individual market’, and ‘under8 writing purpose’ have the meanings given such terms 

9 in section 2791 of the Public Health Service Act. 

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

11 ‘‘(a) PROHIBITING DISCRIMINATORY PREMIUM

12 RATES.— 

13 ‘‘(1) IN GENERAL.—With respect to the pre14 mium rate charged by a health insurance issuer for 

15 health insurance coverage offered in the individual 

16 or small group market— 

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

18 the particular plan or coverage involved only 

19 by— 

20 ‘‘(i) whether such plan or coverage 

21 covers an individual or family; 

22 ‘‘(ii) rating area, as established in ac23 cordance with paragraph (2); 


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•S 4796 IS

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

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

3 and 

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

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

6 and 

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

8 to the particular plan or coverage involved by 

9 any other factor not described in subparagraph 

10 (A). 

11 ‘‘(2) RATING AREA.— 

12 ‘‘(A) IN GENERAL.—Each State shall es13 tablish 1 or more rating areas within that State 

14 for purposes of applying the requirements of 

15 this title. 

16 ‘‘(B) SECRETARIAL REVIEW.—The Sec17 retary shall review the rating areas established 

18 by each State under subparagraph (A) to en19 sure the adequacy of such areas for purposes of 

20 carrying out the requirements of this title. If 

21 the Secretary determines a State’s rating areas 

22 are not adequate, or that a State does not es23 tablish such areas, the Secretary may establish 

24 rating areas for that State. 


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•S 4796 IS

1 ‘‘(3) PERMISSIBLE AGE BANDS.—The Sec2 retary, in consultation with the National Association 

3 of Insurance Commissioners, shall define the permis4 sible age bands for rating purposes under paragraph 

5 (1)(A)(iii). 

6 ‘‘(4) APPLICATION OF VARIATIONS BASED ON

7 AGE OR TOBACCO USE.—With respect to family cov8 erage under a group health plan or health insurance 

9 coverage, the rating variations permitted under 

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

11 applied based on the portion of the premium that is 

12 attributable to each family member covered under 

13 the plan or coverage. 

14 ‘‘SEC. 198. PROHIBITING DISCRIMINATION AGAINST INDI15 VIDUAL PARTICIPANTS AND BENEFICIARIES 

16 BASED ON HEALTH STATUS. 

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

18 insurance issuer offering group or individual health insur19 ance coverage may not establish rules for eligibility (in20 cluding continued eligibility) of any individual to enroll 

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

22 the following health status-related factors in relation to 

23 the individual or a dependent of the individual: 

24 ‘‘(1) Health status. 


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•S 4796 IS

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

2 and mental illnesses). 

3 ‘‘(3) Claims experience. 

4 ‘‘(4) Receipt of health care. 

5 ‘‘(5) Medical history. 

6 ‘‘(6) Genetic information. 

7 ‘‘(7) Evidence of insurability (including condi8 tions arising out of acts of domestic violence). 

9 ‘‘(8) Disability. 

10 ‘‘(9) Any other health status-related factor de11 termined appropriate by the Secretary. 

12 ‘‘(b) IN PREMIUM CONTRIBUTIONS.— 

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

14 health insurance issuer offering group or individual 

15 health insurance coverage, may not require any indi16 vidual (as a condition of enrollment or continued en17 rollment under the plan) to pay a premium or con18 tribution which is greater than such premium or 

19 contribution for a similarly situated individual en20 rolled in the plan on the basis of any health status21 related factor in relation to the individual or to an 

22 individual enrolled under the plan as a dependent of 

23 the individual. 

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

25 (1) shall be construed— 


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•S 4796 IS

1 ‘‘(A) to restrict the amount that an em2 ployer or individual may be charged for cov3 erage under a group health plan except as pro4 vided in paragraph (3) or individual health cov5 erage, as the case may be; or 

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

7 a health insurance issuer offering group health 

8 insurance coverage, from establishing premium 

9 discounts or rebates or modifying otherwise ap10 plicable copayments or deductibles in return for 

11 adherence to programs of health promotion and 

12 disease prevention. 

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

14 BASIS OF GENETIC INFORMATION.— 

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

16 section, a group health plan, and health insur17 ance issuer offering group health insurance cov18 erage in connection with a group health plan, 

19 may not adjust premium or contribution 

20 amounts for the group covered under such plan 

21 on the basis of genetic information. 

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

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

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

25 the ability of a health insurance issuer offering 


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•S 4796 IS

1 group or individual health insurance coverage to 

2 increase the premium for an employer based on 

3 the manifestation of a disease or disorder of an 

4 individual who is enrolled in the plan. In such 

5 case, the manifestation of a disease or disorder 

6 in one individual cannot also be used as genetic 

7 information about other group members and to 

8 further increase the premium for the employer. 

9 ‘‘(c) GENETIC TESTING.— 

10 ‘‘(1) LIMITATION ON REQUESTING OR REQUIR11 ING GENETIC TESTING.—A group health plan, and a 

12 health insurance issuer offering health insurance 

13 coverage in connection with a group health plan, 

14 shall not request or require an individual or a family 

15 member of such individual to undergo a genetic test. 

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

17 shall not be construed to limit the authority of a 

18 health care professional who is providing health care 

19 services to an individual to request that such indi20 vidual undergo a genetic test. 

21 ‘‘(3) RULE OF CONSTRUCTION REGARDING PAY22 MENT.— 

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

24 (1) shall be construed to preclude a group 

25 health plan, or a health insurance issuer offerVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 ing health insurance coverage in connection 

2 with a group health plan, from obtaining and 

3 using the results of a genetic test in making a 

4 determination regarding payment (as such term 

5 is defined for the purposes of applying the regu6 lations promulgated by the Secretary under 

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

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

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

10 ‘‘(B) LIMITATION.—For purposes of sub11 paragraph (A), a group health plan, or a health 

12 insurance issuer offering health insurance cov13 erage in connection with a group health plan, 

14 may request only the minimum amount of in15 formation necessary to accomplish the intended 

16 purpose. 

17 ‘‘(4) RESEARCH EXCEPTION.—Notwithstanding 

18 paragraph (1), a group health plan, or a health in19 surance issuer offering health insurance coverage in 

20 connection with a group health plan, may request, 

21 but not require, that a participant or beneficiary un22 dergo a genetic test if each of the following condi23 tions is met: 

24 ‘‘(A) The request is made pursuant to re25 search that complies with part 46 of title 45, 


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•S 4796 IS

1 Code of Federal Regulations, or equivalent Fed2 eral regulations, and any applicable State or 

3 local law or regulations for the protection of 

4 human subjects in research. 

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

6 each participant or beneficiary, or in the case of 

7 a minor child, to the legal guardian of such 

8 beneficiary, to whom the request is made that— 

9 ‘‘(i) compliance with the request is 

10 voluntary; and 

11 ‘‘(ii) noncompliance will have no effect 

12 on enrollment status or premium or con13 tribution amounts. 

14 ‘‘(C) No genetic information collected or 

15 acquired under this paragraph shall be used for 

16 underwriting purposes. 

17 ‘‘(D) The plan or issuer notifies the Sec18 retary in writing that the plan or issuer is con19 ducting activities pursuant to the exception pro20 vided for under this paragraph, including a de21 scription of the activities conducted. 

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

23 other conditions as the Secretary may by regu24 lation require for activities conducted under this 

25 paragraph. 


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1 ‘‘(d) PROHIBITION ON COLLECTION OF GENETIC IN2 FORMATION.— 

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

4 health insurance issuer offering health insurance 

5 coverage in connection with a group health plan, 

6 shall not request, require, or purchase genetic infor7 mation for underwriting purposes. 

8 ‘‘(2) PROHIBITION ON COLLECTION OF GE9 NETIC INFORMATION PRIOR TO ENROLLMENT.—A 

10 group health plan, and a health insurance issuer of11 fering health insurance coverage in connection with 

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

13 purchase genetic information with respect to any in14 dividual prior to such individual’s enrollment under 

15 the plan or coverage in connection with such enroll16 ment. 

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

18 health plan, or a health insurance issuer offering 

19 health insurance coverage in connection with a group 

20 health plan, obtains genetic information incidental to 

21 the requesting, requiring, or purchasing of other in22 formation concerning any individual, such request, 

23 requirement, or purchase shall not be considered a 

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1 ment, or purchase is not in violation of paragraph 

2 (1). 

3 ‘‘(e) GENETIC INFORMATION OF A FETUS OR EM4 BRYO.—Any reference in this part to genetic information 

5 concerning an individual or family member of an indi6 vidual shall— 

7 ‘‘(1) with respect to such an individual or fam8 ily member of an individual who is a pregnant 

9 woman, include genetic information of any fetus car10 ried by such pregnant woman; and 

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

12 member utilizing an assisted reproductive tech13 nology, include genetic information of any embryo le14 gally held by the individual or family member. 

15 ‘‘(f) PROGRAMS OF HEALTH PROMOTION OR DIS16 EASE PREVENTION.— 

17 ‘‘(1) GENERAL PROVISIONS.— 

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

19 subsection (b)(2)(B), a program of health pro20 motion or disease prevention (referred to in this 

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

22 program offered by an employer that is de23 signed to promote health or prevent disease 

24 that meets the applicable requirements of this 

25 subsection. 


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1 ‘‘(B) NO CONDITIONS BASED ON HEALTH

2 STATUS FACTOR.—If none of the conditions for 

3 obtaining a premium discount or rebate or 

4 other reward for participation in a wellness pro5 gram is based on an individual satisfying a 

6 standard that is related to a health status fac7 tor, such wellness program shall not violate this 

8 section if participation in the program is made 

9 available to all similarly situated individuals 

10 and the requirements of paragraph (2) are com11 plied with. 

12 ‘‘(C) CONDITIONS BASED ON HEALTH STA13 TUS FACTOR.—If any of the conditions for ob14 taining a premium discount or rebate or other 

15 reward for participation in a wellness program 

16 is based on an individual satisfying a standard 

17 that is related to a health status factor, such 

18 wellness program shall not violate this section if 

19 the requirements of paragraph (3) are complied 

20 with. 

21 ‘‘(2) WELLNESS PROGRAMS NOT SUBJECT TO

22 REQUIREMENTS.—If none of the conditions for ob23 taining a premium discount or rebate or other re24 ward under a wellness program as described in para25 graph (1)(B) are based on an individual satisfying 


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•S 4796 IS

1 a standard that is related to a health status factor 

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

3 a reward), the wellness program shall not violate 

4 this section if participation in the program is made 

5 available to all similarly situated individuals. The 

6 following programs shall not have to comply with the 

7 requirements of paragraph (3) if participation in the 

8 program is made available to all similarly situated 

9 individuals: 

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

11 part of the cost for memberships in a fitness 

12 center. 

13 ‘‘(B) A diagnostic testing program that 

14 provides a reward for participation and does 

15 not base any part of the reward on outcomes. 

16 ‘‘(C) A program that encourages preven17 tive care related to a health condition through 

18 the waiver of the copayment or deductible re19 quirement under group health plan for the costs 

20 of certain items or services related to a health 

21 condition (such as prenatal care or well-baby 

22 visits). 

23 ‘‘(D) A program that reimburses individ24 uals for the costs of smoking cessation proVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 grams without regard to whether the individual 

2 quits smoking. 

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

4 individuals for attending a periodic health edu5 cation seminar. 

6 ‘‘(3) WELLNESS PROGRAMS SUBJECT TO RE7 QUIREMENTS.—If any of the conditions for obtaining 

8 a premium discount, rebate, or reward under a 

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

10 is based on an individual satisfying a standard that 

11 is related to a health status factor, the wellness pro12 gram shall not violate this section if the following re13 quirements are complied with: 

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

15 together with the reward for other wellness pro16 grams with respect to the plan that requires 

17 satisfaction of a standard related to a health 

18 status factor, shall not exceed 30 percent of the 

19 cost of employee-only coverage under the plan. 

20 If, in addition to employees or individuals, any 

21 class of dependents (such as spouses or spouses 

22 and dependent children) may participate fully 

23 in the wellness program, such reward shall not 

24 exceed 30 percent of the cost of the coverage in 

25 which an employee or individual and any deVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 pendents are enrolled. For purposes of this 

2 paragraph, the cost of coverage shall be deter3 mined based on the total amount of employer 

4 and employee contributions for the benefit 

5 package under which the employee is (or the 

6 employee and any dependents are) receiving 

7 coverage. A reward may be in the form of a dis8 count or rebate of a premium or contribution, 

9 a waiver of all or part of a cost-sharing mecha10 nism (such as deductibles, copayments, or coin11 surance), the absence of a surcharge, or the 

12 value of a benefit that would otherwise not be 

13 provided under the plan. The Secretaries of 

14 Labor, Health and Human Services, and the 

15 Treasury may increase the reward available 

16 under this subparagraph to up to 50 percent of 

17 the cost of coverage if the Secretaries determine 

18 that such an increase is appropriate. 

19 ‘‘(B) The wellness program shall be rea20 sonably designed to promote health or prevent 

21 disease. A program complies with the preceding 

22 sentence if the program has a reasonable 

23 chance of improving the health of, or preventing 

24 disease in, participating individuals and it is 

25 not overly burdensome, is not a subterfuge for 


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•S 4796 IS

1 discriminating based on a health status factor, 

2 and is not highly suspect in the method chosen 

3 to promote health or prevent disease. 

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

5 for the program the opportunity to qualify for 

6 the reward under the program at least once 

7 each year. 

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

9 program shall be made available to all similarly 

10 situated individuals. For such purpose, among 

11 other things: 

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

13 similarly situated individuals for a period 

14 unless the wellness program allows— 

15 ‘‘(I) for a reasonable alternative 

16 standard (or waiver of the otherwise 

17 applicable standard) for obtaining the 

18 reward for any individual for whom, 

19 for that period, it is unreasonably dif20 ficult due to a medical condition to 

21 satisfy the otherwise applicable stand22 ard; and 

23 ‘‘(II) for a reasonable alternative 

24 standard (or waiver of the otherwise 

25 applicable standard) for obtaining the 


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•S 4796 IS

1 reward for any individual for whom, 

2 for that period, it is medically inadvis3 able to attempt to satisfy the other4 wise applicable standard. 

5 ‘‘(ii) If reasonable under the cir6 cumstances, the plan or issuer may seek 

7 verification, such as a statement from an 

8 individual’s physician, that a health status 

9 factor makes it unreasonably difficult or 

10 medically inadvisable for the individual to 

11 satisfy or attempt to satisfy the otherwise 

12 applicable standard. 

13 ‘‘(E) The plan or issuer involved shall dis14 close in all plan materials describing the terms 

15 of the wellness program the availability of a 

16 reasonable alternative standard (or the possi17 bility of waiver of the otherwise applicable 

18 standard) required under subparagraph (D). If 

19 plan materials disclose that such a program is 

20 available, without describing its terms, the dis21 closure under this subparagraph shall not be re22 quired. 


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1 ‘‘SEC. 199. PROHIBITION OF PREEXISTING CONDITION EX2 CLUSIONS OR OTHER DISCRIMINATION 

3 BASED ON HEALTH STATUS. 

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

5 insurance issuer offering group or individual health insur6 ance coverage may not impose any preexisting condition 

7 exclusion with respect to such plan or coverage. 

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

9 ‘‘(1) PREEXISTING CONDITION EXCLUSION.— 

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

11 condition exclusion’ means, with respect to cov12 erage, a limitation or exclusion of benefits relat13 ing to a condition based on the fact that the 

14 condition was present before the date of enroll15 ment for such coverage, whether or not any 

16 medical advice, diagnosis, care, or treatment 

17 was recommended or received before such date. 

18 ‘‘(B) TREATMENT OF GENETIC INFORMA19 TION.—Genetic information shall not be treated 

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

21 the absence of a diagnosis of the condition re22 lated to such information. 

23 ‘‘(2) ENROLLMENT DATE.—The term ‘enroll24 ment date’ means, with respect to an individual cov25 ered under a group health plan or health insurance 

26 coverage, the date of enrollment of the individual in 


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•S 4796 IS

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

2 the waiting period for such enrollment. 

3 ‘‘(3) LATE ENROLLEE.—The term ‘late en4 rollee’ means, with respect to coverage under a 

5 group health plan, a participant or beneficiary who 

6 enrolls under the plan other than during— 

7 ‘‘(A) the first period in which the indi8 vidual is eligible to enroll under the plan; or 

9 ‘‘(B) a special enrollment period under 

10 subsection (f). 

11 ‘‘(4) WAITING PERIOD.—The term ‘waiting pe12 riod’ means, with respect to a group health plan and 

13 an individual who is a potential participant or bene14 ficiary in the plan, the period that must pass with 

15 respect to the individual before the individual is eli16 gible to be covered for benefits under the terms of 

17 the plan. 

18 ‘‘(c) RULES RELATING TO CREDITING PREVIOUS

19 COVERAGE.— 

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

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

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

23 individual under any of the following: 

24 ‘‘(A) A group health plan. 

25 ‘‘(B) Health insurance coverage. 


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

2 Social Security Act. 

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

4 other than coverage consisting solely of benefits 

5 under section 1928. 

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

7 Code. 

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

9 Health Service or of a tribal organization. 

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

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

12 89 of title 5, United States Code. 

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

14 regulations). 

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

16 5(e) of the Peace Corps Act (22 U.S.C. 

17 2504(e)). 

18 Such term does not include coverage consisting sole19 ly of coverage of excepted benefits (as defined in sec20 tion 2791(c)). 

21 ‘‘(2) NOT COUNTING PERIODS BEFORE SIGNIFI22 CANT BREAKS IN COVERAGE.— 

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

24 coverage shall not be counted, with respect to 

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1 dividual health plan, if, after such period and 

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

3 period during all of which the individual was 

4 not covered under any creditable coverage. 

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

6 BREAK IN COVERAGE.—For purposes of sub7 paragraph (A) and subsection (d)(4), any pe8 riod that an individual is in a waiting period for 

9 any coverage under a group or individual health 

10 plan (or for group health insurance coverage) or 

11 is in an affiliation period (as defined in sub12 section (g)(2)) shall not be taken into account 

13 in determining the continuous period under 

14 subparagraph (A). 

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

16 case of plan years beginning before January 1, 

17 2014— 

18 ‘‘(i) TAA PRE-CERTIFICATION PERIOD

19 RULE.—In the case of a TAA-eligible indi20 vidual, the period beginning on the date 

21 the individual has a TAA-related loss of 

22 coverage and ending on the date that is 7 

23 days after the date of the issuance by the 

24 Secretary (or by any person or entity des25 ignated by the Secretary) of a qualified 


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•S 4796 IS

1 health insurance costs credit eligibility cer2 tificate for such individual for purposes of 

3 section 7527 of the Internal Revenue Code 

4 of 1986 shall not be taken into account in 

5 determining the continuous period under 

6 subparagraph (A). 

7 ‘‘(ii) DEFINITIONS.—The terms ‘TAA8 eligible individual’ and ‘TAA-related loss of 

9 coverage’ have the meanings given such 

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

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

12 ‘‘(A) STANDARD METHOD.—Except as oth13 erwise provided under subparagraph (B), for 

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

15 health plan, and a health insurance issuer offer16 ing group or individual health insurance cov17 erage, shall count a period of creditable cov18 erage without regard to the specific benefits 

19 covered during the period. 

20 ‘‘(B) ELECTION OF ALTERNATIVE METH21 OD.—A group health plan, or a health insur22 ance issuer offering group or individual health 

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

24 based on coverage of benefits within each of 

25 several classes or categories of benefits specified 


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•S 4796 IS

1 in regulations rather than as provided under 

2 subparagraph (A). Such election shall be made 

3 on a uniform basis for all participants and 

4 beneficiaries. Under such election a group or in5 dividual health plan or issuer shall count a pe6 riod of creditable coverage with respect to any 

7 class or category of benefits if any level of bene8 fits is covered within such class or category. 

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

10 election with respect to a group health plan 

11 under subparagraph (B) (whether or not health 

12 insurance coverage is provided in connection 

13 with such plan), the plan shall— 

14 ‘‘(i) prominently state in any disclo15 sure statements concerning the plan, and 

16 state to each enrollee at the time of enroll17 ment under the plan, that the plan has 

18 made such election; and 

19 ‘‘(ii) include in such statements a de20 scription of the effect of this election. 

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

22 election under subparagraph (B) with respect to 

23 health insurance coverage offered by an issuer 

24 in the individual or group market, the issuer— 


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•S 4796 IS

1 ‘‘(i) shall prominently state in any dis2 closure statements concerning the cov3 erage, and to each employer at the time of 

4 the offer or sale of the coverage, that the 

5 issuer has made such election; and 

6 ‘‘(ii) shall include in such statements 

7 a description of the effect of such election. 

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

9 creditable coverage with respect to an individual 

10 shall be established through presentation of certifi11 cations described in subsection (e) or in such other 

12 manner as may be specified in regulations. 

13 ‘‘(d) EXCEPTIONS.— 

14 ‘‘(1) EXCLUSION NOT APPLICABLE TO CERTAIN

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

16 health plan, and a health insurance issuer offering 

17 group or individual health insurance coverage, may 

18 not impose any preexisting condition exclusion in the 

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

20 30-day period beginning with the date of birth, is 

21 covered under creditable coverage. 

22 ‘‘(2) EXCLUSION NOT APPLICABLE TO CERTAIN

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

24 group health plan, and a health insurance issuer of25 fering group or individual health insurance coverage, 


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•S 4796 IS

1 may not impose any preexisting condition exclusion 

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

3 adoption before attaining 18 years of age and who, 

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

5 the date of the adoption or placement for adoption, 

6 is covered under creditable coverage. The previous 

7 sentence shall not apply to coverage before the date 

8 of such adoption or placement for adoption. 

9 ‘‘(3) EXCLUSION NOT APPLICABLE TO PREG10 NANCY.—A group health plan, and health insurance 

11 issuer offering group or individual health insurance 

12 coverage, may not impose any preexisting condition 

13 exclusion relating to pregnancy as a preexisting con14 dition. 

15 ‘‘(4) LOSS IF BREAK IN COVERAGE.—Para16 graphs (1) and (2) shall no longer apply to an indi17 vidual after the end of the first 63-day period during 

18 all of which the individual was not covered under 

19 any creditable coverage. 

20 ‘‘(e) CERTIFICATIONS AND DISCLOSURE OF COV21 ERAGE.— 

22 ‘‘(1) REQUIREMENT FOR CERTIFICATION OF

23 PERIOD OF CREDITABLE COVERAGE.— 

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

25 and a health insurance issuer offering group or 


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•S 4796 IS

1 individual health insurance coverage, shall pro2 vide the certification described in subparagraph 

3 (B)— 

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

5 to be covered under the plan or otherwise 

6 becomes covered under a COBRA continu7 ation provision; 

8 ‘‘(ii) in the case of an individual be9 coming covered under such a provision, at 

10 the time the individual ceases to be covered 

11 under such provision; and 

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

13 individual made not later than 24 months 

14 after the date of cessation of the coverage 

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

16 later. 

17 The certification under clause (i) may be pro18 vided, to the extent practicable, at a time con19 sistent with notices required under any applica20 ble COBRA continuation provision. 

21 ‘‘(B) CERTIFICATION.—The certification 

22 described in this subparagraph is a written cer23 tification of— 

24 ‘‘(i) the period of creditable coverage 

25 of the individual under such plan and the 


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•S 4796 IS

1 coverage (if any) under such COBRA con2 tinuation provision; and 

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

4 affiliation period, if applicable) imposed 

5 with respect to the individual for any cov6 erage under such plan. 

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

8 that medical care under a group health plan 

9 consists of group health insurance coverage, the 

10 plan is deemed to have satisfied the certification 

11 requirement under this paragraph if the health 

12 insurance issuer offering the coverage provides 

13 for such certification in accordance with this 

14 paragraph. 

15 ‘‘(2) DISCLOSURE OF INFORMATION ON PRE16 VIOUS BENEFITS.—In the case of an election de17 scribed in subsection (c)(3)(B) by a group health 

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

19 enrolls an individual for coverage under the plan and 

20 the individual provides a certification of coverage of 

21 the individual under paragraph (1)— 

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

23 the entity which issued the certification pro24 vided by the individual shall promptly disclose 

25 to such requesting plan or issuer information 


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•S 4796 IS

1 on coverage of classes and categories of health 

2 benefits available under such entity’s plan or 

3 coverage; and 

4 ‘‘(B) such entity may charge the request5 ing plan or issuer for the reasonable cost of dis6 closing such information. 

7 ‘‘(3) REGULATIONS.—The Secretary shall es8 tablish rules to prevent an entity’s failure to provide 

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

10 to previous coverage of an individual from adversely 

11 affecting any subsequent coverage of the individual 

12 under another group health plan or health insurance 

13 coverage. 

14 ‘‘(f) SPECIAL ENROLLMENT PERIODS.— 

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

16 A group health plan, and a health insurance issuer 

17 offering group health insurance coverage in connec18 tion with a group health plan, shall permit an em19 ployee who is eligible, but not enrolled, for coverage 

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

21 an employee if the dependent is eligible, but not en22 rolled, for coverage under such terms) to enroll for 

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

24 following conditions is met: 


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•S 4796 IS

1 ‘‘(A) The employee or dependent was cov2 ered under a group health plan or had health 

3 insurance coverage at the time coverage was 

4 previously offered to the employee or dependent. 

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

6 such time that coverage under a group health 

7 plan or health insurance coverage was the rea8 son for declining enrollment, but only if the 

9 plan sponsor or issuer (if applicable) required 

10 such a statement at such time and provided the 

11 employee with notice of such requirement (and 

12 the consequences of such requirement) at such 

13 time. 

14 ‘‘(C) The employee’s or dependent’s cov15 erage described in subparagraph (A)— 

16 ‘‘(i) was under a COBRA continu17 ation provision and the coverage under 

18 such provision was exhausted; or 

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

20 and either the coverage was terminated as 

21 a result of loss of eligibility for the cov22 erage (including as a result of legal separa23 tion, divorce, death, termination of employ24 ment, or reduction in the number of hours 


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•S 4796 IS

1 of employment) or employer contributions 

2 toward such coverage were terminated. 

3 ‘‘(D) Under the terms of the plan, the em4 ployee requests such enrollment not later than 

5 30 days after the date of exhaustion of coverage 

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

7 of coverage or employer contribution described 

8 in subparagraph (C)(ii). 

9 ‘‘(2) FOR DEPENDENT BENEFICIARIES.— 

10 ‘‘(A) IN GENERAL.—If— 

11 ‘‘(i) a group health plan makes cov12 erage available with respect to a dependent 

13 of an individual; 

14 ‘‘(ii) the individual is a participant 

15 under the plan (or has met any waiting pe16 riod applicable to becoming a participant 

17 under the plan and is eligible to be enrolled 

18 under the plan but for a failure to enroll 

19 during a previous enrollment period); and 

20 ‘‘(iii) a person becomes such a de21 pendent of the individual through mar22 riage, birth, or adoption or placement for 

23 adoption, 

24 the group health plan shall provide for a de25 pendent special enrollment period described in 


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•S 4796 IS

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

2 if not otherwise enrolled, the individual) may be 

3 enrolled under the plan as a dependent of the 

4 individual, and in the case of the birth or adop5 tion of a child, the spouse of the individual may 

6 be enrolled as a dependent of the individual if 

7 such spouse is otherwise eligible for coverage. 

8 ‘‘(B) DEPENDENT SPECIAL ENROLLMENT

9 PERIOD.—A dependent special enrollment pe10 riod under this subparagraph shall be a period 

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

12 later of— 

13 ‘‘(i) the date dependent coverage is 

14 made available; or 

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

16 or adoption or placement for adoption (as 

17 the case may be) described in subpara18 graph (A)(iii). 

19 ‘‘(C) NO WAITING PERIOD.—If an indi20 vidual seeks to enroll a dependent during the 

21 first 30 days of such a dependent special enroll22 ment period, the coverage of the dependent 

23 shall become effective— 

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

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1 ning after the date the completed request 

2 for enrollment is received; 

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

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

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

6 adoption or placement for adoption, the 

7 date of such adoption or placement for 

8 adoption. 

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

10 OF MEDICAID AND CHIP.— 

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

12 and a health insurance issuer offering group 

13 health insurance coverage in connection with a 

14 group health plan, shall permit an employee 

15 who is eligible, but not enrolled, for coverage 

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

17 such an employee if the dependent is eligible, 

18 but not enrolled, for coverage under such 

19 terms) to enroll for coverage under the terms of 

20 the plan if either of the following conditions is 

21 met: 

22 ‘‘(i) TERMINATION OF MEDICAID OR

23 CHIP COVERAGE.—The employee or de24 pendent is covered under a Medicaid plan 

25 under title XIX of the Social Security Act 


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•S 4796 IS

1 or under a State child health plan under 

2 title XXI of such Act and coverage of the 

3 employee or dependent under such a plan 

4 is terminated as a result of loss of eligi5 bility for such coverage and the employee 

6 requests coverage under the group health 

7 plan (or health insurance coverage) not 

8 later than 60 days after the date of termi9 nation of such coverage. 

10 ‘‘(ii) ELIGIBILITY FOR EMPLOYMENT

11 ASSISTANCE UNDER MEDICAID OR CHIP.— 

12 The employee or dependent becomes eligi13 ble for assistance, with respect to coverage 

14 under the group health plan or health in15 surance coverage, under such Medicaid 

16 plan or State child health plan (including 

17 under any waiver or demonstration project 

18 conducted under or in relation to such a 

19 plan), if the employee requests coverage 

20 under the group health plan or health in21 surance coverage not later than 60 days 

22 after the date the employee or dependent is 

23 determined to be eligible for such assist24 ance. 


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1 ‘‘(B) COORDINATION WITH MEDICAID AND

2 CHIP.— 

3 ‘‘(i) OUTREACH TO EMPLOYEES RE4 GARDING AVAILABILITY OF MEDICAID AND

5 CHIP COVERAGE.— 

6 ‘‘(I) IN GENERAL.—Each em7 ployer that maintains a group health 

8 plan in a State that provides medical 

9 assistance under a State Medicaid 

10 plan under title XIX of the Social Se11 curity Act, or child health assistance 

12 under a State child health plan under 

13 title XXI of such Act, in the form of 

14 premium assistance for the purchase 

15 of coverage under a group health 

16 plan, shall provide to each employee a 

17 written notice informing the employee 

18 of potential opportunities then cur19 rently available in the State in which 

20 the employee resides for premium as21 sistance under such plans for health 

22 coverage of the employee or the em23 ployee’s dependents. For purposes of 

24 compliance with this subclause, the 

25 employer may use any State-specific 


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•S 4796 IS

1 model notice developed in accordance 

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

3 Employee Retirement Income Security 

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

5 1181(f)(3)(B)(i)(II)). 

6 ‘‘(II) OPTION TO PROVIDE CON7 CURRENT WITH PROVISION OF PLAN

8 MATERIALS TO EMPLOYEE.—An em9 ployer may provide the model notice 

10 applicable to the State in which an 

11 employee resides concurrent with the 

12 furnishing of materials notifying the 

13 employee of health plan eligibility, 

14 concurrent with materials provided to 

15 the employee in connection with an 

16 open season or election process con17 ducted under the plan, or concurrent 

18 with the furnishing of the summary 

19 plan description as provided in section 

20 104(b) of the Employee Retirement 

21 Income Security Act of 1974. 

22 ‘‘(ii) DISCLOSURE ABOUT GROUP

23 HEALTH PLAN BENEFITS TO STATES FOR

24 MEDICAID AND CHIP ELIGIBLE INDIVID25 UALS.—In the case of an enrollee in a 


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•S 4796 IS

1 group health plan who is covered under a 

2 Medicaid plan of a State under title XIX 

3 of the Social Security Act or under a State 

4 child health plan under title XXI of such 

5 Act, the plan administrator of the group 

6 health plan shall disclose to the State, 

7 upon request, information about the bene8 fits available under the group health plan 

9 in sufficient specificity, as determined 

10 under regulations of the Secretary of 

11 Health and Human Services in consulta12 tion with the Secretary that require use of 

13 the model coverage coordination disclosure 

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

15 of the Children’s Health Insurance Reau16 thorization Act of 2009, so as to permit 

17 the State to make a determination (under 

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

19 2105(c) of the Social Security Act or oth20 erwise) concerning the cost-effectiveness of 

21 the State providing medical or child health 

22 assistance through premium assistance for 

23 the purchase of coverage under such group 

24 health plan and in order for the State to 

25 provide supplemental benefits required 


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•S 4796 IS

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

2 or other authority. 

3 ‘‘(g) USE OF AFFILIATION PERIOD BY HMOS AS AL4 TERNATIVE TO PREEXISTING CONDITION EXCLUSION.— 

5 ‘‘(1) IN GENERAL.—A health maintenance orga6 nization which offers health insurance coverage in 

7 connection with a group health plan and which does 

8 not impose any preexisting condition exclusion al9 lowed under subsection (a) with respect to any par10 ticular coverage option may impose an affiliation pe11 riod for such coverage option, but only if— 

12 ‘‘(A) such period is applied uniformly with13 out regard to any health status-related factors; 

14 and 

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

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

17 ‘‘(2) AFFILIATION PERIOD.— 

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

19 title, the term ‘affiliation period’ means a pe20 riod which, under the terms of the health insur21 ance coverage offered by the health mainte22 nance organization, must expire before the 

23 health insurance coverage becomes effective. 

24 The organization is not required to provide 

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1 riod and no premium shall be charged to the 

2 participant or beneficiary for any coverage dur3 ing the period. 

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

5 on the enrollment date. 

6 ‘‘(C) RUNS CONCURRENTLY WITH WAITING

7 PERIODS.—An affiliation period under a plan 

8 shall run concurrently with any waiting period 

9 under the plan. 

10 ‘‘(3) ALTERNATIVE METHODS.—A health main11 tenance organization described in paragraph (1) may 

12 use alternative methods, from those described in 

13 such paragraph, to address adverse selection as ap14 proved by the State insurance commissioner or offi15 cial or officials designated by the State to enforce 

16 the requirements of this part for the State involved 

17 with respect to such issuer. 

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

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

20 insurance issuer offering group or individual health insur21 ance coverage that provides dependent coverage of chil22 dren shall continue to make such coverage available for 

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

24 26 years of age. Nothing in this section shall require a 

25 health plan or a health insurance issuer described in the 


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•S 4796 IS

1 preceding sentence to make coverage available for a child 

2 of a child receiving dependent coverage. 

3 ‘‘(b) REGULATIONS.—The Secretary shall promul4 gate regulations to define the dependents to which cov5 erage shall be made available under subsection (a). 

6 ‘‘(c) RULE OF CONSTRUCTION.—Nothing in this sec7 tion shall be construed to modify the definition of ‘depend8 ent’ as used in the Internal Revenue Code of 1986 with 

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

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

11 ‘‘(a) IN GENERAL.— 

12 ‘‘(1) 2014.—The cost-sharing incurred under a 

13 group health plan or group or individual health in14 surance coverage with respect to self-only coverage 

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

16 year beginning in 2014 shall not exceed the dollar 

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

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

19 family coverage, respectively, for taxable years begin20 ning in 2014. 

21 ‘‘(2) 2015 AND LATER.—In the case of any 

22 plan year beginning in a calendar year after 2014, 

23 the limitation under this paragraph shall— 

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

25 equal to the dollar amount under paragraph (1) 


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•S 4796 IS

1 for self-only coverage for plan years beginning 

2 in 2014, increased by an amount equal to the 

3 product of that amount and the premium ad4 justment percentage under subsection (c) for 

5 the calendar year; and 

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

7 the amount in effect under subparagraph (A). 

8 If the amount of any increase under subparagraph 

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

10 rounded to the next lowest multiple of $50. 

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

12 ‘‘(1) IN GENERAL.—The term ‘cost-sharing’ in13 cludes— 

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

15 or similar charges; and 

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

17 insured individual which is a qualified medical 

18 expense (within the meaning of section 

19 223(d)(2) of the Internal Revenue Code of 

20 1986) with respect to essential health benefits 

21 covered under the plan. 

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

23 premiums, balance billing amounts for non-network 

24 providers, or spending for non-covered services. 


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

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

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

4 by which the average per capita premium for health insur5 ance coverage in the United States for the preceding cal6 endar year (as estimated by the Secretary no later than 

7 October 1 of such preceding calendar year) exceeds such 

8 average per capita premium for 2013 (as determined by 

9 the Secretary). 

10 ‘‘SEC. 199C. ENFORCEMENT OF CERTAIN HEALTH INSUR11 ANCE REQUIREMENTS. 

12 ‘‘(a) STATE ENFORCEMENT.— 

13 ‘‘(1) STATE AUTHORITY.—Each State may re14 quire that health insurance issuers that issue, sell, 

15 renew, or offer health insurance coverage in the 

16 State in the individual or group market meet the re17 quirements of this part with respect to such issuers. 

18 ‘‘(2) FAILURE TO IMPLEMENT PROVISIONS.—In 

19 the case of a determination by the Secretary that a 

20 State has failed to substantially enforce a provision 

21 (or provisions) of sections 196 through 199A with 

22 respect to health insurance issuers in the State, the 

23 Secretary shall enforce such provision (or provisions) 

24 under subsection (b) insofar as they relate to the 

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1 ance coverage in connection with group health plans 

2 or individual health insurance coverage in such 

3 State. 

4 ‘‘(b) SECRETARIAL ENFORCEMENT AUTHORITY.— 

5 ‘‘(1) LIMITATION.—The provisions of this sub6 section shall apply to enforcement of a provision (or 

7 provisions) described in subsection (a)(2) only— 

8 ‘‘(A) as provided under such subsection; 

9 and 

10 ‘‘(B) with respect to individual health in11 surance coverage or group health plans that are 

12 non-Federal governmental plans. 

13 ‘‘(2) IMPOSITION OF PENALTIES.—In the cases 

14 described in paragraph (1)— 

15 ‘‘(A) IN GENERAL.—Subject to the suc16 ceeding provisions of this subsection, any non17 Federal governmental plan that is a group 

18 health plan and any health insurance issuer 

19 that fails to meet a provision of this part appli20 cable to such plan or issuer is subject to a civil 

21 money penalty under this subsection. 

22 ‘‘(B) LIABILITY FOR PENALTY.—In the 

23 case of a failure by— 

24 ‘‘(i) a health insurance issuer, the 

25 issuer is liable for such penalty; or 


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•S 4796 IS

1 ‘‘(ii) a group health plan that is a 

2 non-Federal governmental plan which is— 

3 ‘‘(I) sponsored by 2 or more em4 ployers, the plan is liable for such 

5 penalty; or 

6 ‘‘(II) not so sponsored, the em7 ployer is liable for such penalty. 

8 ‘‘(C) AMOUNT OF PENALTY.— 

9 ‘‘(i) IN GENERAL.—The maximum 

10 amount of penalty imposed under this 

11 paragraph is $100 for each day for each 

12 individual with respect to which such a 

13 failure occurs. 

14 ‘‘(ii) CONSIDERATIONS IN IMPOSI15 TION.—In determining the amount of any 

16 penalty to be assessed under this para17 graph, the Secretary shall take into ac18 count the previous record of compliance of 

19 the entity being assessed with the applica20 ble provisions of this part and the gravity 

21 of the violation. 

22 ‘‘(iii) LIMITATIONS.— 

23 ‘‘(I) PENALTY NOT TO APPLY

24 WHERE FAILURE NOT DISCOVERED

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1 GENCE.—No civil money penalty shall 

2 be imposed under this paragraph on 

3 any failure during any period for 

4 which it is established to the satisfac5 tion of the Secretary that none of the 

6 entities against whom the penalty 

7 would be imposed knew, or exercising 

8 reasonable diligence would have 

9 known, that such failure existed. 

10 ‘‘(II) PENALTY NOT TO APPLY

11 TO FAILURES CORRECTED WITHIN 30

12 DAYS.—No civil money penalty shall 

13 be imposed under this paragraph on 

14 any failure if such failure was due to 

15 reasonable cause and not to willful ne16 glect, and such failure is corrected 

17 during the 30-day period beginning on 

18 the first day any of the entities 

19 against whom the penalty would be 

20 imposed knew, or exercising reason21 able diligence would have known, that 

22 such failure existed. 

23 ‘‘(D) ADMINISTRATIVE REVIEW.— 

24 ‘‘(i) OPPORTUNITY FOR HEARING.— 

25 The entity assessed shall be afforded an 


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•S 4796 IS

1 opportunity for hearing by the Secretary 

2 upon request made within 30 days after 

3 the date of the issuance of a notice of as4 sessment. In such hearing the decision 

5 shall be made on the record pursuant to 

6 section 554 of title 5, United States Code. 

7 If no hearing is requested, the assessment 

8 shall constitute a final and unappealable 

9 order. 

10 ‘‘(ii) HEARING PROCEDURE.—If a 

11 hearing is requested, the initial agency de12 cision shall be made by an administrative 

13 law judge, and such decision shall become 

14 the final order unless the Secretary modi15 fies or vacates the decision. Notice of in16 tent to modify or vacate the decision of the 

17 administrative law judge shall be issued to 

18 the parties within 30 days after the date of 

19 the decision of the judge. A final order 

20 which takes effect under this paragraph 

21 shall be subject to review only as provided 

22 under subparagraph (E). 

23 ‘‘(E) JUDICIAL REVIEW.— 

24 ‘‘(i) FILING OF ACTION FOR RE25 VIEW.—Any entity against whom an order 


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•S 4796 IS

1 imposing a civil money penalty has been 

2 entered after an agency hearing under this 

3 paragraph may obtain review by the 

4 United States district court for any district 

5 in which such entity is located or the 

6 United States District Court for the Dis7 trict of Columbia by filing a notice of ap8 peal in such court within 30 days from the 

9 date of such order, and simultaneously 

10 sending a copy of such notice by registered 

11 mail to the Secretary. 

12 ‘‘(ii) CERTIFICATION OF ADMINISTRA13 TIVE RECORD.—The Secretary shall 

14 promptly certify and file in such court the 

15 record upon which the penalty was im16 posed. 

17 ‘‘(iii) STANDARD FOR REVIEW.—The 

18 findings of the Secretary shall be set aside 

19 only if found to be unsupported by sub20 stantial evidence as provided by section 

21 706(2)(E) of title 5, United States Code. 

22 ‘‘(iv) APPEAL.—Any final decision, 

23 order, or judgment of the district court 

24 concerning such review shall be subject to 


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•S 4796 IS

1 appeal as provided in chapter 83 of title 28 

2 of such Code. 

3 ‘‘(F) FAILURE TO PAY ASSESSMENT; MAIN4 TENANCE OF ACTION.— 

5 ‘‘(i) FAILURE TO PAY ASSESSMENT.— 

6 If any entity fails to pay an assessment 

7 after it has become a final and 

8 unappealable order, or after the court has 

9 entered final judgment in favor of the Sec10 retary, the Secretary shall refer the matter 

11 to the Attorney General who shall recover 

12 the amount assessed by action in the ap13 propriate United States district court. 

14 ‘‘(ii) NONREVIEWABILITY.—In such 

15 action the validity and appropriateness of 

16 the final order imposing the penalty shall 

17 not be subject to review. 

18 ‘‘(G) PAYMENT OF PENALTIES.—Except as 

19 otherwise provided, penalties collected under 

20 this paragraph shall be paid to the Secretary 

21 (or other officer) imposing the penalty and shall 

22 be available without appropriation and until ex23 pended for the purpose of enforcing the provi24 sions with respect to which the penalty was im25 posed. 


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1 ‘‘(3) ENFORCEMENT AUTHORITY RELATING TO

2 GENETIC DISCRIMINATION.— 

3 ‘‘(A) GENERAL RULE.—In the cases de4 scribed in paragraph (1), notwithstanding the 

5 provisions of paragraph (2)(C), the succeeding 

6 subparagraphs of this paragraph shall apply 

7 with respect to an action under this subsection 

8 by the Secretary with respect to any failure of 

9 a health insurance issuer in connection with a 

10 group health plan, to meet the requirements of 

11 subsection (a)(1)(F), (b)(3), (c), or (d) of sec12 tion 196 or section 197 or 196(b)(1) with re13 spect to genetic information in connection with 

14 the plan. 

15 ‘‘(B) AMOUNT.— 

16 ‘‘(i) IN GENERAL.—The amount of 

17 the penalty imposed under this paragraph 

18 shall be $100 for each day in the non19 compliance period with respect to each par20 ticipant or beneficiary to whom such fail21 ure relates. 

22 ‘‘(ii) NONCOMPLIANCE PERIOD.—For 

23 purposes of this paragraph, the term ‘non24 compliance period’ means, with respect to 

25 any failure, the period— 


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•S 4796 IS

1 ‘‘(I) beginning on the date such 

2 failure first occurs; and 

3 ‘‘(II) ending on the date the fail4 ure is corrected. 

5 ‘‘(C) MINIMUM PENALTIES WHERE FAIL6 URE DISCOVERED.—Notwithstanding clauses (i) 

7 and (ii) of subparagraph (D): 

8 ‘‘(i) IN GENERAL.—In the case of 1 or 

9 more failures with respect to an indi10 vidual— 

11 ‘‘(I) which are not corrected be12 fore the date on which the plan re13 ceives a notice from the Secretary of 

14 such violation; and 

15 ‘‘(II) which occurred or continued 

16 during the period involved; 

17 the amount of penalty imposed by subpara18 graph (A) by reason of such failures with 

19 respect to such individual shall not be less 

20 than $2,500. 

21 ‘‘(ii) HIGHER MINIMUM PENALTY

22 WHERE VIOLATIONS ARE MORE THAN DE

23 MINIMIS.—To the extent violations for 

24 which any person is liable under this para25 graph for any year are more than de miniVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 mis, clause (i) shall be applied by sub2 stituting ‘$15,000’ for ‘$2,500’ with re3 spect to such person. 

4 ‘‘(D) LIMITATIONS.— 

5 ‘‘(i) PENALTY NOT TO APPLY WHERE

6 FAILURE NOT DISCOVERED EXERCISING

7 REASONABLE DILIGENCE.—No penalty 

8 shall be imposed by subparagraph (A) on 

9 any failure during any period for which it 

10 is established to the satisfaction of the 

11 Secretary that the person otherwise liable 

12 for such penalty did not know, and exer13 cising reasonable diligence would not have 

14 known, that such failure existed. 

15 ‘‘(ii) PENALTY NOT TO APPLY TO

16 FAILURES CORRECTED WITHIN CERTAIN

17 PERIODS.—No penalty shall be imposed by 

18 subparagraph (A) on any failure if— 

19 ‘‘(I) such failure was due to rea20 sonable cause and not to willful ne21 glect; and 

22 ‘‘(II) such failure is corrected 

23 during the 30-day period beginning on 

24 the first date the person otherwise lia25 ble for such penalty knew, or exerVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00102 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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•S 4796 IS

1 cising reasonable diligence would have 

2 known, that such failure existed. 

3 ‘‘(iii) OVERALL LIMITATION FOR UN4 INTENTIONAL FAILURES.—In the case of 

5 failures which are due to reasonable cause 

6 and not to willful neglect, the penalty im7 posed by subparagraph (A) for failures 

8 shall not exceed the amount equal to the 

9 lesser of— 

10 ‘‘(I) 10 percent of the aggregate 

11 amount paid or incurred by the em12 ployer (or predecessor employer) dur13 ing the preceding taxable year for 

14 group health plans; or 

15 ‘‘(II) $500,000. 

16 ‘‘(E) WAIVER BY SECRETARY.—In the case 

17 of a failure which is due to reasonable cause 

18 and not to willful neglect, the Secretary may 

19 waive part or all of the penalty imposed by sub20 paragraph (A) to the extent that the payment 

21 of such penalty would be excessive relative to 

22 the failure involved. 

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

24 ‘‘(1) GOVERNMENTAL PLAN.—The term ‘gov25 ernmental plan’ has the meaning given such term 


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•S 4796 IS

1 under section 3(32) of the Employee Retirement In2 come Security Act of 1974 and any Federal govern3 mental plan. 

4 ‘‘(2) FEDERAL GOVERNMENTAL PLAN.—The 

5 term ‘‘Federal governmental plan’’ means a govern6 mental plan established or maintained for its em7 ployees by the Government of the United States or 

8 by any agency or instrumentality of such Govern9 ment. 

10 ‘‘(3) NON-FEDERAL GOVERNMENTAL PLAN.— 

11 The term ‘non-Federal governmental plan’ means a 

12 governmental plan that is not a Federal govern13 mental plan.’’. 

14 (b) CONFORMING AMENDMENT.—The table of con15 tents under section 1(b) of the Health Insurance Port16 ability and Accountability Act of 1996 (Public Law 104– 

17 191) is amended by inserting after the item relating to 

18 section 195 the following: 

‘‘Sec. 196. Guaranteed availability of coverage. 

‘‘Sec. 197. Fair health insurance premiums. 

‘‘Sec. 198. Prohibiting discrimination against individual participants and beneficiaries based on health status. 

‘‘Sec. 199. Prohibition of preexisting condition exclusions or other discrimination based on health status. 

‘‘Sec. 199A. Extension of dependent coverage. 

‘‘Sec. 199B. Annual limitation on cost-sharing. 

‘‘Sec. 199C. Enforcement of certain health insurance requirements.’’. 

19 (c) ERISA AND IRC ENFORCEMENT.— 

20 (1) ERISA.—Subpart B of part 7 of title I of 

21 the Employee Retirement Income Security Act of 


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•S 4796 IS

1 1974 (29 U.S.C. 1185 et seq.) is amended by adding 

2 at the end the following new section: 

3 ‘‘SEC. 716. OTHER MARKET REFORMS. 

4 ‘‘Sections 196 and 197 of the Health Insurance Port5 ability and Accountability Act of 1996 shall apply to 

6 health insurance issuers providing health insurance cov7 erage in connection with group health plans, and sections 

8 198 through 199B of such Act shall apply to group health 

9 plans and health insurance issuers providing health insur10 ance coverage in connection with group health plans, as 

11 if included in this subpart, and to the extent that any pro12 vision of this part conflicts with a provision of such section 

13 196 or 197 with respect to health insurance issuers pro14 viding health insurance coverage in connection with group 

15 health plans or of such section 198, 199, 199A, or 199B 

16 with respect to group health plans or health insurance 

17 issuers providing health insurance coverage in connection 

18 with group health plans, the provisions of such sections 

19 196 through 199B shall apply.’’. 

20 (2) IRC.—Subchapter B of chapter 100 of sub21 title K of title 26 of the Internal Revenue Code of 

22 1986 is amended by adding at the end the following 

23 new section: 


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•S 4796 IS

1 ‘‘SEC. 9816. OTHER MARKET REFORMS. 

2 ‘‘Sections 196 and 197 of the Health Insurance Port3 ability and Accountability Act of 1996 shall apply to 

4 health insurance issuers providing health insurance cov5 erage in connection with group health plans, and sections 

6 198 through 199B of such Act shall apply to group health 

7 plans and health insurance issuers providing health insur8 ance coverage in connection with group health plans, as 

9 if included in this subchapter, and to the extent that any 

10 provision of this chapter conflicts with a provision of such 

11 section 196 or 197 with respect to health insurance issuers 

12 providing health insurance coverage in connection with 

13 group health plans or of such section 198, 199, 199A, or 

14 199B with respect to group health plans or health insur15 ance issuers providing health insurance coverage in con16 nection with group health plans, the provisions of such 

17 sections 196 through 199B shall apply.’’. 

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

19 this section shall take effect on the date on which the Su20 preme Court of the United States issues a decision strik21 ing down the Patient Protection and Affordable Care Act 

22 (Public Law 111–148) in its entirety. 


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•S 4796 IS

1 Subtitle B—Expanding Coverage 

2 Options 

3 SEC. 211. RULES GOVERNING ASSOCIATION HEALTH 

4 PLANS. 

5 (a) IN GENERAL.—Subtitle B of title I of the Em6 ployee Retirement Income Security Act of 1974 is amend7 ed by adding after part 7 the following new part: 

8 ‘‘PART 8—RULES GOVERNING ASSOCIATION 

9 HEALTH PLANS 

10 ‘‘SEC. 801. ASSOCIATION HEALTH PLANS. 

11 ‘‘(a) IN GENERAL.—For purposes of this part, the 

12 term ‘association health plan’ means a group health plan 

13 whose sponsor is (or is deemed under this part to be) de14 scribed in subsection (b). 

15 ‘‘(b) SPONSORSHIP.—The sponsor of a group health 

16 plan is described in this subsection if such sponsor— 

17 ‘‘(1) is organized and maintained in good faith, 

18 with a constitution and bylaws specifically stating its 

19 purpose and providing for periodic meetings on at 

20 least an annual basis, as a bona fide trade associa21 tion, a bona fide industry association (including a 

22 rural electric cooperative association or a rural tele23 phone cooperative association), a bona fide profes24 sional association, or a bona fide chamber of com25 merce (or similar bona fide business association, inVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00107 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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•S 4796 IS

1 cluding a corporation or similar organization that 

2 operates on a cooperative basis (within the meaning 

3 of section 1381 of the Internal Revenue Code of 

4 1986)), for substantial purposes other than that of 

5 obtaining or providing medical care; 

6 ‘‘(2) is established as a permanent entity which 

7 receives the active support of its members and re8 quires for membership payment on a periodic basis 

9 of dues or payments necessary to maintain eligibility 

10 for membership in the sponsor; and 

11 ‘‘(3) does not condition membership, such dues 

12 or payments, or coverage under the plan on the 

13 basis of health status-related factors with respect to 

14 the employees of its members (or affiliated mem15 bers), or the dependents of such employees, and does 

16 not condition such dues or payments on the basis of 

17 group health plan participation. 

18 Any sponsor consisting of an association of entities which 

19 meet the requirements of paragraphs (1), (2), and (3) 

20 shall be deemed to be a sponsor described in this sub21 section. 

22 ‘‘SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH 

23 PLANS. 

24 ‘‘(a) IN GENERAL.—The applicable authority shall 

25 prescribe by regulation a procedure under which, subject 


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•S 4796 IS

1 to subsection (b), the applicable authority shall certify as2 sociation health plans which apply for certification as 

3 meeting the requirements of this part. 

4 ‘‘(b) STANDARDS.—Under the procedure prescribed 

5 pursuant to subsection (a), in the case of an association 

6 health plan that provides at least one benefit option which 

7 does not consist of health insurance coverage, the applica8 ble authority shall certify such plan as meeting the re9 quirements of this part only if the applicable authority is 

10 satisfied that the applicable requirements of this part are 

11 met (or, upon the date on which the plan is to commence 

12 operations, will be met) with respect to the plan. 

13 ‘‘(c) REQUIREMENTS APPLICABLE TO CERTIFIED

14 PLANS.—An association health plan with respect to which 

15 certification under this part is in effect shall meet the ap16 plicable requirements of this part, effective on the date 

17 of certification (or, if later, on the date on which the plan 

18 is to commence operations). 

19 ‘‘(d) REQUIREMENTS FOR CONTINUED CERTIFI20 CATION.—The applicable authority may provide by regula21 tion for continued certification of association health plans 

22 under this part. 

23 ‘‘(e) CLASS CERTIFICATION FOR FULLY INSURED

24 PLANS.—The applicable authority shall establish a class 

25 certification procedure for association health plans under 


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•S 4796 IS

1 which all benefits consist of health insurance coverage. 

2 Under such procedure, the applicable authority shall pro3 vide for the granting of certification under this part to 

4 the plans in each class of such association health plans 

5 upon appropriate filing under such procedure in connec6 tion with plans in such class and payment of the pre7 scribed fee under section 807(a). 

8 ‘‘(f) CERTIFICATION OF SELF-INSURED ASSOCIATION

9 HEALTH PLANS.—An association health plan which offers 

10 one or more benefit options which do not consist of health 

11 insurance coverage may be certified under this part only 

12 if such plan consists of any of the following: 

13 ‘‘(1) A plan which offered such coverage on the 

14 date of the enactment of this section. 

15 ‘‘(2) A plan under which the sponsor does not 

16 restrict membership to one or more trades and busi17 nesses or industries and whose eligible participating 

18 employers represent a broad cross-section of trades 

19 and businesses or industries. 

20 ‘‘(3) A plan whose eligible participating employ21 ers represent one or more trades or businesses, or 

22 one or more industries, consisting of any of the fol23 lowing: agriculture; equipment and automobile deal24 erships; barbering and cosmetology; certified public 

25 accounting practices; child care; construction; dance, 


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•S 4796 IS

1 theatrical and orchestra productions; disinfecting 

2 and pest control; financial services; fishing; food 

3 service establishments; hospitals; labor organiza4 tions; logging; manufacturing (metals); mining; med5 ical and dental practices; medical laboratories; pro6 fessional consulting services; sanitary services; trans7 portation (local and freight); warehousing; whole8 saling/distributing; or any other trade or business or 

9 industry which has been indicated as having average 

10 or above-average risk or health claims experience by 

11 reason of State rate filings, denials of coverage, pro12 posed premium rate levels, or other means dem13 onstrated by such plan in accordance with regula14 tions. 

15 ‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 

16 BOARDS OF TRUSTEES. 

17 ‘‘(a) SPONSOR.—The requirements of this subsection 

18 are met with respect to an association health plan if the 

19 sponsor has met (or is deemed under this part to have 

20 met) the requirements of section 801(b) for a continuous 

21 period of not less than 3 years ending with the date of 

22 the application for certification under this part. 

23 ‘‘(b) BOARD OF TRUSTEES.—The requirements of 

24 this subsection are met with respect to an association 

25 health plan if the following requirements are met: 


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1 ‘‘(1) FISCAL CONTROL.—The plan is operated, 

2 pursuant to a trust agreement, by a board of trust3 ees which has complete fiscal control over the plan 

4 and which is responsible for all operations of the 

5 plan. 

6 ‘‘(2) RULES OF OPERATION AND FINANCIAL

7 CONTROLS.—The board of trustees has in effect 

8 rules of operation and financial controls, based on a 

9 3-year plan of operation, adequate to carry out the 

10 terms of the plan and to meet all requirements of 

11 this title applicable to the plan. 

12 ‘‘(3) RULES GOVERNING RELATIONSHIP TO

13 PARTICIPATING EMPLOYERS AND TO CONTRAC14 TORS.— 

15 ‘‘(A) BOARD MEMBERSHIP.— 

16 ‘‘(i) IN GENERAL.—Except as pro17 vided in clauses (ii) and (iii), the members 

18 of the board of trustees are individuals se19 lected from individuals who are the owners, 

20 officers, directors, or employees of the par21 ticipating employers or who are partners in 

22 the participating employers and actively 

23 participate in the business. 

24 ‘‘(ii) LIMITATION.— 


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•S 4796 IS

1 ‘‘(I) GENERAL RULE.—Except as 

2 provided in subclauses (II) and (III), 

3 no such member is an owner, officer, 

4 director, or employee of, or partner in, 

5 a contract administrator or other 

6 service provider to the plan. 

7 ‘‘(II) LIMITED EXCEPTION FOR

8 PROVIDERS OF SERVICES SOLELY ON

9 BEHALF OF THE SPONSOR.—Officers 

10 or employees of a sponsor which is a 

11 service provider (other than a contract 

12 administrator) to the plan may be 

13 members of the board if they con14 stitute not more than 25 percent of 

15 the membership of the board and they 

16 do not provide services to the plan 

17 other than on behalf of the sponsor. 

18 ‘‘(III) TREATMENT OF PRO19 VIDERS OF MEDICAL CARE.—In the 

20 case of a sponsor which is an associa21 tion whose membership consists pri22 marily of providers of medical care, 

23 subclause (I) shall not apply in the 

24 case of any service provider described 


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•S 4796 IS

1 in subclause (I) who is a provider of 

2 medical care under the plan. 

3 ‘‘(iii) CERTAIN PLANS EXCLUDED.— 

4 Clause (i) shall not apply to an association 

5 health plan which is in existence on the 

6 date of the enactment of this section. 

7 ‘‘(B) SOLE AUTHORITY.—The board has 

8 sole authority under the plan to approve appli9 cations for participation in the plan and to con10 tract with a service provider to administer the 

11 day-to-day affairs of the plan. 

12 ‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In 

13 the case of a group health plan which is established and 

14 maintained by a franchiser for a franchise network con15 sisting of its franchisees— 

16 ‘‘(1) the requirements of subsection (a) and sec17 tion 801(a) shall be deemed met if such require18 ments would otherwise be met if the franchiser were 

19 deemed to be the sponsor referred to in section 

20 801(b), such network were deemed to be an associa21 tion described in section 801(b), and each franchisee 

22 were deemed to be a member (of the association and 

23 the sponsor) referred to in section 801(b); and 

24 ‘‘(2) the requirements of section 804(a)(1) shall 

25 be deemed met. 


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•S 4796 IS

1 The Secretary may by regulation define for purposes of 

2 this subsection the terms ‘franchiser’, ‘franchise network’, 

3 and ‘franchisee’. 

4 ‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE5 MENTS. 

6 ‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 

7 requirements of this subsection are met with respect to 

8 an association health plan if, under the terms of the 

9 plan— 

10 ‘‘(1) each participating employer must be— 

11 ‘‘(A) a member of the sponsor; 

12 ‘‘(B) the sponsor; or 

13 ‘‘(C) an affiliated member of the sponsor 

14 with respect to which the requirements of sub15 section (b) are met, 

16 except that, in the case of a sponsor which is a pro17 fessional association or other individual-based asso18 ciation, if at least one of the officers, directors, or 

19 employees of an employer, or at least one of the in20 dividuals who are partners in an employer and who 

21 actively participates in the business, is a member or 

22 such an affiliated member of the sponsor, partici23 pating employers may also include such employer; 

24 and 


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•S 4796 IS

1 ‘‘(2) all individuals commencing coverage under 

2 the plan after certification under this part must 

3 be— 

4 ‘‘(A) active or retired owners (including 

5 self-employed individuals), officers, directors, or 

6 employees of, or partners in, participating em7 ployers; or 

8 ‘‘(B) the beneficiaries of individuals de9 scribed in subparagraph (A). 

10 ‘‘(b) COVERAGE OF PREVIOUSLY UNINSURED EM11 PLOYEES.—In the case of an association health plan in 

12 existence on the date of the enactment of this section, an 

13 affiliated member of the sponsor of the plan may be of14 fered coverage under the plan as a participating employer 

15 only if— 

16 ‘‘(1) the affiliated member was an affiliated 

17 member on the date of certification under this part; 

18 or 

19 ‘‘(2) during the 12-month period preceding the 

20 date of the offering of such coverage, the affiliated 

21 member has not maintained or contributed to a 

22 group health plan with respect to any of its employ23 ees who would otherwise be eligible to participate in 

24 such association health plan. 


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•S 4796 IS

1 ‘‘(c) INDIVIDUAL MARKET UNAFFECTED.—The re2 quirements of this subsection are met with respect to an 

3 association health plan if, under the terms of the plan, 

4 no participating employer may provide health insurance 

5 coverage in the individual market for any employee not 

6 covered under the plan which is similar to the coverage 

7 contemporaneously provided to employees of the employer 

8 under the plan, if such exclusion of the employee from cov9 erage under the plan is based on a health status-related 

10 factor with respect to the employee and such employee 

11 would, but for such exclusion on such basis, be eligible 

12 for coverage under the plan. 

13 ‘‘(d) PROHIBITION OF DISCRIMINATION AGAINST

14 EMPLOYERS AND EMPLOYEES ELIGIBLE TO PARTICI15 PATE.—The requirements of this subsection are met with 

16 respect to an association health plan if— 

17 ‘‘(1) under the terms of the plan, all employers 

18 meeting the preceding requirements of this section 

19 are eligible to qualify as participating employers for 

20 all geographically available coverage options, unless, 

21 in the case of any such employer, participation or 

22 contribution requirements of the type referred to in 

23 section 2711 of the Public Health Service Act are 

24 not met; 


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1 ‘‘(2) upon request, any employer eligible to par2 ticipate is furnished information regarding all cov3 erage options available under the plan; and 

4 ‘‘(3) the applicable requirements of sections 

5 701, 702, and 703 are met with respect to the plan. 

6 ‘‘SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN 

7 DOCUMENTS, CONTRIBUTION RATES, AND 

8 BENEFIT OPTIONS. 

9 ‘‘(a) IN GENERAL.—The requirements of this section 

10 are met with respect to an association health plan if the 

11 following requirements are met: 

12 ‘‘(1) CONTENTS OF GOVERNING INSTRU13 MENTS.—The instruments governing the plan in14 clude a written instrument, meeting the require15 ments of an instrument required under section 

16 402(a)(1), which— 

17 ‘‘(A) provides that the board of trustees 

18 serves as the named fiduciary required for plans 

19 under section 402(a)(1) and serves in the ca20 pacity of a plan administrator (referred to in 

21 section 3(16)(A)); 

22 ‘‘(B) provides that the sponsor of the plan 

23 is to serve as plan sponsor (referred to in sec24 tion 3(16)(B)); and 


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•S 4796 IS

1 ‘‘(C) incorporates the requirements of sec2 tion 806. 

3 ‘‘(2) CONTRIBUTION RATES MUST BE NON4 DISCRIMINATORY.— 

5 ‘‘(A) The contribution rates for any par6 ticipating small employer do not vary on the 

7 basis of any health status-related factor in rela8 tion to employees of such employer or their 

9 beneficiaries and do not vary on the basis of the 

10 type of business or industry in which such em11 ployer is engaged. 

12 ‘‘(B) Nothing in this title or any other pro13 vision of law shall be construed to preclude an 

14 association health plan, or a health insurance 

15 issuer offering health insurance coverage in 

16 connection with an association health plan, 

17 from— 

18 ‘‘(i) setting contribution rates based 

19 on the claims experience of the plan; or 

20 ‘‘(ii) varying contribution rates for 

21 small employers in a State to the extent 

22 that such rates could vary using the same 

23 methodology employed in such State for 

24 regulating premium rates in the small 

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1 ance coverage offered in connection with 

2 bona fide associations (within the meaning 

3 of section 2791(d)(3) of the Public Health 

4 Service Act), 

5 subject to the requirements of section 702(b) 

6 relating to contribution rates. 

7 ‘‘(3) FLOOR FOR NUMBER OF COVERED INDI8 VIDUALS WITH RESPECT TO CERTAIN PLANS.—If 

9 any benefit option under the plan does not consist 

10 of health insurance coverage, the plan has as of the 

11 beginning of the plan year not fewer than 1,000 par12 ticipants and beneficiaries. 

13 ‘‘(4) MARKETING REQUIREMENTS.— 

14 ‘‘(A) IN GENERAL.—If a benefit option 

15 which consists of health insurance coverage is 

16 offered under the plan, State-licensed insurance 

17 agents shall be used to distribute to small em18 ployers coverage which does not consist of 

19 health insurance coverage in a manner com20 parable to the manner in which such agents are 

21 used to distribute health insurance coverage. 

22 ‘‘(B) STATE-LICENSED INSURANCE

23 AGENTS.—For purposes of subparagraph (A), 

24 the term ‘State-licensed insurance agents’ 

25 means one or more agents who are licensed in 


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•S 4796 IS

1 a State and are subject to the laws of such 

2 State relating to licensure, qualification, test3 ing, examination, and continuing education of 

4 persons authorized to offer, sell, or solicit 

5 health insurance coverage in such State. 

6 ‘‘(5) REGULATORY REQUIREMENTS.—Such 

7 other requirements as the applicable authority deter8 mines are necessary to carry out the purposes of this 

9 part, which shall be prescribed by the applicable au10 thority by regulation. 

11 ‘‘(b) ABILITY OF ASSOCIATION HEALTH PLANS TO

12 DESIGN BENEFIT OPTIONS.—Subject to section 514(d), 

13 nothing in this part or any provision of State law (as de14 fined in section 514(c)(1)) shall be construed to preclude 

15 an association health plan, or a health insurance issuer 

16 offering health insurance coverage in connection with an 

17 association health plan, from exercising its sole discretion 

18 in selecting the specific items and services consisting of 

19 medical care to be included as benefits under such plan 

20 or coverage, except (subject to section 514) in the case 

21 of (1) any law to the extent that it is not preempted under 

22 section 731(a)(1) with respect to matters governed by sec23 tion 711, 712, or 713, or (2) any law of the State with 

24 which filing and approval of a policy type offered by the 

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1 hibits an exclusion of a specific disease from such cov2 erage. 

3 ‘‘SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS 

4 FOR SOLVENCY FOR PLANS PROVIDING 

5 HEALTH BENEFITS IN ADDITION TO HEALTH 

6 INSURANCE COVERAGE. 

7 ‘‘(a) IN GENERAL.—The requirements of this section 

8 are met with respect to an association health plan if— 

9 ‘‘(1) the benefits under the plan consist solely 

10 of health insurance coverage; or 

11 ‘‘(2) if the plan provides any additional benefit 

12 options which do not consist of health insurance cov13 erage, the plan— 

14 ‘‘(A) establishes and maintains reserves 

15 with respect to such additional benefit options, 

16 in amounts recommended by the qualified actu17 ary, consisting of— 

18 ‘‘(i) a reserve sufficient for unearned 

19 contributions; 

20 ‘‘(ii) a reserve sufficient for benefit li21 abilities which have been incurred, which 

22 have not been satisfied, and for which risk 

23 of loss has not yet been transferred, and 

24 for expected administrative costs with re25 spect to such benefit liabilities; 


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•S 4796 IS

1 ‘‘(iii) a reserve sufficient for any other 

2 obligations of the plan; and 

3 ‘‘(iv) a reserve sufficient for a margin 

4 of error and other fluctuations, taking into 

5 account the specific circumstances of the 

6 plan; and 

7 ‘‘(B) establishes and maintains aggregate 

8 and specific excess/stop loss insurance and sol9 vency indemnification, with respect to such ad10 ditional benefit options for which risk of loss 

11 has not yet been transferred, as follows: 

12 ‘‘(i) The plan shall secure aggregate 

13 excess/stop loss insurance for the plan with 

14 an attachment point which is not greater 

15 than 125 percent of expected gross annual 

16 claims. The applicable authority may by 

17 regulation provide for upward adjustments 

18 in the amount of such percentage in speci19 fied circumstances in which the plan spe20 cifically provides for and maintains re21 serves in excess of the amounts required 

22 under subparagraph (A). 

23 ‘‘(ii) The plan shall secure specific ex24 cess/stop loss insurance for the plan with 

25 an attachment point which is at least equal 


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•S 4796 IS

1 to an amount recommended by the plan’s 

2 qualified actuary. The applicable authority 

3 may by regulation provide for adjustments 

4 in the amount of such insurance in speci5 fied circumstances in which the plan spe6 cifically provides for and maintains re7 serves in excess of the amounts required 

8 under subparagraph (A). 

9 ‘‘(iii) The plan shall secure indem10 nification insurance for any claims which 

11 the plan is unable to satisfy by reason of 

12 a plan termination. 

13 Any person issuing to a plan insurance described in clause 

14 (i), (ii), or (iii) of subparagraph (B) shall notify the Sec15 retary of any failure of premium payment meriting can16 cellation of the policy prior to undertaking such a cancella17 tion. Any regulations prescribed by the applicable author18 ity pursuant to clause (i) or (ii) of subparagraph (B) may 

19 allow for such adjustments in the required levels of excess/ 

20 stop loss insurance as the qualified actuary may rec21 ommend, taking into account the specific circumstances 

22 of the plan. 

23 ‘‘(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS

24 RESERVES.—In the case of any association health plan de25 scribed in subsection (a)(2), the requirements of this subVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 section are met if the plan establishes and maintains sur2 plus in an amount at least equal to— 

3 ‘‘(1) $500,000; or 

4 ‘‘(2) such greater amount (but not greater than 

5 $2,000,000) as may be set forth in regulations pre6 scribed by the applicable authority, considering the 

7 level of aggregate and specific excess/stop loss insur8 ance provided with respect to such plan and other 

9 factors related to solvency risk, such as the plan’s 

10 projected levels of participation or claims, the nature 

11 of the plan’s liabilities, and the types of assets avail12 able to assure that such liabilities are met. 

13 ‘‘(c) ADDITIONAL REQUIREMENTS.—In the case of 

14 any association health plan described in subsection (a)(2), 

15 the applicable authority may provide such additional re16 quirements relating to reserves, excess/stop loss insurance, 

17 and indemnification insurance as the applicable authority 

18 considers appropriate. Such requirements may be provided 

19 by regulation with respect to any such plan or any class 

20 of such plans. 

21 ‘‘(d) ADJUSTMENTS FOR EXCESS/STOP LOSS INSUR22 ANCE.—The applicable authority may provide for adjust23 ments to the levels of reserves otherwise required under 

24 subsections (a) and (b) with respect to any plan or class 


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•S 4796 IS

1 of plans to take into account excess/stop loss insurance 

2 provided with respect to such plan or plans. 

3 ‘‘(e) ALTERNATIVE MEANS OF COMPLIANCE.—The 

4 applicable authority may permit an association health plan 

5 described in subsection (a)(2) to substitute, for all or part 

6 of the requirements of this section (except subsection 

7 (a)(2)(B)(iii)), such security, guarantee, hold-harmless ar8 rangement, or other financial arrangement as the applica9 ble authority determines to be adequate to enable the plan 

10 to fully meet all its financial obligations on a timely basis 

11 and is otherwise no less protective of the interests of par12 ticipants and beneficiaries than the requirements for 

13 which it is substituted. The applicable authority may take 

14 into account, for purposes of this subsection, evidence pro15 vided by the plan or sponsor which demonstrates an as16 sumption of liability with respect to the plan. Such evi17 dence may be in the form of a contract of indemnification, 

18 lien, bonding, insurance, letter of credit, recourse under 

19 applicable terms of the plan in the form of assessments 

20 of participating employers, security, or other financial ar21 rangement. 

22 ‘‘(f) MEASURES TO ENSURE CONTINUED PAYMENT

23 OF BENEFITS BY CERTAIN PLANS IN DISTRESS.— 

24 ‘‘(1) PAYMENTS BY CERTAIN PLANS TO ASSO25 CIATION HEALTH PLAN FUND.— 


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1 ‘‘(A) IN GENERAL.—In the case of an as2 sociation health plan described in subsection 

3 (a)(2), the requirements of this subsection are 

4 met if the plan makes payments into the Asso5 ciation Health Plan Fund under this subpara6 graph when they are due. Such payments shall 

7 consist of annual payments in the amount of 

8 $5,000, and, in addition to such annual pay9 ments, such supplemental payments as the Sec10 retary may determine to be necessary under 

11 paragraph (2). Payments under this paragraph 

12 are payable to the Fund at the time determined 

13 by the Secretary. Initial payments are due in 

14 advance of certification under this part. Pay15 ments shall continue to accrue until a plan’s as16 sets are distributed pursuant to a termination 

17 procedure. 

18 ‘‘(B) PENALTIES FOR FAILURE TO MAKE

19 PAYMENTS.—If any payment is not made by a 

20 plan when it is due, a late payment charge of 

21 not more than 100 percent of the payment 

22 which was not timely paid shall be payable by 

23 the plan to the Fund. 

24 ‘‘(C) CONTINUED DUTY OF THE SEC25 RETARY.—The Secretary shall not cease to 


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•S 4796 IS

1 carry out the provisions of paragraph (2) on ac2 count of the failure of a plan to pay any pay3 ment when due. 

4 ‘‘(2) PAYMENTS BY SECRETARY TO CONTINUE

5 EXCESS/STOP LOSS INSURANCE COVERAGE AND IN6 DEMNIFICATION INSURANCE COVERAGE FOR CER7 TAIN PLANS.—In any case in which the applicable 

8 authority determines that there is, or that there is 

9 reason to believe that there will be: (A) A failure to 

10 take necessary corrective actions under section 

11 809(a) with respect to an association health plan de12 scribed in subsection (a)(2); or (B) a termination of 

13 such a plan under section 809(b) or 810(b)(8) (and, 

14 if the applicable authority is not the Secretary, cer15 tifies such determination to the Secretary), the Sec16 retary shall determine the amounts necessary to 

17 make payments to an insurer (designated by the 

18 Secretary) to maintain in force excess/stop loss in19 surance coverage or indemnification insurance cov20 erage for such plan, if the Secretary determines that 

21 there is a reasonable expectation that, without such 

22 payments, claims would not be satisfied by reason of 

23 termination of such coverage. The Secretary shall, to 

24 the extent provided in advance in appropriation 


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•S 4796 IS

1 Acts, pay such amounts so determined to the insurer 

2 designated by the Secretary. 

3 ‘‘(3) ASSOCIATION HEALTH PLAN FUND.— 

4 ‘‘(A) IN GENERAL.—There is established 

5 on the books of the Treasury a fund to be 

6 known as the ‘Association Health Plan Fund’. 

7 The Fund shall be available for making pay8 ments pursuant to paragraph (2). The Fund 

9 shall be credited with payments received pursu10 ant to paragraph (1)(A), penalties received pur11 suant to paragraph (1)(B); and earnings on in12 vestments of amounts of the Fund under sub13 paragraph (B). 

14 ‘‘(B) INVESTMENT.—Whenever the Sec15 retary determines that the moneys of the fund 

16 are in excess of current needs, the Secretary 

17 may request the investment of such amounts as 

18 the Secretary determines advisable by the Sec19 retary of the Treasury in obligations issued or 

20 guaranteed by the United States. 

21 ‘‘(g) EXCESS/STOP LOSS INSURANCE.—For purposes 

22 of this section— 

23 ‘‘(1) AGGREGATE EXCESS/STOP LOSS INSUR24 ANCE.—The term ‘aggregate excess/stop loss insurVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00129 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 ance’ means, in connection with an association 

2 health plan, a contract— 

3 ‘‘(A) under which an insurer (meeting such 

4 minimum standards as the applicable authority 

5 may prescribe by regulation) provides for pay6 ment to the plan with respect to aggregate 

7 claims under the plan in excess of an amount 

8 or amounts specified in such contract; 

9 ‘‘(B) which is guaranteed renewable; and 

10 ‘‘(C) which allows for payment of pre11 miums by any third party on behalf of the in12 sured plan. 

13 ‘‘(2) SPECIFIC EXCESS/STOP LOSS INSUR14 ANCE.—The term ‘specific excess/stop loss insur15 ance’ means, in connection with an association 

16 health plan, a contract— 

17 ‘‘(A) under which an insurer (meeting such 

18 minimum standards as the applicable authority 

19 may prescribe by regulation) provides for pay20 ment to the plan with respect to claims under 

21 the plan in connection with a covered individual 

22 in excess of an amount or amounts specified in 

23 such contract in connection with such covered 

24 individual; 

25 ‘‘(B) which is guaranteed renewable; and 


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•S 4796 IS

1 ‘‘(C) which allows for payment of pre2 miums by any third party on behalf of the in3 sured plan. 

4 ‘‘(h) INDEMNIFICATION INSURANCE.—For purposes 

5 of this section, the term ‘indemnification insurance’ 

6 means, in connection with an association health plan, a 

7 contract— 

8 ‘‘(1) under which an insurer (meeting such min9 imum standards as the applicable authority may pre10 scribe by regulation) provides for payment to the 

11 plan with respect to claims under the plan which the 

12 plan is unable to satisfy by reason of a termination 

13 pursuant to section 809(b) (relating to mandatory 

14 termination); 

15 ‘‘(2) which is guaranteed renewable and 

16 noncancellable for any reason (except as the applica17 ble authority may prescribe by regulation); and 

18 ‘‘(3) which allows for payment of premiums by 

19 any third party on behalf of the insured plan. 

20 ‘‘(i) RESERVES.—For purposes of this section, the 

21 term ‘reserves’ means, in connection with an association 

22 health plan, plan assets which meet the fiduciary stand23 ards under part 4 and such additional requirements re24 garding liquidity as the applicable authority may prescribe 

25 by regulation. 


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•S 4796 IS

1 ‘‘(j) SOLVENCY STANDARDS WORKING GROUP.— 

2 ‘‘(1) IN GENERAL.—Within 90 days after the 

3 date of the enactment of this section, the applicable 

4 authority shall establish a Solvency Standards Work5 ing Group. In prescribing the initial regulations 

6 under this section, the applicable authority shall 

7 take into account the recommendations of such 

8 Working Group. 

9 ‘‘(2) MEMBERSHIP.—The Working Group shall 

10 consist of not more than 15 members appointed by 

11 the applicable authority. The applicable authority 

12 shall include among persons invited to membership 

13 on the Working Group at least one of each of the 

14 following: 

15 ‘‘(A) A representative of the National As16 sociation of Insurance Commissioners. 

17 ‘‘(B) A representative of the American 

18 Academy of Actuaries. 

19 ‘‘(C) A representative of the State govern20 ments, or their interests. 

21 ‘‘(D) A representative of existing self-in22 sured arrangements, or their interests. 

23 ‘‘(E) A representative of associations of 

24 the type referred to in section 801(b)(1), or 

25 their interests. 


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•S 4796 IS

1 ‘‘(F) A representative of multiemployer 

2 plans that are group health plans, or their in3 terests. 

4 ‘‘SEC. 807. REQUIREMENTS FOR APPLICATION AND RE5 LATED REQUIREMENTS. 

6 ‘‘(a) FILING FEE.—Under the procedure prescribed 

7 pursuant to section 802(a), an association health plan 

8 shall pay to the applicable authority at the time of filing 

9 an application for certification under this part a filing fee 

10 in the amount of $5,000, which shall be available in the 

11 case of the Secretary, to the extent provided in appropria12 tion Acts, for the sole purpose of administering the certifi13 cation procedures applicable with respect to association 

14 health plans. 

15 ‘‘(b) INFORMATION TO BE INCLUDED IN APPLICA16 TION FOR CERTIFICATION.—An application for certifi17 cation under this part meets the requirements of this sec18 tion only if it includes, in a manner and form which shall 

19 be prescribed by the applicable authority by regulation, at 

20 least the following information: 

21 ‘‘(1) IDENTIFYING INFORMATION.—The names 

22 and addresses of— 

23 ‘‘(A) the sponsor; and 

24 ‘‘(B) the members of the board of trustees 

25 of the plan. 


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•S 4796 IS

1 ‘‘(2) STATES IN WHICH PLAN INTENDS TO DO

2 BUSINESS.—The States in which participants and 

3 beneficiaries under the plan are to be located and 

4 the number of them expected to be located in each 

5 such State. 

6 ‘‘(3) BONDING REQUIREMENTS.—Evidence pro7 vided by the board of trustees that the bonding re8 quirements of section 412 will be met as of the date 

9 of the application or (if later) commencement of op10 erations. 

11 ‘‘(4) PLAN DOCUMENTS.—A copy of the docu12 ments governing the plan (including any bylaws and 

13 trust agreements), the summary plan description, 

14 and other material describing the benefits that will 

15 be provided to participants and beneficiaries under 

16 the plan. 

17 ‘‘(5) AGREEMENTS WITH SERVICE PRO18 VIDERS.—A copy of any agreements between the 

19 plan and contract administrators and other service 

20 providers. 

21 ‘‘(6) FUNDING REPORT.—In the case of asso22 ciation health plans providing benefits options in ad23 dition to health insurance coverage, a report setting 

24 forth information with respect to such additional 

25 benefit options determined as of a date within the 


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•S 4796 IS

1 120-day period ending with the date of the applica2 tion, including the following: 

3 ‘‘(A) RESERVES.—A statement, certified 

4 by the board of trustees of the plan, and a 

5 statement of actuarial opinion, signed by a 

6 qualified actuary, that all applicable require7 ments of section 806 are or will be met in ac8 cordance with regulations which the applicable 

9 authority shall prescribe. 

10 ‘‘(B) ADEQUACY OF CONTRIBUTION

11 RATES.—A statement of actuarial opinion, 

12 signed by a qualified actuary, which sets forth 

13 a description of the extent to which contribution 

14 rates are adequate to provide for the payment 

15 of all obligations and the maintenance of re16 quired reserves under the plan for the 12- 

17 month period beginning with such date within 

18 such 120-day period, taking into account the 

19 expected coverage and experience of the plan. If 

20 the contribution rates are not fully adequate, 

21 the statement of actuarial opinion shall indicate 

22 the extent to which the rates are inadequate 

23 and the changes needed to ensure adequacy. 

24 ‘‘(C) CURRENT AND PROJECTED VALUE OF

25 ASSETS AND LIABILITIES.—A statement of acVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00135 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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•S 4796 IS

1 tuarial opinion signed by a qualified actuary, 

2 which sets forth the current value of the assets 

3 and liabilities accumulated under the plan and 

4 a projection of the assets, liabilities, income, 

5 and expenses of the plan for the 12-month pe6 riod referred to in subparagraph (B). The in7 come statement shall identify separately the 

8 plan’s administrative expenses and claims. 

9 ‘‘(D) COSTS OF COVERAGE TO BE

10 CHARGED AND OTHER EXPENSES.—A state11 ment of the costs of coverage to be charged, in12 cluding an itemization of amounts for adminis13 tration, reserves, and other expenses associated 

14 with the operation of the plan. 

15 ‘‘(E) OTHER INFORMATION.—Any other 

16 information as may be determined by the appli17 cable authority, by regulation, as necessary to 

18 carry out the purposes of this part. 

19 ‘‘(c) FILING NOTICE OF CERTIFICATION WITH

20 STATES.—A certification granted under this part to an 

21 association health plan shall not be effective unless written 

22 notice of such certification is filed with the applicable 

23 State authority of each State in which at least 25 percent 

24 of the participants and beneficiaries under the plan are 

25 located. For purposes of this subsection, an individual 


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•S 4796 IS

1 shall be considered to be located in the State in which a 

2 known address of such individual is located or in which 

3 such individual is employed. 

4 ‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case 

5 of any association health plan certified under this part, 

6 descriptions of material changes in any information which 

7 was required to be submitted with the application for the 

8 certification under this part shall be filed in such form 

9 and manner as shall be prescribed by the applicable au10 thority by regulation. The applicable authority may re11 quire by regulation prior notice of material changes with 

12 respect to specified matters which might serve as the basis 

13 for suspension or revocation of the certification. 

14 ‘‘(e) REPORTING REQUIREMENTS FOR CERTAIN AS15 SOCIATION HEALTH PLANS.—An association health plan 

16 certified under this part which provides benefit options in 

17 addition to health insurance coverage for such plan year 

18 shall meet the requirements of section 103 by filing an 

19 annual report under such section which shall include infor20 mation described in subsection (b)(6) with respect to the 

21 plan year and, notwithstanding section 104(a)(1)(A), shall 

22 be filed with the applicable authority not later than 90 

23 days after the close of the plan year (or on such later date 

24 as may be prescribed by the applicable authority). The apVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00137 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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•S 4796 IS

1 plicable authority may require by regulation such interim 

2 reports as it considers appropriate. 

3 ‘‘(f) ENGAGEMENT OF QUALIFIED ACTUARY.—The 

4 board of trustees of each association health plan which 

5 provides benefits options in addition to health insurance 

6 coverage and which is applying for certification under this 

7 part or is certified under this part shall engage, on behalf 

8 of all participants and beneficiaries, a qualified actuary 

9 who shall be responsible for the preparation of the mate10 rials comprising information necessary to be submitted by 

11 a qualified actuary under this part. The qualified actuary 

12 shall utilize such assumptions and techniques as are nec13 essary to enable such actuary to form an opinion as to 

14 whether the contents of the matters reported under this 

15 part— 

16 ‘‘(1) are in the aggregate reasonably related to 

17 the experience of the plan and to reasonable expecta18 tions; and 

19 ‘‘(2) represent such actuary’s best estimate of 

20 anticipated experience under the plan. 

21 The opinion by the qualified actuary shall be made with 

22 respect to, and shall be made a part of, the annual report. 


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•S 4796 IS

1 ‘‘SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TER2 MINATION. 

3 ‘‘Except as provided in section 809(b), an association 

4 health plan which is or has been certified under this part 

5 may terminate (upon or at any time after cessation of ac6 cruals in benefit liabilities) only if the board of trustees, 

7 not less than 60 days before the proposed termination 

8 date— 

9 ‘‘(1) provides to the participants and bene10 ficiaries a written notice of intent to terminate stat11 ing that such termination is intended and the pro12 posed termination date; 

13 ‘‘(2) develops a plan for winding up the affairs 

14 of the plan in connection with such termination in 

15 a manner which will result in timely payment of all 

16 benefits for which the plan is obligated; and 

17 ‘‘(3) submits such plan in writing to the appli18 cable authority. 

19 Actions required under this section shall be taken in such 

20 form and manner as may be prescribed by the applicable 

21 authority by regulation. 

22 ‘‘SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMI23 NATION. 

24 ‘‘(a) ACTIONS TO AVOID DEPLETION OF RE25 SERVES.—An association health plan which is certified 

26 under this part and which provides benefits other than 


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•S 4796 IS

1 health insurance coverage shall continue to meet the re2 quirements of section 806, irrespective of whether such 

3 certification continues in effect. The board of trustees of 

4 such plan shall determine quarterly whether the require5 ments of section 806 are met. In any case in which the 

6 board determines that there is reason to believe that there 

7 is or will be a failure to meet such requirements, or the 

8 applicable authority makes such a determination and so 

9 notifies the board, the board shall immediately notify the 

10 qualified actuary engaged by the plan, and such actuary 

11 shall, not later than the end of the next following month, 

12 make such recommendations to the board for corrective 

13 action as the actuary determines necessary to ensure com14 pliance with section 806. Not later than 30 days after re15 ceiving from the actuary recommendations for corrective 

16 actions, the board shall notify the applicable authority (in 

17 such form and manner as the applicable authority may 

18 prescribe by regulation) of such recommendations of the 

19 actuary for corrective action, together with a description 

20 of the actions (if any) that the board has taken or plans 

21 to take in response to such recommendations. The board 

22 shall thereafter report to the applicable authority, in such 

23 form and frequency as the applicable authority may speci24 fy to the board, regarding corrective action taken by the 

25 board until the requirements of section 806 are met. 


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•S 4796 IS

1 ‘‘(b) MANDATORY TERMINATION.—In any case in 

2 which— 

3 ‘‘(1) the applicable authority has been notified 

4 under subsection (a) (or by an issuer of excess/stop 

5 loss insurance or indemnity insurance pursuant to 

6 section 806(a)) of a failure of an association health 

7 plan which is or has been certified under this part 

8 and is described in section 806(a)(2) to meet the re9 quirements of section 806 and has not been notified 

10 by the board of trustees of the plan that corrective 

11 action has restored compliance with such require12 ments; and 

13 ‘‘(2) the applicable authority determines that 

14 there is a reasonable expectation that the plan will 

15 continue to fail to meet the requirements of section 

16 806, 

17 the board of trustees of the plan shall, at the direction 

18 of the applicable authority, terminate the plan and, in the 

19 course of the termination, take such actions as the appli20 cable authority may require, including satisfying any 

21 claims referred to in section 806(a)(2)(B)(iii) and recov22 ering for the plan any liability under subsection 

23 (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure 

24 that the affairs of the plan will be, to the maximum extent 


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1 possible, wound up in a manner which will result in timely 

2 provision of all benefits for which the plan is obligated. 

3 ‘‘SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOL4 VENT ASSOCIATION HEALTH PLANS PRO5 VIDING HEALTH BENEFITS IN ADDITION TO 

6 HEALTH INSURANCE COVERAGE. 

7 ‘‘(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR

8 INSOLVENT PLANS.—Whenever the Secretary determines 

9 that an association health plan which is or has been cer10 tified under this part and which is described in section 

11 806(a)(2) will be unable to provide benefits when due or 

12 is otherwise in a financially hazardous condition, as shall 

13 be defined by the Secretary by regulation, the Secretary 

14 shall, upon notice to the plan, apply to the appropriate 

15 United States district court for appointment of the Sec16 retary as trustee to administer the plan for the duration 

17 of the insolvency. The plan may appear as a party and 

18 other interested persons may intervene in the proceedings 

19 at the discretion of the court. The court shall appoint such 

20 Secretary trustee if the court determines that the trustee21 ship is necessary to protect the interests of the partici22 pants and beneficiaries or providers of medical care or to 

23 avoid any unreasonable deterioration of the financial con24 dition of the plan. The trusteeship of such Secretary shall 

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1 tence of this subsection are remedied or the plan is termi2 nated. 

3 ‘‘(b) POWERS AS TRUSTEE.—The Secretary, upon 

4 appointment as trustee under subsection (a), shall have 

5 the power— 

6 ‘‘(1) to do any act authorized by the plan, this 

7 title, or other applicable provisions of law to be done 

8 by the plan administrator or any trustee of the plan; 

9 ‘‘(2) to require the transfer of all (or any part) 

10 of the assets and records of the plan to the Sec11 retary as trustee; 

12 ‘‘(3) to invest any assets of the plan which the 

13 Secretary holds in accordance with the provisions of 

14 the plan, regulations prescribed by the Secretary, 

15 and applicable provisions of law; 

16 ‘‘(4) to require the sponsor, the plan adminis17 trator, any participating employer, and any employee 

18 organization representing plan participants to fur19 nish any information with respect to the plan which 

20 the Secretary as trustee may reasonably need in 

21 order to administer the plan; 

22 ‘‘(5) to collect for the plan any amounts due the 

23 plan and to recover reasonable expenses of the trust24 eeship; 


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1 ‘‘(6) to commence, prosecute, or defend on be2 half of the plan any suit or proceeding involving the 

3 plan; 

4 ‘‘(7) to issue, publish, or file such notices, state5 ments, and reports as may be required by the Sec6 retary by regulation or required by any order of the 

7 court; 

8 ‘‘(8) to terminate the plan (or provide for its 

9 termination in accordance with section 809(b)) and 

10 liquidate the plan assets, to restore the plan to the 

11 responsibility of the sponsor, or to continue the 

12 trusteeship; 

13 ‘‘(9) to provide for the enrollment of plan par14 ticipants and beneficiaries under appropriate cov15 erage options; and 

16 ‘‘(10) to do such other acts as may be nec17 essary to comply with this title or any order of the 

18 court and to protect the interests of plan partici19 pants and beneficiaries and providers of medical 

20 care. 

21 ‘‘(c) NOTICE OF APPOINTMENT.—As soon as prac22 ticable after the Secretary’s appointment as trustee, the 

23 Secretary shall give notice of such appointment to— 

24 ‘‘(1) the sponsor and plan administrator; 

25 ‘‘(2) each participant; 


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•S 4796 IS

1 ‘‘(3) each participating employer; and 

2 ‘‘(4) if applicable, each employee organization 

3 which, for purposes of collective bargaining, rep4 resents plan participants. 

5 ‘‘(d) ADDITIONAL DUTIES.—Except to the extent in6 consistent with the provisions of this title, or as may be 

7 otherwise ordered by the court, the Secretary, upon ap8 pointment as trustee under this section, shall be subject 

9 to the same duties as those of a trustee under section 704 

10 of title 11, United States Code, and shall have the duties 

11 of a fiduciary for purposes of this title. 

12 ‘‘(e) OTHER PROCEEDINGS.—An application by the 

13 Secretary under this subsection may be filed notwith14 standing the pendency in the same or any other court of 

15 any bankruptcy, mortgage foreclosure, or equity receiver16 ship proceeding, or any proceeding to reorganize, conserve, 

17 or liquidate such plan or its property, or any proceeding 

18 to enforce a lien against property of the plan. 

19 ‘‘(f) JURISDICTION OF COURT.— 

20 ‘‘(1) IN GENERAL.—Upon the filing of an appli21 cation for the appointment as trustee or the issuance 

22 of a decree under this section, the court to which the 

23 application is made shall have exclusive jurisdiction 

24 of the plan involved and its property wherever lo25 cated with the powers, to the extent consistent with 


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•S 4796 IS

1 the purposes of this section, of a court of the United 

2 States having jurisdiction over cases under chapter 

3 11 of title 11, United States Code. Pending an adju4 dication under this section such court shall stay, and 

5 upon appointment by it of the Secretary as trustee, 

6 such court shall continue the stay of, any pending 

7 mortgage foreclosure, equity receivership, or other 

8 proceeding to reorganize, conserve, or liquidate the 

9 plan, the sponsor, or property of such plan or spon10 sor, and any other suit against any receiver, conser11 vator, or trustee of the plan, the sponsor, or prop12 erty of the plan or sponsor. Pending such adjudica13 tion and upon the appointment by it of the Sec14 retary as trustee, the court may stay any proceeding 

15 to enforce a lien against property of the plan or the 

16 sponsor or any other suit against the plan or the 

17 sponsor. 

18 ‘‘(2) VENUE.—An action under this section 

19 may be brought in the judicial district where the 

20 sponsor or the plan administrator resides or does 

21 business or where any asset of the plan is situated. 

22 A district court in which such action is brought may 

23 issue process with respect to such action in any 

24 other judicial district. 


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1 ‘‘(g) PERSONNEL.—In accordance with regulations 

2 which shall be prescribed by the Secretary, the Secretary 

3 shall appoint, retain, and compensate accountants, actu4 aries, and other professional service personnel as may be 

5 necessary in connection with the Secretary’s service as 

6 trustee under this section. 

7 ‘‘SEC. 811. STATE ASSESSMENT AUTHORITY. 

8 ‘‘(a) IN GENERAL.—Notwithstanding section 514, a 

9 State may impose by law a contribution tax on an associa10 tion health plan described in section 806(a)(2), if the plan 

11 commenced operations in such State after the date of the 

12 enactment of this section. 

13 ‘‘(b) CONTRIBUTION TAX.—For purposes of this sec14 tion, the term ‘contribution tax’ imposed by a State on 

15 an association health plan means any tax imposed by such 

16 State if— 

17 ‘‘(1) such tax is computed by applying a rate to 

18 the amount of premiums or contributions, with re19 spect to individuals covered under the plan who are 

20 residents of such State, which are received by the 

21 plan from participating employers located in such 

22 State or from such individuals; 

23 ‘‘(2) the rate of such tax does not exceed the 

24 rate of any tax imposed by such State on premiums 

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1 tenance organizations for health insurance coverage 

2 offered in such State in connection with a group 

3 health plan; 

4 ‘‘(3) such tax is otherwise nondiscriminatory; 

5 and 

6 ‘‘(4) the amount of any such tax assessed on 

7 the plan is reduced by the amount of any tax or as8 sessment otherwise imposed by the State on pre9 miums, contributions, or both received by insurers or 

10 health maintenance organizations for health insur11 ance coverage, aggregate excess/stop loss insurance 

12 (as defined in section 806(g)(1)), specific excess/stop 

13 loss insurance (as defined in section 806(g)(2)), 

14 other insurance related to the provision of medical 

15 care under the plan, or any combination thereof pro16 vided by such insurers or health maintenance organi17 zations in such State in connection with such plan. 

18 ‘‘SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION. 

19 ‘‘(a) DEFINITIONS.—For purposes of this part— 

20 ‘‘(1) GROUP HEALTH PLAN.—The term ‘group 

21 health plan’ has the meaning provided in section 

22 733(a)(1) (after applying subsection (b) of this sec23 tion). 

24 ‘‘(2) MEDICAL CARE.—The term ‘medical care’ 

25 has the meaning provided in section 733(a)(2). 


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1 ‘‘(3) HEALTH INSURANCE COVERAGE.—The 

2 term ‘health insurance coverage’ has the meaning 

3 provided in section 733(b)(1). 

4 ‘‘(4) HEALTH INSURANCE ISSUER.—The term 

5 ‘health insurance issuer’ has the meaning provided 

6 in section 733(b)(2). 

7 ‘‘(5) APPLICABLE AUTHORITY.—The term ‘ap8 plicable authority’ means the Secretary, except that, 

9 in connection with any exercise of the Secretary’s 

10 authority regarding which the Secretary is required 

11 under section 506(d) to consult with a State, such 

12 term means the Secretary, in consultation with such 

13 State. 

14 ‘‘(6) HEALTH STATUS-RELATED FACTOR.—The 

15 term ‘health status-related factor’ has the meaning 

16 provided in section 733(d)(2). 

17 ‘‘(7) INDIVIDUAL MARKET.— 

18 ‘‘(A) IN GENERAL.—The term ‘individual 

19 market’ means the market for health insurance 

20 coverage offered to individuals other than in 

21 connection with a group health plan. 

22 ‘‘(B) TREATMENT OF VERY SMALL

23 GROUPS.— 

24 ‘‘(i) IN GENERAL.—Subject to clause 

25 (ii), such term includes coverage offered in 


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•S 4796 IS

1 connection with a group health plan that 

2 has fewer than 2 participants as current 

3 employees or participants described in sec4 tion 732(d)(3) on the first day of the plan 

5 year. 

6 ‘‘(ii) STATE EXCEPTION.—Clause (i) 

7 shall not apply in the case of health insur8 ance coverage offered in a State if such 

9 State regulates the coverage described in 

10 such clause in the same manner and to the 

11 same extent as coverage in the small group 

12 market (as defined in section 2791(e)(5) of 

13 the Public Health Service Act) is regulated 

14 by such State. 

15 ‘‘(8) PARTICIPATING EMPLOYER.—The term 

16 ‘participating employer’ means, in connection with 

17 an association health plan, any employer, if any indi18 vidual who is an employee of such employer, a part19 ner in such employer, or a self-employed individual 

20 who is such employer (or any dependent, as defined 

21 under the terms of the plan, of such individual) is 

22 or was covered under such plan in connection with 

23 the status of such individual as such an employee, 

24 partner, or self-employed individual in relation to the 

25 plan. 


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1 ‘‘(9) APPLICABLE STATE AUTHORITY.—The 

2 term ‘applicable State authority’ means, with respect 

3 to a health insurance issuer in a State, the State in4 surance commissioner or official or officials des5 ignated by the State to enforce the requirements of 

6 title XXVII of the Public Health Service Act for the 

7 State involved with respect to such issuer. 

8 ‘‘(10) QUALIFIED ACTUARY.—The term ‘quali9 fied actuary’ means an individual who is a member 

10 of the American Academy of Actuaries. 

11 ‘‘(11) AFFILIATED MEMBER.—The term ‘affili12 ated member’ means, in connection with a sponsor— 

13 ‘‘(A) a person who is otherwise eligible to 

14 be a member of the sponsor but who elects an 

15 affiliated status with the sponsor, 

16 ‘‘(B) in the case of a sponsor with mem17 bers which consist of associations, a person who 

18 is a member of any such association and elects 

19 an affiliated status with the sponsor, or 

20 ‘‘(C) in the case of an association health 

21 plan in existence on the date of the enactment 

22 of this section, a person eligible to be a member 

23 of the sponsor or one of its member associa24 tions. 


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1 ‘‘(12) LARGE EMPLOYER.—The term ‘large em2 ployer’ means, in connection with a group health 

3 plan with respect to a plan year, an employer who 

4 employed an average of at least 51 employees on 

5 business days during the preceding calendar year 

6 and who employs at least 2 employees on the first 

7 day of the plan year. 

8 ‘‘(13) SMALL EMPLOYER.—The term ‘small em9 ployer’ means, in connection with a group health 

10 plan with respect to a plan year, an employer who 

11 is not a large employer. 

12 ‘‘(b) RULES OF CONSTRUCTION.— 

13 ‘‘(1) EMPLOYERS AND EMPLOYEES.—For pur14 poses of determining whether a plan, fund, or pro15 gram is an employee welfare benefit plan which is an 

16 association health plan, and for purposes of applying 

17 this title in connection with such plan, fund, or pro18 gram so determined to be such an employee welfare 

19 benefit plan— 

20 ‘‘(A) in the case of a partnership, the term 

21 ‘employer’ (as defined in section 3(5)) includes 

22 the partnership in relation to the partners, and 

23 the term ‘employee’ (as defined in section 3(6)) 

24 includes any partner in relation to the partner25 ship; and 


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1 ‘‘(B) in the case of a self-employed indi2 vidual, the term ‘employer’ (as defined in sec3 tion 3(5)) and the term ‘employee’ (as defined 

4 in section 3(6)) shall include such individual. 

5 ‘‘(2) PLANS, FUNDS, AND PROGRAMS TREATED

6 AS EMPLOYEE WELFARE BENEFIT PLANS.—In the 

7 case of any plan, fund, or program which was estab8 lished or is maintained for the purpose of providing 

9 medical care (through the purchase of insurance or 

10 otherwise) for employees (or their dependents) cov11 ered thereunder and which demonstrates to the Sec12 retary that all requirements for certification under 

13 this part would be met with respect to such plan, 

14 fund, or program if such plan, fund, or program 

15 were a group health plan, such plan, fund, or pro16 gram shall be treated for purposes of this title as an 

17 employee welfare benefit plan on and after the date 

18 of such demonstration.’’. 

19 (b) CONFORMING AMENDMENTS TO PREEMPTION

20 RULES.— 

21 (1) Section 514(b)(6) of such Act (29 U.S.C. 

22 1144(b)(6)) is amended by adding at the end the 

23 following new subparagraph: 

24 ‘‘(E) The preceding subparagraphs of this paragraph 

25 do not apply with respect to any State law in the case 


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•S 4796 IS

1 of an association health plan which is certified under part 

2 8.’’. 

3 (2) Section 514 of such Act (29 U.S.C. 1144) 

4 is amended— 

5 (A) in subsection (b)(4), by striking ‘‘Sub6 section (a)’’ and inserting ‘‘Subsections (a) and 

7 (f)’’; 

8 (B) in subsection (b)(5), by striking ‘‘sub9 section (a)’’ in subparagraph (A) and inserting 

10 ‘‘subsection (a) of this section and subsections 

11 (a)(2)(B) and (b) of section 805’’, and by strik12 ing ‘‘subsection (a)’’ in subparagraph (B) and 

13 inserting ‘‘subsection (a) of this section or sub14 section (a)(2)(B) or (b) of section 805’’; and 

15 (C) by adding at the end the following new 

16 subsection: 

17 ‘‘(f)(1) Except as provided in subsection (b)(4), the 

18 provisions of this title shall supersede any and all State 

19 laws insofar as they may now or hereafter preclude, or 

20 have the effect of precluding, a health insurance issuer 

21 from offering health insurance coverage in connection with 

22 an association health plan which is certified under part 

23 8. 

24 ‘‘(2) Except as provided in paragraphs (4) and (5) 

25 of subsection (b) of this section— 


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1 ‘‘(A) In any case in which health insurance cov2 erage of any policy type is offered under an associa3 tion health plan certified under part 8 to a partici4 pating employer operating in such State, the provi5 sions of this title shall supersede any and all laws 

6 of such State insofar as they may preclude a health 

7 insurance issuer from offering health insurance cov8 erage of the same policy type to other employers op9 erating in the State which are eligible for coverage 

10 under such association health plan, whether or not 

11 such other employers are participating employers in 

12 such plan. 

13 ‘‘(B) In any case in which health insurance cov14 erage of any policy type is offered in a State under 

15 an association health plan certified under part 8 and 

16 the filing, with the applicable State authority (as de17 fined in section 812(a)(9)), of the policy form in 

18 connection with such policy type is approved by such 

19 State authority, the provisions of this title shall su20 persede any and all laws of any other State in which 

21 health insurance coverage of such type is offered, in22 sofar as they may preclude, upon the filing in the 

23 same form and manner of such policy form with the 

24 applicable State authority in such other State, the 

25 approval of the filing in such other State. 


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1 ‘‘(3) Nothing in subsection (b)(6)(E) or the preceding 

2 provisions of this subsection shall be construed, with re3 spect to health insurance issuers or health insurance cov4 erage, to supersede or impair the law of any State— 

5 ‘‘(A) providing solvency standards or similar 

6 standards regarding the adequacy of insurer capital, 

7 surplus, reserves, or contributions, or 

8 ‘‘(B) relating to prompt payment of claims. 

9 ‘‘(4) For additional provisions relating to association 

10 health plans, see subsections (a)(2)(B) and (b) of section 

11 805. 

12 ‘‘(5) For purposes of this subsection, the term ‘asso13 ciation health plan’ has the meaning provided in section 

14 801(a), and the terms ‘health insurance coverage’, ‘par15 ticipating employer’, and ‘health insurance issuer’ have 

16 the meanings provided such terms in section 812, respec17 tively.’’. 

18 (3) Section 514(b)(6)(A) of such Act (29 

19 U.S.C. 1144(b)(6)(A)) is amended— 

20 (A) in clause (i)(II), by striking ‘‘and’’ at 

21 the end; 

22 (B) in clause (ii), by inserting ‘‘and which 

23 does not provide medical care (within the mean24 ing of section 733(a)(2)),’’ after ‘‘arrangeVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00156 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 ment,’’, and by striking ‘‘title.’’ and inserting 

2 ‘‘title, and’’; and 

3 (C) by adding at the end the following new 

4 clause: 

5 ‘‘(iii) subject to subparagraph (E), in the case 

6 of any other employee welfare benefit plan which is 

7 a multiple employer welfare arrangement and which 

8 provides medical care (within the meaning of section 

9 733(a)(2)), any law of any State which regulates in10 surance may apply.’’. 

11 (4) Section 514(d) of such Act (29 U.S.C. 

12 1144(d)) is amended— 

13 (A) by striking ‘‘Nothing’’ and inserting 

14 ‘‘(1) Except as provided in paragraph (2), noth15 ing’’; and 

16 (B) by adding at the end the following new 

17 paragraph: 

18 ‘‘(2) Nothing in any other provision of law enacted 

19 on or after the date of the enactment of this paragraph 

20 shall be construed to alter, amend, modify, invalidate, im21 pair, or supersede any provision of this title, except by 

22 specific cross-reference to the affected section.’’. 

23 (c) PLAN SPONSOR.—Section 3(16)(B) of such Act 

24 (29 U.S.C. 102(16)(B)) is amended by adding at the end 

25 the following new sentence: ‘‘Such term also includes a 


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•S 4796 IS

1 person serving as the sponsor of an association health plan 

2 under part 8.’’. 

3 (d) DISCLOSURE OF SOLVENCY PROTECTIONS RE4 LATED TO SELF-INSURED AND FULLY INSURED OPTIONS

5 UNDER ASSOCIATION HEALTH PLANS.—Section 102(b) 

6 of such Act (29 U.S.C. 102(b)) is amended by adding at 

7 the end the following: ‘‘An association health plan shall 

8 include in its summary plan description, in connection 

9 with each benefit option, a description of the form of sol10 vency or guarantee fund protection secured pursuant to 

11 this Act or applicable State law, if any.’’. 

12 (e) SAVINGS CLAUSE.—Section 731(c) of such Act is 

13 amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 

14 (f) REPORT TO THE CONGRESS REGARDING CERTIFI15 CATION OF SELF-INSURED ASSOCIATION HEALTH

16 PLANS.—Not later than January 1, 2022, the Secretary 

17 of Labor shall report to the Committee on Education and 

18 Labor of the House of Representatives and the Committee 

19 on Health, Education, Labor, and Pensions of the Senate 

20 the effect association health plans have had, if any, on 

21 reducing the number of uninsured individuals. 

22 (g) CLERICAL AMENDMENT.—The table of contents 

23 in section 1 of the Employee Retirement Income Security 

24 Act of 1974 is amended by inserting after the item relat25 ing to section 734 the following new items: 

‘‘PART 8. RULES GOVERNING ASSOCIATION HEALTH PLANS


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‘‘801. Association health plans. 

‘‘802. Certification of association health plans. 

‘‘803. Requirements relating to sponsors and boards of trustees. 

‘‘804. Participation and coverage requirements. 

‘‘805. Other requirements relating to plan documents, contribution rates, and 

benefit options. 

‘‘806. Maintenance of reserves and provisions for solvency for plans providing 

health benefits in addition to health insurance coverage. 

‘‘807. Requirements for application and related requirements. 

‘‘808. Notice requirements for voluntary termination. 

‘‘809. Corrective actions and mandatory termination. 

‘‘810. Trusteeship by the Secretary of insolvent association health plans providing health benefits in addition to health insurance coverage. 

‘‘811. State assessment authority. 

‘‘812. Definitions and rules of construction.’’. 

1 SEC. 212. CLARIFICATION OF TREATMENT OF SINGLE EM2 PLOYER ARRANGEMENTS. 

3 Section 3(40)(B) of the Employee Retirement Income 

4 Security Act of 1974 (29 U.S.C. 1002(40)(B)) is amend5 ed— 

6 (1) in clause (i), by inserting after ‘‘control 

7 group,’’ the following: ‘‘except that, in any case in 

8 which the benefit referred to in subparagraph (A) 

9 consists of medical care (as defined in section 

10 812(a)(2)), two or more trades or businesses, wheth11 er or not incorporated, shall be deemed a single em12 ployer for any plan year of such plan, or any fiscal 

13 year of such other arrangement, if such trades or 

14 businesses are within the same control group during 

15 such year or at any time during the preceding 1-year 

16 period,’’; 

17 (2) in clause (iii), by striking ‘‘(iii) the deter18 mination’’ and inserting the following: 


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1 ‘‘(iii)(I) in any case in which the benefit re2 ferred to in subparagraph (A) consists of medical 

3 care (as defined in section 812(a)(2)), the deter4 mination of whether a trade or business is under 

5 ‘common control’ with another trade or business 

6 shall be determined under regulations of the Sec7 retary applying principles consistent and coextensive 

8 with the principles applied in determining whether 

9 employees of two or more trades or businesses are 

10 treated as employed by a single employer under sec11 tion 4001(b), except that, for purposes of this para12 graph, an interest of greater than 25 percent may 

13 not be required as the minimum interest necessary 

14 for common control, or 

15 ‘‘(II) in any other case, the determination’’; 

16 (3) by redesignating clauses (iv) and (v) as 

17 clauses (v) and (vi), respectively; and 

18 (4) by inserting after clause (iii) the following 

19 new clause: 

20 ‘‘(iv) in any case in which the benefit referred 

21 to in subparagraph (A) consists of medical care (as 

22 defined in section 812(a)(2)), in determining, after 

23 the application of clause (i), whether benefits are 

24 provided to employees of two or more employers, the 

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1 ticipating employer if, after the application of clause 

2 (i), the number of individuals who are employees and 

3 former employees of any one participating employer 

4 and who are covered under the arrangement is 

5 greater than 75 percent of the aggregate number of 

6 all individuals who are employees or former employ7 ees of participating employers and who are covered 

8 under the arrangement,’’. 

9 SEC. 213. ENFORCEMENT PROVISIONS RELATING TO ASSO10 CIATION HEALTH PLANS. 

11 (a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL

12 MISREPRESENTATIONS.—Section 501 of the Employee 

13 Retirement Income Security Act of 1974 (29 U.S.C. 1131) 

14 is amended by adding at the end the following new sub15 section: 

16 ‘‘(c) Any person who willfully falsely represents, to 

17 any employee, any employee’s beneficiary, any employer, 

18 the Secretary, or any State, a plan or other arrangement 

19 established or maintained for the purpose of offering or 

20 providing any benefit described in section 3(1) to employ21 ees or their beneficiaries as— 

22 ‘‘(1) being an association health plan which has 

23 been certified under part 8; 

24 ‘‘(2) having been established or maintained 

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1 gaining agreements which are reached pursuant to 

2 collective bargaining described in section 8(d) of the 

3 National Labor Relations Act (29 U.S.C. 158(d)) or 

4 paragraph Fourth of section 2 of the Railway Labor 

5 Act (45 U.S.C. 152, paragraph Fourth) or which are 

6 reached pursuant to labor-management negotiations 

7 under similar provisions of State public employee re8 lations laws; or 

9 ‘‘(3) being a plan or arrangement described in 

10 section 3(40)(A)(i), 

11 shall, upon conviction, be imprisoned not more than 5 

12 years, be fined under title 18, United States Code, or 

13 both.’’. 

14 (b) CEASE ACTIVITIES ORDERS.—Section 502 of the 

15 Employee Retirement Income Security Act of 1974 (29 

16 U.S.C. 1132) is amended by adding at the end the fol17 lowing new subsection: 

18 ‘‘(n) ASSOCIATION HEALTH PLAN CEASE AND DE19 SIST ORDERS.— 

20 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

21 upon application by the Secretary showing the oper22 ation, promotion, or marketing of an association 

23 health plan (or similar arrangement providing bene24 fits consisting of medical care (as defined in section 

25 733(a)(2))) that— 


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1 ‘‘(A) is not certified under part 8, is sub2 ject under section 514(b)(6) to the insurance 

3 laws of any State in which the plan or arrange4 ment offers or provides benefits, and is not li5 censed, registered, or otherwise approved under 

6 the insurance laws of such State; or 

7 ‘‘(B) is an association health plan certified 

8 under part 8 and is not operating in accordance 

9 with the requirements under part 8 for such 

10 certification, 

11 a district court of the United States shall enter an 

12 order requiring that the plan or arrangement cease 

13 activities. 

14 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

15 apply in the case of an association health plan or 

16 other arrangement if the plan or arrangement shows 

17 that— 

18 ‘‘(A) all benefits under it referred to in 

19 paragraph (1) consist of health insurance cov20 erage; and 

21 ‘‘(B) with respect to each State in which 

22 the plan or arrangement offers or provides ben23 efits, the plan or arrangement is operating in 

24 accordance with applicable State laws that are 

25 not superseded under section 514. 


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1 ‘‘(3) ADDITIONAL EQUITABLE RELIEF.—The 

2 court may grant such additional equitable relief, in3 cluding any relief available under this title, as it 

4 deems necessary to protect the interests of the pub5 lic and of persons having claims for benefits against 

6 the plan.’’. 

7 (c) RESPONSIBILITY FOR CLAIMS PROCEDURE.— 

8 Section 503 of the Employee Retirement Income Security 

9 Act of 1974 (29 U.S.C. 1133) is amended by inserting 

10 ‘‘(a) IN GENERAL.—’’ before ‘‘In accordance’’, and by 

11 adding at the end the following new subsection: 

12 ‘‘(b) ASSOCIATION HEALTH PLANS.—The terms of 

13 each association health plan which is or has been certified 

14 under part 8 shall require the board of trustees or the 

15 named fiduciary (as applicable) to ensure that the require16 ments of this section are met in connection with claims 

17 filed under the plan.’’. 

18 SEC. 214. COOPERATION BETWEEN FEDERAL AND STATE 

19 AUTHORITIES. 

20 Section 506 of the Employee Retirement Income Se21 curity Act of 1974 (29 U.S.C. 1136) is amended by adding 

22 at the end the following new subsection: 

23 ‘‘(d) CONSULTATION WITH STATES WITH RESPECT

24 TO ASSOCIATION HEALTH PLANS.— 


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1 ‘‘(1) AGREEMENTS WITH STATES.—The Sec2 retary shall consult with the State recognized under 

3 paragraph (2) with respect to an association health 

4 plan regarding the exercise of— 

5 ‘‘(A) the Secretary’s authority under sec6 tions 502 and 504 to enforce the requirements 

7 for certification under part 8; and 

8 ‘‘(B) the Secretary’s authority to certify 

9 association health plans under part 8 in accord10 ance with regulations of the Secretary applica11 ble to certification under part 8. 

12 ‘‘(2) RECOGNITION OF PRIMARY DOMICILE

13 STATE.—In carrying out paragraph (1), the Sec14 retary shall ensure that only one State will be recog15 nized, with respect to any particular association 

16 health plan, as the State with which consultation is 

17 required. In carrying out this paragraph— 

18 ‘‘(A) in the case of a plan which provides 

19 health insurance coverage (as defined in section 

20 812(a)(3)), such State shall be the State with 

21 which filing and approval of a policy type of22 fered by the plan was initially obtained, and 

23 ‘‘(B) in any other case, the Secretary shall 

24 take into account the places of residence of the 

25 participants and beneficiaries under the plan 


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1 and the State in which the trust is main2 tained.’’. 

3 SEC. 215. EFFECTIVE DATE AND TRANSITIONAL AND 

4 OTHER RULES. 

5 (a) EFFECTIVE DATE.—The amendments made by 

6 this Act shall take effect 1 year after the date of the enact7 ment of this Act. The Secretary of Labor shall first issue 

8 all regulations necessary to carry out the amendments 

9 made by this Act within 1 year after the date of the enact10 ment of this Act. 

11 (b) TREATMENT OF CERTAIN EXISTING HEALTH

12 BENEFITS PROGRAMS.— 

13 (1) IN GENERAL.—In any case in which, as of 

14 the date of the enactment of this Act, an arrange15 ment is maintained in a State for the purpose of 

16 providing benefits consisting of medical care for the 

17 employees and beneficiaries of its participating em18 ployers, at least 200 participating employers make 

19 contributions to such arrangement, such arrange20 ment has been in existence for at least 10 years, and 

21 such arrangement is licensed under the laws of one 

22 or more States to provide such benefits to its par23 ticipating employers, upon the filing with the appli24 cable authority (as defined in section 812(a)(5) of 

25 the Employee Retirement Income Security Act of 


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1 1974 (as amended by this Act)) by the arrangement 

2 of an application for certification of the arrangement 

3 under part 8 of subtitle B of title I of such Act— 

4 (A) such arrangement shall be deemed to 

5 be a group health plan for purposes of title I 

6 of such Act; 

7 (B) the requirements of sections 801(a) 

8 and 803(a) of the Employee Retirement Income 

9 Security Act of 1974 shall be deemed met with 

10 respect to such arrangement; 

11 (C) the requirements of section 803(b) of 

12 such Act shall be deemed met, if the arrange13 ment is operated by a board of directors 

14 which— 

15 (i) is elected by the participating em16 ployers, with each employer having one 

17 vote; and 

18 (ii) has complete fiscal control over 

19 the arrangement and which is responsible 

20 for all operations of the arrangement; 

21 (D) the requirements of section 804(a) of 

22 such Act shall be deemed met with respect to 

23 such arrangement; and 

24 (E) the arrangement may be certified by 

25 any applicable authority with respect to its opVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00167 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 erations in any State only if it operates in such 

2 State on the date of certification. 

3 The provisions of this subsection shall cease to apply 

4 with respect to any such arrangement at such time 

5 after the date of the enactment of this Act as the 

6 applicable requirements of this subsection are not 

7 met with respect to such arrangement. 

8 (2) DEFINITIONS.—For purposes of this sub9 section, the terms ‘‘group health plan’’, ‘‘medical 

10 care’’, and ‘‘participating employer’’ shall have the 

11 meanings provided in section 812 of the Employee 

12 Retirement Income Security Act of 1974, except 

13 that the reference in paragraph (7) of such section 

14 to an ‘‘association health plan’’ shall be deemed a 

15 reference to an arrangement referred to in this sub16 section. 

17 (c) COORDINATION WITH EXISTING LAW.—Nothing 

18 in this Act shall require plans to become certified under 

19 section 802 of the Employee Retirement Income Security 

20 Act of 1974, as amended by this Act, or require plans 

21 that are not certified under such section to comply with 

22 the requirements under part 8 of such Act, except to the 

23 extent provided in section 809 of such Act. 


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1 SEC. 216. SHORT-TERM LIMITED DURATION INSURANCE. 

2 (a) DEFINITION.—Section 2791(b) of the Public 

3 Health Service Act (42 U.S.C. 300gg–91(b)) is amended 

4 by adding at the end the following: 

5 ‘‘(6) SHORT-TERM LIMITED DURATION INSUR6 ANCE.—The term ‘short-term limited duration insur7 ance’ means health insurance coverage provided pur8 suant to a contract with a health insurance issuer 

9 that has an expiration date specified in the contract 

10 (not taking into account any extensions that may be 

11 elected by the policyholder with or without the 

12 issuer’s consent) that is less than 12 months after 

13 the original effective date of the contract.’’. 

14 (b) GUARANTEED RENEWABILITY.—Section 2703 of 

15 the Public Health Service Act (42 U.S.C. 300gg–2) is 

16 amended— 

17 (1) in subsection (a), by inserting ‘‘or offers 

18 short-term limited duration insurance’’ after ‘‘group 

19 market’’; and 

20 (2) by adding at the end the following: 

21 ‘‘(f) APPLICATION TO SHORT-TERM LIMITED DURA22 TION INSURANCE.— 

23 ‘‘(1) IN GENERAL.—In applying this section in 

24 the case of short-term limited duration insurance— 

25 ‘‘(A) a reference to ‘health insurance cov26 erage’ with respect to such coverage offered in 


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1 the individual market shall be deemed to in2 clude short-term limited duration insurance; 

3 and 

4 ‘‘(B) a reference to ‘health insurance 

5 issuer’ with respect to health insurance cov6 erage offered in the individual market shall be 

7 deemed to include an issuer of short-term lim8 ited duration insurance. 

9 ‘‘(2) SPECIAL RULE FOR SHORT-TERM LIMITED

10 DURATION INSURANCE.—In the case of short-term 

11 limited duration insurance, at the time of application 

12 for enrollment in such insurance coverage, an issuer 

13 of such insurance may offer renewability of such 

14 coverage, and an individual may decline renewability 

15 of such coverage in accordance with this section, and 

16 the contract between such individual and the health 

17 insurance issuer shall specify whether the individual 

18 opted for renewability or no renewability.’’. 

19 (c) APPLICABILITY.—The amendments made by sub20 sections (a) and (b) shall apply with respect to contracts 

21 for short-term limited duration insurance that take effect 

22 on or after January 1, 2021. 


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1 Subtitle C—Improving Commercial 

2 Health Insurance 

3 SEC. 221. INVISIBLE GUARANTEED COVERAGE POOL REIN4 SURANCE PROGRAM; TAX ON EXCHANGE 

5 PLANS. 

6 (a) ESTABLISHMENT.—Not later than January 1, 

7 2021, the Secretary of Health and Human Services shall 

8 establish the Invisible Guaranteed Coverage Pool Reinsur9 ance Program (in this section referred to as the ‘‘IGCPR 

10 program’’). 

11 (b) STATE GRANTS.—Under the IGCPR program, 

12 the Secretary shall, from amounts appropriated under 

13 subsection (f) for a fiscal year, award grants to States for 

14 such fiscal year, in amounts determined in accordance 

15 with the allocation methodology specified under subsection 

16 (d). Such grants shall be used for the purpose of estab17 lishing or maintaining a qualifying Invisible Guaranteed 

18 Coverage Pool for the State. 

19 (c) FEDERAL DEFAULT.— 

20 (1) IN GENERAL.—In the case of a State that 

21 does not, by a date and in a manner specified by the 

22 Secretary, choose to be awarded a grant under sub23 section (b) for a fiscal year to operate a qualifying 

24 Invisible Guaranteed Coverage Pool for the State, 

25 the Secretary shall, from amounts appropriated 


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1 under subsection (f) for such fiscal year, use the al2 location determined for the State under subsection 

3 (d) for participation of such State in the Federal de4 fault qualifying Invisible Guaranteed Coverage Pool 

5 described in paragraph (2). 

6 (2) FEDERAL DEFAULT QUALIFYING INVISIBLE

7 GUARANTEED COVERAGE POOL.—The Federal de8 fault qualifying high risk pool is, with respect to 

9 each State that chooses not to be awarded a grant 

10 under subsection (b) with respect to a fiscal year for 

11 which funds are appropriated under subsection (f), 

12 an Invisible Guaranteed Coverage Pool under which 

13 health insurance issuers participating in the Ex14 change of such a State, with respect to designated 

15 individuals who are enrolled in health insurance cov16 erage and are expected to experience higher than av17 erage health costs as determined by the insurer, cede 

18 risk to the pool, without affecting the premium paid 

19 by the designated individuals or their terms of cov20 erage. With respect to such pool— 

21 (A) high-risk individuals designated for 

22 cession to the pool shall be designated by the 

23 ceding issuer; 

24 (B) the premium amount the ceding issuer 

25 shall pay to the reinsurance pool shall be 90 


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•S 4796 IS

1 percent of the premium paid to the issuer for 

2 the coverage; 

3 (C) the ceding issuer shall retain the same 

4 risk under the ceded policies as under any other 

5 policy of the issuer with respect to the first 

6 $10,000 of benefits for each ceded policy in7 volved and will not retain any risk under ceded 

8 policies after such first $10,000 of benefits; and 

9 (D) after a ceding issuer, with respect to 

10 a ceded policy, no longer retains risk under 

11 such policy pursuant to subparagraph (C), the 

12 negotiated rate under such policy for items and 

13 services shall be payable at the reimbursement 

14 rate under the Medicare program under title 

15 XVIII of the Social Security Act for such items 

16 and services, or in the case of items and serv17 ices for which payment is available under the 

18 policy but not the Medicare program, at a rate 

19 determined by the Secretary. 

20 (d) ALLOCATION METHODOLOGY.—Not later than 

21 June 30, 2021, the Secretary shall specify an allocation 

22 methodology for determining the amount of funds appro23 priated under subsection (f) for a fiscal year to be allo24 cated for each State for purposes of subsections (b) and 

25 (c). Such methodology shall be based on the number of 


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1 residents of each State and the general health status of 

2 such residents. 

3 (e) QUALIFYING INVISIBLE GUARANTEED COVERAGE

4 POOL.—For purposes of this section, the term ‘‘qualifying 

5 Invisible Guaranteed Coverage Pool’’ means, with respect 

6 to a State, a method of designation under which health 

7 insurance issuers identify individuals who experience high8 er than average health costs as determined by the State 

9 and are enrolled in health insurance coverage offered in 

10 the individual market, and cede the risk of spending more 

11 than $10,000 on health care services for a single indi12 vidual to the pool without affecting the premium paid by 

13 the designated individuals or their terms of coverage. With 

14 respect to such pool, the State, or an entity operating the 

15 pool on behalf of the State, shall establish— 

16 (1) the premium amount the ceding issuer shall 

17 pay to the reinsurance pool; 

18 (2) the applicable attachment points or coinsur19 ance percentages if the ceding issuer retains any 

20 portion of the risk under ceded policies, except that 

21 the provisions of subparagraphs (C) and (D) of sub22 section (c)(2) shall apply to such high risk pool in 

23 the same manner as such clauses apply to the Fed24 eral default high risk pool; and 


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1 (3) the mechanism by which high-risk individ2 uals are designated for cession to the pool, which 

3 may include a list of designated high-cost health 

4 conditions. 

5 (f) APPROPRIATIONS.—There is appropriated to the 

6 Secretary of Health and Human Services 

7 $200,000,000,000 to carry out this section for the period 

8 of fiscal year 2021 through fiscal year 2029. 

9 (g) TAX ON HEALTH INSURANCE PLANS SOLD ON

10 EXCHANGES.— 

11 (1) IN GENERAL.—Chapter 34 of the Internal 

12 Revenue Code of 1986 is amended by adding at the 

13 end the following new subchapter: 

14 ‘‘Subchapter C—Additional Tax on Health In15 surance Plans Sold by Insurers Offering 

16 Plans on Exchanges 

‘‘Sec. 4401. Additional tax on health insurance plans sold by insurers offering 

plans on exchanges. 

17 ‘‘SEC. 4401. ADDITIONAL TAX ON HEALTH INSURANCE 

18 PLANS SOLD BY INSURERS OFFERING PLANS 

19 ON EXCHANGES. 

20 ‘‘(a) IMPOSITION OF TAX.—There is imposed a tax 

21 of $4 for each policy month of each health insurance policy 

22 sold by insurers offering plans through an Exchange es23 tablished under the Patient Protection and Affordable 

24 Care Act. 


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1 ‘‘(b) LIABILITY.—The tax imposed by subsection (a) 

2 shall be paid by the plan sponsor.’’. 

3 (2) CONFORMING AMENDMENT.—The table of 

4 subchapters for chapter 34 of the Internal Revenue 

5 Code of 1986 is amended by adding at the end the 

6 following item: 

‘‘SUBCHAPTER C—ADDITIONAL TAX ON HEALTH INSURANCE PLANS SOLD BY

INSURERS OFFERING PLANS ON EXCHANGES’’. 

7 (3) EFFECTIVE DATE.—The amendments made 

8 by this subsection shall apply with respect to months 

9 beginning after the date of enactment of this Act. 

10 (h) REPORT.—The Secretary of Health and Human 

11 Services, in collaboration with the Comptroller General of 

12 the United States, shall submit to Congress, not later than 

13 January 1, 2026, and again 5 years thereafter, a report 

14 on the status of reinsurance pool funding, along with any 

15 recommendations with respect to future allocations or 

16 funding methods for such pool. 

17 SEC. 222. EMPLOYER HEALTH INSURANCE MANDATE RE18 PEAL. 

19 (a) IN GENERAL.—Chapter 43 of the Internal Rev20 enue Code of 1986 is amended by striking section 4980H. 

21 (b) REPEAL OF RELATED REPORTING REQUIRE22 MENTS.—Subpart D of part III of subchapter A of chap23 ter 61 of such Code is amended by striking section 6056. 

24 (c) CONFORMING AMENDMENTS.— 


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1 (1) Section 6724(d)(1)(B) of such Code is 

2 amended by inserting ‘‘or’’ at the end of clause 

3 (xxiii), by striking ‘‘or’’ at the end of clause (xxiv), 

4 and by striking clause (xxv). 

5 (2) Section 6724(d)(2) of such Code is amend6 ed by inserting ‘‘or’’ at the end of subparagraph 

7 (GG) and by striking subparagraph (HH). 

8 (3) The table of sections for chapter 43 of such 

9 Code is amended by striking the item relating to sec10 tion 4980H. 

11 (4) The table of sections for subpart D of part 

12 III of subchapter A of chapter 61 of such Code is 

13 amended by striking the item relating to section 

14 6056. 

15 (5) Section 1513 of the Patient Protection and 

16 Affordable Care Act is amended by striking sub17 section (c). 

18 (d) EFFECTIVE DATE.— 

19 (1) IN GENERAL.—Except as otherwise pro20 vided in this subsection, the amendments made by 

21 this section shall apply to months and other periods 

22 beginning after December 31, 2021. 

23 (2) REPEAL OF STUDY AND REPORT.—The 

24 amendment made by subsection (c)(5) shall take ef25 fect on the date of the enactment of this Act. 


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1 SEC. 223. REFUNDABLE CREDITS FOR COVERAGE UNDER A 

2 QUALIFIED HEALTH PLAN FOR INDIVIDUALS 

3 OFFERED EMPLOYER-SPONSORED INSUR4 ANCE. 

5 (a) IN GENERAL.—Section 36B(c)(2) of the Internal 

6 Revenue Code of 1986 is amended— 

7 (1) in subparagraph (B)(i), by inserting ‘‘or 

8 section 5000A(f)(1)(B)’’, and 

9 (2) by striking subparagraph (C). 

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

11 this section shall apply to taxable years beginning after 

12 the date of the enactment of this Act. 

13 SEC. 224. INCLUSION IN INCOME OF CERTAIN COSTS OF 

14 EMPLOYER-PROVIDED COVERAGE UNDER 

15 HEALTH PLANS. 

16 (a) IN GENERAL.—Section 106 of the Internal Rev17 enue Code of 1986 is amended by adding at the end the 

18 following new subsection: 

19 ‘‘(h) LIMITATION.— 

20 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

21 apply to the extent that employer-provided coverage 

22 under health plans for an employee for a taxable 

23 year exceeds— 

24 ‘‘(A) $10,200 for self-only coverage, and 

25 ‘‘(B) $27,500 for all other coverage. 


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1 ‘‘(2) IN GENERAL.—In the case of any calendar 

2 year after 2021, the dollar amounts in paragraph 

3 (1) shall each be increased by an amount equal to— 

4 ‘‘(A) such dollar amount, multiplied by— 

5 ‘‘(B) the cost-of-living adjustment deter6 mined under section 1(f)(3) for such calendar 

7 year, determined 

8 ‘‘(i) by substituting ‘calendar year 

9 2021’ for ‘calendar year 2016’ in subpara10 graph (A)(ii) thereof, and 

11 ‘‘(ii) by substituting for the C–CPI–U 

12 referred to in section 1(f)(3)(A) the 

13 amount that such CPI would have been if 

14 the annual percentage increase in CPI with 

15 respect to each year after 2021 and before 

16 2031 had been one percentage point great17 er. 

18 ‘‘(3) TERMS RELATED TO CPI.— 

19 ‘‘(A) ANNUAL PERCENTAGE INCREASE.— 

20 For purposes of subparagraph (B)(ii)(II), the 

21 term ‘annual percentage increase’ means the 

22 percentage (if any) by which C–CPI–U for any 

23 year exceeds the C–CPI–U for the prior year. 

24 ‘‘(B) OTHER TERMS.—Terms used in this 

25 paragraph which are also used in section 


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1 1(f)(3) shall have the same meanings as when 

2 used in such section.’’. 

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

4 this section shall apply with respect to taxable years begin5 ning after December 31, 2021. 

6 SEC. 225. CHANGE IN PERMISSIBLE AGE VARIATION IN 

7 HEALTH INSURANCE PREMIUM RATES. 

8 Section 2701(a)(1)(A)(iii) of the Public Health Serv9 ice Act (42 U.S.C. 300gg(a)(1)(A)(iii)) is amended by in10 serting after ‘‘(consistent with section 2707(c))’’ the fol11 lowing: ‘‘or, for plan years beginning on or after January 

12 1, 2021, as the Secretary may implement through interim 

13 final regulation, 5 to 1 for adults (consistent with section 

14 2707(c))’’. 

15 SEC. 226. PREMIUM ASSISTANCE ADJUSTMENT TO RE16 FLECT AGE. 

17 (a) MODIFICATION OF APPLICABLE PERCENTAGE.— 

18 Section 36B(b)(3)(A) of the Internal Revenue Code of 

19 1986 is amended to read as follows: 

20 ‘‘(A) APPLICABLE PERCENTAGE.— 

21 ‘‘(i) IN GENERAL.—The applicable 

22 percentage for any taxable year shall be 

23 the percentage such that the applicable 

24 percentage for any taxpayer whose house25 hold income is within an income tier speciVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00180 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 fied in the following table shall increase, on 

2 a sliding scale in a linear manner, from the 

3 initial percentage to the final percentage 

4 specified in such table for such income tier 

5 with respect to a taxpayer of the age in6 volved: 

‘‘In the case of 

household income 

(expressed as a 

percent of the 

poverty line) 

within the 

following 

income tier: 

Up to Age 29 Age 30–39 Age 40–49 Age 50–59 Over Age 59 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Up to 100% 0 0 0 0 0 0 0 0 0 0 

100%–133% 2 2 2 2 2 2 2 2 2 2 

133%–150% 3 4.3 3 4.3 3 4.3 3 4.3 3 4.3 

150%–200% 4.3 6.7 4.3 6.7 4.3 6.7 4.3 6.7 4.3 6.7 

200%–250% 6.7 6.7 6.7 7.6 6.7 8.5 6.7 8.5 6.7 8.5 

250%–300% 6.7 6.7 7.6 7.6 8.3 9.8 8.3 9.8 8.3 9.8 

300%–400% 6.7 7 7.6 8 9.8 10 9.8 10 9.8 10 

400%-600% 7 9 8 10 10 15 10 15 10 15 

7 ‘‘(ii) AGE DETERMINATIONS.— 

8 ‘‘(I) IN GENERAL.—For purposes 

9 of clause (i), the age of the taxpayer 

10 taken into account under clause (i) 

11 with respect to any taxable year is the 

12 age attained by such taxpayer before 

13 the close of such taxable year. 

14 ‘‘(II) JOINT RETURNS.—In the 

15 case of a joint return, the age of the 

16 older spouse shall be taken into ac17 count under clause (i). 

18 ‘‘(iii) INDEXING.—In the case of any 

19 taxable year beginning after calendar year 


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1 2021, the initial and final percentages con2 tained in clause (i) shall be adjusted to re3 flect— 

4 ‘‘(I) the excess (if any) of the 

5 rate of premium growth for the period 

6 beginning with calendar year 2013 

7 and ending with calendar year 2021, 

8 over the rate of income growth for 

9 such period, and 

10 ‘‘(II) in addition to any adjust11 ment under subclause (I), the excess 

12 (if any) of the rate of premium 

13 growth for calendar year 2021, over 

14 the rate of growth in the consumer 

15 price index for calendar year 2021. 

16 ‘‘(iv) FAILSAFE.—Clause (iii)(II) shall 

17 apply only if the aggregate amount of pre18 mium tax credits under this section and 

19 cost-sharing reductions under section 1402 

20 of the Patient Protection and Affordable 

21 Care Act for the preceding calendar year 

22 exceeds an amount equal to 0.504 percent 

23 of the gross domestic product for such cal24 endar year.’’. 


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1 (b) EXPANSION OF ELIGIBILITY.—Section 36B of the 

2 Internal Revenue Code of 1986 is amended— 

3 (1) in subsection (c)(1)(A), by striking ‘‘400’’ 

4 and inserting ‘‘600’’; and 

5 (2) in subsection (f)(2)(B)(i), by striking ‘‘400’’ 

6 each place such reference appears and inserting 

7 ‘‘600’’ in each such place. 

8 (c) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2021. 

11 SEC. 227. PREMIUM ASSISTANCE. 

12 Notwithstanding any other provision of law, the Sec13 retary of the Treasury shall calculate the credit allowable 

14 under section 36B of the Internal Revenue Code of 1986 

15 based on the taxpayer’s prior year tax return and the Sec16 retary of Health and Human Services shall provide for 

17 open enrollment periods that end on April 15. 

18 SEC. 228. ADDING COPPER PLANS TO EXCHANGES. 

19 (a) IN GENERAL.—Section 1302 of the Patient Pro20 tection and Affordable Care Act (42 U.S.C. 18022) is 

21 amended— 

22 (1) in subsection (a)(3), by inserting ‘‘copper,’’ 

23 after ‘‘either the’’; 

24 (2) in subsection (c), by adding at the end the 

25 following new paragraph: 


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1 ‘‘(5) SPECIAL RULE FOR COPPER PLANS.—A 

2 health plan in the copper level of coverage (as de3 scribed in subsection (d)(1)(E)) shall be deemed to 

4 meet the requirements of this subsection.’’; 

5 (3) in subsection (d)— 

6 (A) in paragraph (1), by adding at the end 

7 the following new subparagraph: 

8 ‘‘(E) COPPER LEVEL.—A plan in the cop9 per level shall provide a level of coverage that 

10 is designed to provide benefits that are actuari11 ally equivalent to 50 percent of the full actu12 arial value of the benefits provided under the 

13 plan and will have out-of-pocket limits that are 

14 30 percent higher than bronze plans.’’; and 

15 (B) in paragraph (4)— 

16 (i) by inserting ‘‘copper,’’ after ‘‘any 

17 reference to a’’; and 

18 (ii) by inserting ‘‘copper,’’ after ‘‘pro19 viding a’’; and 

20 (4) in subsection (e)(1), by inserting ‘‘copper,’’ 

21 after ‘‘not providing a’’. 

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

23 this section shall apply with respect to plan years begin24 ning on or after January 1, 2021. 


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1 SEC. 229. COPPER AND BRONZE PLANS. 

2 Notwithstanding any other provision of law, refund3 able credits for coverage under a qualified health plan and 

4 cost-sharing reductions may be used to purchase bronze 

5 and copper plans. 

6 SEC. 230. WAIVERS FOR STATE INNOVATION. 

7 (a) STREAMLINING THE STATE APPLICATION PROC8 ESS.—Section 1332 of the Patient Protection and Afford9 able Care Act (42 U.S.C. 18052) is amended— 

10 (1) in subsection (a)(1)(C), by striking ‘‘the 

11 law’’ and inserting ‘‘a law or has in effect a certifi12 cation’’; and 

13 (2) in subsection (b)(2)— 

14 (A) in the paragraph heading, by inserting 

15 ‘‘OR CERTIFY’’ after ‘‘LAW’’; 

16 (B) in subparagraph (A)— 

17 (i) by striking ‘‘A law’’ and inserting 

18 the following: 

19 ‘‘(i) LAWS.—A law’’; and 

20 (ii) by adding at the end the fol21 lowing: 

22 ‘‘(ii) CERTIFICATIONS.—A certifi23 cation described in this paragraph is a doc24 ument, signed by the Governor of the 

25 State, that certifies that such Governor 

26 has the authority under existing Federal 


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1 and State law to take action under this 

2 section, including implementation of the 

3 State plan under subsection (a)(1)(B).’’; 

4 and 

5 (C) in subparagraph (B)— 

6 (i) in the subparagraph heading, by 

7 striking ‘‘OF OPT OUT’’; and 

8 (ii) by striking ‘‘may repeal a law’’ 

9 and all that follows through the period at 

10 the end and inserting the following: ‘‘may 

11 terminate the authority provided under the 

12 waiver with respect to the State by— 

13 ‘‘(i) repealing a law described in sub14 paragraph (A)(i); or 

15 ‘‘(ii) terminating a certification de16 scribed in subparagraph (A)(ii), through a 

17 certification for such termination signed by 

18 the Governor of the State.’’. 

19 (b) PROVIDING EXPEDITED APPROVAL OF STATE

20 WAIVERS.—Section 1332(d) of the Patient Protection and 

21 Affordable Care Act (42 U.S.C. 18052(d)) is amended— 

22 (1) in paragraph (1) by striking ‘‘180’’ and in23 serting ‘‘90’’; and 

24 (2) by adding at the end the following: 

25 ‘‘(3) EXPEDITED DETERMINATION.— 


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1 ‘‘(A) IN GENERAL.—With respect to any 

2 application under subsection (a)(1) submitted 

3 on or after the date of this paragraph or any 

4 such application submitted prior to such date of 

5 enactment and under review by the Secretary 

6 on such date of enactment, the Secretary shall 

7 make a determination on such application, 

8 using the criteria for approval otherwise appli9 cable under this section, not later than 45 days 

10 after the receipt of such application, and shall 

11 allow the public notice and comment at the 

12 State and Federal levels described under sub13 section (a)(4) to occur concurrently if such 

14 State application— 

15 ‘‘(i) is submitted in response to an ur16 gent situation, with respect to areas in the 

17 State that the Secretary determines are at 

18 risk for excessive premium increases or 

19 having no health plans offered in the appli20 cable health insurance market for the cur21 rent or following plan year; or 

22 ‘‘(ii) is for a waiver that is the same 

23 or substantially similar to a waiver that 

24 the Secretary already has approved for an25 other State. 


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1 ‘‘(B) APPROVAL.— 

2 ‘‘(i) URGENT SITUATIONS.— 

3 ‘‘(I) PROVISIONAL APPROVAL.—A 

4 waiver approved under the expedited 

5 determination process under subpara6 graph (A)(i) shall be in effect for a 

7 period of 3 years, unless the State re8 quests a shorter duration. 

9 ‘‘(II) FULL APPROVAL.—Subject 

10 to the requirements for approval oth11 erwise applicable under this section, 

12 not later than 1 year before the expi13 ration of a provisional waiver period 

14 described in subclause (I) with respect 

15 to an application described in sub16 paragraph (A)(i), the Secretary shall 

17 make a determination on whether to 

18 extend the approval of such waiver for 

19 the full term of the waiver requested 

20 by the State, for a total approval pe21 riod not to exceed 6 years. The Sec22 retary may request additional infor23 mation as the Secretary determines 

24 appropriate to make such determina25 tion. 


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•S 4796 IS

1 ‘‘(ii) APPROVAL OF SAME OR SIMILAR

2 APPLICATIONS.—An approval of a waiver 

3 under subparagraph (A)(ii) shall be subject 

4 to the terms of subsection (e). 

5 ‘‘(C) GAO STUDY.—Not later than 5 years 

6 after the date of enactment of this paragraph, 

7 the Comptroller General of the United States 

8 shall conduct a review of all waivers approved 

9 pursuant to an application under subparagraph 

10 (A)(ii) to evaluate whether such waivers met 

11 the requirements of subsection (b)(1) and 

12 whether the applications should have qualified 

13 for such expedited process.’’. 

14 (c) PROVIDING CERTAINTY FOR STATE-BASED RE15 FORMS.—Section 1332(e) of the Patient Protection and 

16 Affordable Care Act (42 U.S.C. 18052(e)) is amended by 

17 striking ‘‘No waiver’’ and all that follows through the pe18 riod at the end and inserting the following: ‘‘A waiver 

19 under this section— 

20 ‘‘(1) shall be in effect for a period of 6 years 

21 unless the State requests a shorter duration; 

22 ‘‘(2) may be renewed, subject to the State meet23 ing the criteria for approval otherwise applicable 

24 under this section, for unlimited additional 6-year 

25 periods upon application by the State; and 


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1 ‘‘(3) may not be suspended or terminated, in 

2 whole or in part, by the Secretary at any time before 

3 the date of expiration of the waiver period (including 

4 any renewal period under paragraph (2)), unless the 

5 Secretary determines that the State materially failed 

6 to comply with the terms and conditions of the waiv7 er.’’. 

8 (d) ENSURING PATIENT ACCESS TO MORE FLEXIBLE

9 HEALTH PLANS.—Section 1332(b)(1)(B) of the Patient 

10 Protection and Affordable Care Act (42 U.S.C. 

11 18052(b)(1)(B)) is amended by striking ‘‘at least as af12 fordable’’ and inserting ‘‘of comparable affordability, in13 cluding for low-income individuals, individuals with serious 

14 health needs, and other vulnerable populations,’’. 

15 (e) APPLICABILITY.—The amendments made by this 

16 Act to section 1332 of the Patient Protection and Afford17 able Care Act (42 U.S.C. 18052)— 

18 (1) with respect to applications for waivers 

19 under such section 1332 submitted after the date of 

20 enactment of this Act and applications for such 

21 waivers submitted prior to such date of enactment 

22 and under review by the Secretary on the date of en23 actment, shall take effect on the date of enactment 

24 of this Act; and 


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1 (2) with respect to applications for waivers ap2 proved under such section 1332 before the date of 

3 enactment of this Act, shall not require reconsider4 ation of whether such applications meet the require5 ments of such section 1332, except that, at the re6 quest of a State, the Secretary shall recalculate the 

7 amount of funding provided under subsection (a)(3) 

8 of such section. 

9 SEC. 231. ENROLLMENT PERIODS. 

10 (a) EXCHANGES.—Paragraph (7) of section 1311(c) 

11 of the Patient Protection and Affordable Care Act (42 

12 U.S.C. 18031(c)), as added by section 106, is amended 

13 by adding at the end the following new subparagraph: 

14 ‘‘(B) ENROLLMENTS OTHER THAN DURING

15 INITIAL, OPEN, AND SPECIAL ENROLLMENT PE16 RIODS.—Beginning with plan year 2021, an Ex17 change may provide for enrollments during pe18 riods in addition to open enrollment periods de19 scribed in subparagraph (A) or paragraph (6) 

20 and special enrollment periods described in 

21 paragraph (6).’’. 

22 (b) HEALTH PLANS.—Subpart I of part A of title 

23 XXVII of the Public Health Service Act is amended by 

24 adding at the end the following new section: 


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1 ‘‘SEC. 2710. ENROLLMENT OUTSIDE OF INITIAL, OPEN, AND 

2 SPECIAL ENROLLMENT PERIOD. 

3 ‘‘Beginning with plan year 2021, a group health plan 

4 and a health insurance issuer offering group or individual 

5 health insurance coverage may provide for enrollment in 

6 such plan or coverage during periods in addition to initial, 

7 open, or special enrollment periods. In the case that an 

8 individual enrolls in such plan or coverage during a period 

9 pursuant to the previous sentence, the plan or issuer may 

10 charge the individual a one-time enrollment fee.’’. 

11 SEC. 232. STATE-OPERATED EXCHANGES FLEXIBILITY FOR 

12 OPEN ENROLLMENT PERIODS. 

13 Section 1311(c) of the Patient Protection and Afford14 able Care Act (42 U.S.C. 18031(c)) is amended— 

15 (1) in paragraph (6), by striking ‘‘The Sec16 retary’’ and inserting ‘‘Subject to paragraph (7), the 

17 Secretary’’; and 

18 (2) by adding at the end the following new 

19 paragraph: 

20 ‘‘(7) FLEXIBILITY FOR ENROLLMENT PERI21 ODS.— 

22 ‘‘(A) STATE-OPERATED EXCHANGES OPEN

23 ENROLLMENT PERIODS.—In the case of an Ex24 change operated by a State, beginning with 

25 plan year 2021, the Exchange may provide for 

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1 ment period) every 12, 24, or 36 months, as de2 termined by the State.’’. 

3 SEC. 233. PROMOTING HEALTH PLANS THAT COVER INDI4 VIDUALS IN MORE THAN ONE STATE. 

5 There are appropriated, out of amounts in the Treas6 ury not otherwise appropriated, $10,000,000 to be made 

7 available by December 31, 2021, to the Center for Medi8 care & Medicaid Innovation to fund new research or pilot 

9 programs dedicated to pursuing viable methods of enroll10 ing individuals in health insurance programs that cross 

11 State lines. 

12 TITLE III—COMPETITION, 

13 TRANSPARENCY AND AC14 COUNTABILITY 

15 Subtitle A—Provider and Insurer 

16 Competition 

17 SEC. 301. HOSPITAL CONSOLIDATION. 

18 (a) AUTHORIZATION OF APPROPRIATIONS.—There is 

19 authorized to be appropriated $160,000,000 to the Fed20 eral Trade Commission to hire staff to investigate, as con21 sistent with the Sherman Antitrust Act and other relevant 

22 Federal laws, anti-competitive mergers and practices 

23 under such laws to the extent such mergers and practices 

24 relate to providers of inpatient and outpatient health care 


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1 services, as defined by the Secretary of Health and 

2 Human Services. 

3 (b) MEDICARE ADVANTAGE RATES APPLIED TO CER4 TAIN HHI HOSPITALS.— 

5 (1) IN GENERAL.—Section 1866(a) of the So6 cial Security Act (42 U.S.C. 1395cc(a)) is amend7 ed— 

8 (A) in paragraph (1)— 

9 (i) in subparagraph (X), by striking 

10 ‘‘and’’ at the end; 

11 (ii) in subparagraph (Y), by striking 

12 the period at the end and inserting ‘‘; 

13 and’’; and 

14 (iii) by inserting after subparagraph 

15 (Y) the following new subparagraph: 

16 ‘‘(Z) subject to paragraph (4), in the case 

17 of a hospital located in a county whose popu18 lation density is above the median population 

19 density for all counties in the United States 

20 with respect to which there is a Herfindahl21 Hirschman Index (HHI) of greater than 4,000, 

22 to apply the average reimbursement rate with 

23 respect to individuals (regardless of whether 

24 such an individual is entitled to or eligible for 

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1 uals eligible for medical assistance under a 

2 State plan under title XIX) furnished items and 

3 services at such hospital that would be billable 

4 under this title for such items and services if 

5 furnished by such hospital to an individual en6 rolled under part C.’’; and 

7 (B) by adding at the end the following new 

8 paragraph: 

9 ‘‘(4)(A) The requirement under paragraph 

10 (1)(Z) shall not apply in the case of a hospital in a 

11 hospital referral region if— 

12 ‘‘(i) the HRR market share of such hos13 pital (as determined under subparagraph (B)) 

14 is less than 0.15; or 

15 ‘‘(ii) the hospital is located in a rural area 

16 (as defined in section 1886(d)(2)(D)). 

17 ‘‘(B) For purposes of subparagraph (A), the 

18 HRR market share of a hospital in a hospital refer19 ral region is equal to— 

20 ‘‘(i) the total revenue of the hospital, di21 vided by 

22 ‘‘(ii) the total revenue of all hospitals in 

23 the hospital referral region.’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply with respect to items 

3 and services furnished on or after January 1, 2021. 

4 (c) GRANTS FOR HOSPITAL INFRASTRUCTURE IM5 PROVEMENT.— 

6 (1) IN GENERAL.—The Secretary of Health and 

7 Human Services shall carry out a grant program 

8 under which the Secretary shall provide grants to el9 igible States, in accordance with this subsection. 

10 (2) USES.—An eligible State receiving a grant 

11 under this subsection may use such grant to improve 

12 the State hospital infrastructure and to supplement 

13 any other funds provided for a purpose authorized 

14 under a State or local hospital grant program under 

15 State law. 

16 (3) ELIGIBILITY.— 

17 (A) IN GENERAL.—An eligible State may 

18 receive not more than one grant under this sub19 section with respect to each qualifying criterion 

20 described in subparagraph (B) that is met by 

21 the State. 

22 (B) ELIGIBLE STATE.—For purposes of 

23 this subsection, the term ‘‘eligible State’’ means 

24 a State that meets any one or more of the fol25 lowing qualifying criteria: 


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1 (i) The State does not have in effect 

2 any State certificate of need law that re3 quires a health care provider to provide to 

4 a regulatory body a certification that the 

5 community needs the services provided by 

6 the health care provider. 

7 (ii) The State has in effect State 

8 scope of practice laws that— 

9 (I) allow advanced practice pro10 viders (such as nurse practitioners, 

11 advanced practice registered nurses, 

12 clinical nurse specialists, and physi13 cian assistants) to evaluate patients; 

14 diagnose, order, and interpret diag15 nostic tests; and initiate and manage 

16 treatments; or 

17 (II) provide that the only jus18 tification for limiting the scope of 

19 practice of a health care provider is 

20 safety to the public. 

21 (iii) The State does not have in effect 

22 any State laws that require managed care 

23 plans to accept into the network of such 

24 plan any qualified provider who is willing 


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1 to accept the terms and conditions of the 

2 managed care plan. 

3 (iv) The State does not have in effect 

4 any Certificate of Public Advantage laws 

5 that clearly articulate the State’s intent to 

6 displace competition in favor of regulation 

7 or that violate State or Federal antitrust 

8 laws. 

9 (v) The State does not have in effect 

10 any network adequacy laws regulating a 

11 health plan’s ability to deliver benefits by 

12 providing reasonable access to a sufficient 

13 number of in-network primary care and 

14 specialty physicians, as well as all health 

15 care services included under the terms of 

16 an insuree’s contract with a health insurer. 

17 (4) FUNDING.—There is authorized to be ap18 propriated to carry out this subsection 

19 $1,000,000,000 for each of the fiscal years 2019 

20 through 2028. Funds appropriated under this para21 graph shall remain available until expended. 

22 (d) CRITICAL ACCESS HOSPITAL REIMBURSEMENT

23 RATES.— 

24 (1) PART A.—Section 1814(l)(1) of the Social 

25 Security Act (42 U.S.C. 1395f(l)(1)) is amended by 


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1 inserting ‘‘(or, for 2021, 102, plus 1 percentage 

2 point for each subsequent year through 2029, and 

3 110 for each subsequent year thereafter)’’ after 

4 ‘‘101’’. 

5 (2) PART B.—Section 1834(g)(1) of such Act 

6 (42 U.S.C. 1395m(g)(1)) is amended by inserting 

7 ‘‘(or, for 2021, 102, plus 1 percentage point for each 

8 subsequent year through 2029, and 110 for each 

9 subsequent year thereafter)’’ after ‘‘101’’. 

10 SEC. 302. AUTHORITY OF FEDERAL TRADE COMMISSION 

11 OVER CERTAIN TAX-EXEMPT ORGANIZA12 TIONS. 

13 Section 4 of the Federal Trade Commission Act (15 

14 U.S.C. 44) is amended, in the undesignated paragraph re15 lating to the definition of the term ‘‘Corporation’’— 

16 (1) by striking ‘‘, and any’’ and inserting ‘‘, 

17 any’’; and 

18 (2) by inserting before the period at the end the 

19 following: ‘‘, and any organization described in sec20 tion 501(c)(3) of the Internal Revenue Code of 1986 

21 that is exempt from taxation under section 501(a) of 

22 such Code’’. 


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1 SEC. 303. RESTORING THE APPLICATION OF ANTITRUST 

2 LAWS TO THE BUSINESS OF HEALTH INSUR3 ANCE. 

4 (a) AMENDMENT TO MCCARRAN-FERGUSON ACT.— 

5 Section 3 of the Act of March 9, 1945 (15 U.S.C. 1013), 

6 commonly known as the McCarran-Ferguson Act, is 

7 amended by adding at the end the following: 

8 ‘‘(c)(1) Nothing contained in this Act shall modify, 

9 impair, or supersede the operation of any of the antitrust 

10 laws with respect to the business of health insurance (in11 cluding the business of dental insurance and limited-scope 

12 dental benefits). 

13 ‘‘(2) Paragraph (1) shall not apply with respect to 

14 making a contract, or engaging in a combination or con15 spiracy— 

16 ‘‘(A) to collect, compile, or disseminate histor17 ical loss data; 

18 ‘‘(B) to determine a loss development factor ap19 plicable to historical loss data; 

20 ‘‘(C) to perform actuarial services if such con21 tract, combination, or conspiracy does not involve a 

22 restraint of trade; or 

23 ‘‘(D) to develop or disseminate a standard in24 surance policy form (including a standard addendum 

25 to an insurance policy form and standard termi26 nology in an insurance policy form) if such contract, 


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1 combination, or conspiracy is not to adhere to such 

2 standard form or require adherence to such standard 

3 form. 

4 ‘‘(3) For purposes of this subsection— 

5 ‘‘(A) the term ‘antitrust laws’ has the meaning 

6 given it in subsection (a) of the first section of the 

7 Clayton Act (15 U.S.C. 12), except that such term 

8 includes section 5 of the Federal Trade Commission 

9 Act (15 U.S.C. 45) to the extent that such section 

10 5 applies to unfair methods of competition; 

11 ‘‘(B) the term ‘business of health insurance (in12 cluding the business of dental insurance and limited13 scope dental benefits)’ does not include— 

14 ‘‘(i) the business of life insurance (includ15 ing annuities); or 

16 ‘‘(ii) the business of property or casualty 

17 insurance, including but not limited to— 

18 ‘‘(I) any insurance or benefits defined 

19 as ‘excepted benefits’ under paragraph (1), 

20 subparagraph (B) or (C) of paragraph (2), 

21 or paragraph (3) of section 9832(c) of the 

22 Internal Revenue Code of 1986 (26 U.S.C. 

23 9832(c)) whether offered separately or in 

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1 scribed in paragraph (2)(A) of such sec2 tion; and 

3 ‘‘(II) any other line of insurance that 

4 is classified as property or casualty insur5 ance under State law; 

6 ‘‘(C) the term ‘historical loss data’ means infor7 mation respecting claims paid, or reserves held for 

8 claims reported, by any person engaged in the busi9 ness of insurance; and 

10 ‘‘(D) the term ‘loss development factor’ means 

11 an adjustment to be made to reserves held for losses 

12 incurred for claims reported by any person engaged 

13 in the business of insurance, for the purpose of 

14 bringing such reserves to an ultimate paid basis.’’. 

15 (b) RELATED PROVISION.—For purposes of section 

16 5 of the Federal Trade Commission Act (15 U.S.C. 45) 

17 to the extent such section applies to unfair methods of 

18 competition, section 3(c) of the McCarran-Ferguson Act 

19 shall apply with respect to the business of health insurance 

20 without regard to whether such business is carried on for 

21 profit, notwithstanding the definition of ‘‘Corporation’’ 

22 contained in section 4 of the Federal Trade Commission 

23 Act. 


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1 SEC. 304. LEVELING THE PLAYING FIELD BETWEEN PAYERS 

2 AND PROVIDERS. 

3 (a) EXEMPTION.—It shall not be a violation of the 

4 antitrust laws for one or more private health insurer 

5 issuers or their designated agents to jointly negotiate 

6 prices of particular hospital services with a hospital pro7 vider with regards to the reimbursement policies of the 

8 insurers for those services. 

9 (b) DEFINITIONS.—For purposes of this section: 

10 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

11 laws’’ has the meaning given it in subsection (a) of 

12 the 1st section of the Clayton Act (15 U.S.C. 12(a)), 

13 except that such term includes section 5 of the Fed14 eral Trade Commission Act (15 U.S.C. 45) to the 

15 extent such section 5 applies to unfair methods of 

16 competition. 

17 (2) HEALTH INSURANCE ISSUER.—The term 

18 ‘‘health insurance issuer’’ means an insurance com19 pany, insurance service, or insurance organization 

20 (including a health maintenance organization, as de21 fined in subparagraph (C)) which is licensed to en22 gage in the business of insurance in a State and 

23 which is subject to State law which regulates insur24 ance (within the meaning of section 514(b)(2) of the 

25 Employee Retirement Income Security Act of 1974 


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1 (29 U.S.C. 1144(b)(2)). Such term does not include 

2 a group health plan. 

3 (3) HEALTH MAINTENANCE ORGANIZATION.— 

4 The term ‘‘health maintenance organization’’ 

5 means— 

6 (A) a Federally qualified health mainte7 nance organization (as defined in section 

8 300e(a) of title 42 of the United States Code), 

9 (B) an organization recognized under State 

10 law as a health maintenance organization, or 

11 (C) a similar organization regulated under 

12 State law for solvency in the same manner and 

13 to the same extent as such a health mainte14 nance organization. 

15 (c) EFFECTIVE DATE.—This section shall take effect 

16 on the date of the enactment of this Act but shall not 

17 apply with respect to conduct that occurs before such date. 

18 SEC. 305. INCREASING TRANSPARENCY BY REMOVING GAG 

19 CLAUSES ON PRICE AND QUALITY INFORMA20 TION. 

21 Subpart II of part A of title XXVII of the Public 

22 Health Service Act (42 U.S.C. 300gg–11 et seq.), as 

23 amended by the preceding sections, is amended by adding 

24 at the end the following: 


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1 ‘‘SEC. 2729B. INCREASING TRANSPARENCY BY REMOVING 

2 GAG CLAUSES ON PRICE AND QUALITY IN3 FORMATION. 

4 ‘‘(a) INCREASING PRICE AND QUALITY TRANS5 PARENCY FOR PLAN SPONSORS AND GROUP AND INDI6 VIDUAL MARKET AND CONSUMERS.— 

7 ‘‘(1) GROUP HEALTH PLANS.—A group health 

8 plan or health insurance issuer offering group health 

9 insurance coverage may not enter into an agreement 

10 with a health care provider, network or association 

11 of providers, third-party administrator, or other 

12 service provider offering access to a network of pro13 viders that would directly or indirectly restrict a 

14 group health plan or health insurance issuer from— 

15 ‘‘(A) providing provider-specific cost or 

16 quality of care information, through a consumer 

17 engagement tool or any other means, to refer18 ring providers, the plan sponsor, enrollees, or 

19 eligible enrollees of the plan or coverage; 

20 ‘‘(B) electronically accessing de-identified 

21 claims and encounter data for each enrollee in 

22 the plan or coverage, upon request and con23 sistent with the privacy regulations promul24 gated pursuant to section 264(c) of the Health 

25 Insurance Portability and Accountability Act, 

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1 netic Information Nondiscrimination Act of 

2 2008, and the Americans with Disabilities Act 

3 of 1990, with respect to the applicable health 

4 plan or health insurance coverage, including, on 

5 a per claim basis— 

6 ‘‘(i) financial information, such as the 

7 allowed amount, or any other claim-related 

8 financial obligations included in the pro9 vider contract; 

10 ‘‘(ii) provider information, including 

11 name and clinical designation; 

12 ‘‘(iii) service codes; or 

13 ‘‘(iv) any other data element normally 

14 included in claim or encounter transactions 

15 when received by a plan or issuer; or 

16 ‘‘(C) sharing data described in subpara17 graph (A) or (B) with a business associate as 

18 defined in section 160.103 of title 45, Code of 

19 Federal Regulations (or successor regulations), 

20 consistent with the privacy regulations promul21 gated pursuant to section 264(c) of the Health 

22 Insurance Portability and Accountability Act, 

23 the amendments to this Act made by the Ge24 netic Information Nondiscrimination Act of 


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1 2008, and the Americans with Disabilities Act 

2 of 1990. 

3 ‘‘(2) INDIVIDUAL HEALTH INSURANCE COV4 ERAGE.—A health insurance issuer offering indi5 vidual health insurance coverage may not enter into 

6 an agreement with a health care provider, network 

7 or association of providers, or other service provider 

8 offering access to a network of providers that would 

9 directly or indirectly restrict the health insurance 

10 issuer from— 

11 ‘‘(A) providing provider-specific price or 

12 quality of care information, through a consumer 

13 engagement tool or any other means, to refer14 ring providers, enrollees, or eligible enrollees of 

15 the plan or coverage; or 

16 ‘‘(B) sharing, for plan design, plan admin17 istration, and plan, financial, legal, and quality 

18 improvement activities, data described in sub19 paragraph (A) with a business associate as de20 fined in section 160.103 of title 45, Code of 

21 Federal Regulations (or successor regulations), 

22 consistent with the privacy regulations promul23 gated pursuant to section 264(c) of the Health 

24 Insurance Portability and Accountability Act, 

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1 netic Information Nondiscrimination Act of 

2 2008, and the Americans with Disabilities Act 

3 of 1990. 

4 ‘‘(3) CLARIFICATION REGARDING PUBLIC DIS5 CLOSURE OF INFORMATION.—Nothing in paragraph 

6 (1)(A) or (2)(A) prevents a health care provider, 

7 network or association of providers, or other service 

8 provider from placing reasonable restrictions on the 

9 public disclosure of the information described in 

10 such paragraphs (1) and (2). 

11 ‘‘(4) ATTESTATION.—A group health plan or a 

12 health insurance issuer offering group or individual 

13 health insurance coverage shall annually submit to, 

14 as applicable, the applicable authority described in 

15 section 2723 or the Secretary of Labor, an attesta16 tion that such plan or issuer is in compliance with 

17 the requirements of this subsection. 

18 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in 

19 this section shall be construed to otherwise limit 

20 group health plan, plan sponsor, or health insurance 

21 issuer access to data currently permitted under the 

22 privacy regulations promulgated pursuant to section 

23 264(c) of the Health Insurance Portability and Ac24 countability Act, the amendments to this Act made 

25 by the Genetic Information Nondiscrimination Act of 


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1 2008, and the Americans with Disabilities Act of 

2 1990.’’. 

3 SEC. 306. BANNING ANTICOMPETITIVE TERMS IN FACILITY 

4 AND INSURANCE CONTRACTS THAT LIMIT AC5 CESS TO HIGHER QUALITY, LOWER COST 

6 CARE. 

7 (a) IN GENERAL.—Section 2729B of the Public 

8 Health Service Act, as added by section 301, is amended 

9 by adding at the end the following: 

10 ‘‘(b) PROTECTING HEALTH PLANS NETWORK DE11 SIGN FLEXIBILITY.— 

12 ‘‘(1) IN GENERAL.—A group health plan or a 

13 health insurance issuer offering group or individual 

14 health insurance coverage shall not enter into an 

15 agreement with a provider, network or association of 

16 providers, or other service provider offering access to 

17 a network of service providers if such agreement, di18 rectly or indirectly— 

19 ‘‘(A) restricts the group health plan or 

20 health insurance issuer from— 

21 ‘‘(i) directing or steering enrollees to 

22 other health care providers; or 

23 ‘‘(ii) offering incentives to encourage 

24 enrollees to utilize specific health care pro25 viders; 


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1 ‘‘(B) requires the group health plan or 

2 health insurance issuer to enter into any addi3 tional contract with an affiliate of the provider, 

4 such as an affiliate of the provider, as a condi5 tion of entering into a contract with such pro6 vider; 

7 ‘‘(C) requires the group health plan or 

8 health insurance issuer to agree to payment 

9 rates or other terms for any affiliate not party 

10 to the contract of the provider involved; or 

11 ‘‘(D) restricts other group health plans or 

12 health insurance issuers not party to the con13 tract from paying a lower rate for items or 

14 services than the contracting plan or issuer 

15 pays for such items or services. 

16 ‘‘(2) ADDITIONAL REQUIREMENT FOR SELF-IN17 SURED PLANS.—A self-insured group health plan 

18 shall not enter into an agreement with a provider, 

19 network or association of providers, third-party ad20 ministrator, or other service provider offering access 

21 to a network of providers if such agreement directly 

22 or indirectly requires the group health plan to cer23 tify, attest, or otherwise confirm in writing that the 

24 group health plan is bound by restrictive contracting 

25 terms between the service provider and a third-party 


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1 administrator that the group health plan is not 

2 party to, without a disclosure that such terms exist. 

3 ‘‘(3) EXCEPTION FOR CERTAIN GROUP MODEL

4 ISSUERS.—Paragraph (1)(A) shall not apply to a 

5 group health plan or health insurance issuer offering 

6 group or individual health insurance coverage with 

7 respect to— 

8 ‘‘(A) a health maintenance organization 

9 (as defined in section 2791(b)(3)), if such 

10 health maintenance organization operates pri11 marily through exclusive contracts with multi12 specialty physician groups, nor to any arrange13 ment between such a health maintenance orga14 nization and its affiliates; or 

15 ‘‘(B) a value-based network arrangement, 

16 such as an exclusive provider network, account17 able care organization, center of excellence, a 

18 provider sponsored health insurance issuer that 

19 operates primarily through aligned multi-spe20 cialty physician group practices or integrated 

21 health systems, or such other similar network 

22 arrangements as determined by the Secretary 

23 through rulemaking. 

24 ‘‘(4) ATTESTATION.—A group health plan or 

25 health insurance issuer offering group or individual 


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1 health insurance coverage shall annually submit to, 

2 as applicable, the applicable authority described in 

3 section 2723 or the Secretary of Labor, an attesta4 tion that such plan or issuer is in compliance with 

5 the requirements of this subsection. 

6 ‘‘(c) MAINTENANCE OF EXISTING HIPAA, GINA, 

7 AND ADA PROTECTIONS.—Nothing in this section shall 

8 modify, reduce, or eliminate the existing privacy protec9 tions and standards provided by reason of State and Fed10 eral law, including the requirements of parts 160 and 164 

11 of title 45, Code of Federal Regulations (or any successor 

12 regulations). 

13 ‘‘(d) REGULATIONS.—The Secretary, not later than 

14 1 year after the date of enactment of the Fair Care Act 

15 of 2020, shall promulgate regulations to carry out this sec16 tion. 

17 ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec18 tion shall be construed to limit network design or cost or 

19 quality initiatives by a group health plan or health insur20 ance issuer, including accountable care organizations, ex21 clusive provider organizations, networks that tier providers 

22 by cost or quality or steer enrollees to centers of excel23 lence, or other pay-for-performance programs. 

24 ‘‘(f) CLARIFICATION WITH RESPECT TO ANTITRUST

25 LAWS.—Compliance with this section does not constitute 


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1 compliance with the antitrust laws, as defined in sub2 section (a) of the first section of the Clayton Act (15 

3 U.S.C. 12(a)).’’. 

4 (b) EFFECTIVE DATE.—Section 2729B of the Public 

5 Health Service Act (as added by section 301 and amended 

6 by subsection (a)) shall apply with respect to any contract 

7 entered into on or after the date that is 18 months after 

8 the date of enactment of this Act. With respect to an ap9 plicable contract that is in effect on the date of enactment 

10 of this Act, such section 2729B shall apply on the earlier 

11 of the date of renewal of such contract or 3 years after 

12 such date of enactment. 

13 SEC. 307. REPEALING ELIGIBILITY OF CERTAIN ACOS. 

14 (a) IN GENERAL.—Section 1899(b)(1) of the Social 

15 Security Act (42 U.S.C. 1395jjj(b)(1)) is amended by 

16 striking subparagraphs (C) through (E). 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 subsection (a) shall take effect on January 1, 2021. 

19 SEC. 308. REPEAL OF HEALTH CARE REFORM PROVISIONS 

20 LIMITING MEDICARE EXCEPTION TO THE 

21 PROHIBITION ON CERTAIN PHYSICIAN RE22 FERRALS FOR HOSPITALS. 

23 Sections 6001 and 10601 of the Patient Protection 

24 and Affordable Care Act (Public Law 111–148; 124 Stat. 

25 684, 1005) and section 1106 of the Health Care and EduVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00213 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 cation Reconciliation Act of 2010 (Public Law 111–152; 

2 124 Stat. 1049) are repealed and the provisions of law 

3 amended by such sections are restored as if such sections 

4 had never been enacted. 

5 SEC. 309. ALTERNATIVE PAYMENT MODEL FOR CERTAIN 

6 SHOPPABLE PROCEDURES. 

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

8 insurance issuer offering group or individual health insur9 ance coverage (as such terms are defined in section 2791 

10 of the Public Health Service Act (42 U.S.C. 300gg–91)) 

11 may elect, with respect to a plan year, to provide a set 

12 payment amount to an enrollee under such plan or cov13 erage for certain shoppable procedures (as defined in sub14 section (b)) in accordance with the provisions of this sec15 tion in lieu of otherwise providing coverage for such a pro16 cedure under such plan or coverage, but only if the en17 rollee so agrees to such set payment amount. 

18 (b) DEFINITION.—For purposes of this section, the 

19 term ‘‘shoppable procedure’’ means a procedure specified 

20 by the Secretary of Health and Human Services (in this 

21 section referred to as the ‘‘Secretary’’) with respect to 

22 which individuals may be expected to compare prices for 

23 such procedure of health care providers and facilities, in24 cluding primary and preventive services, prenatal care and 


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1 childbirth, common surgeries that can be scheduled, and 

2 other similar services. 

3 (c) SET PAYMENT RULES.—A set payment described 

4 in subsection (a) under a group health plan or group or 

5 individual health insurance coverage offered by a health 

6 insurance issuer shall— 

7 (1) be disclosed prior to beginning of each plan 

8 year such payment is in effect and shall not vary 

9 during such plan year; 

10 (2) be the same amount with respect to the 

11 same shoppable procedure furnished in a geographic 

12 area (as defined by the Secretary); 

13 (3) not be less than the median negotiated rate 

14 for all group health plans and health insurance cov15 erage offered in such area for such procedure; 

16 (4) be made available to an enrolled under such 

17 plan or such coverage regardless of the provider or 

18 facility furnishing the shoppable procedure; 

19 (5) represent the entirety of the payment obli20 gation of such plan or such issuer with respect to 

21 such procedure; and 

22 (6) may be retained by such enrollee to the ex23 tent that the amount of such payment exceeds the 

24 amount charged by such provider or facility for such 

25 procedure. 


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1 (d) PROVISION OF PRICE INFORMATION.—Each 

2 health care provider and facility that may furnish a 

3 shoppable procedure during a year shall post in a public 

4 area a notice containing the prices that will be charged 

5 by such provider of facility with respect to each such pro6 cedure to individuals making payment for such services 

7 pursuant to a set payment amount described in subsection 

8 (a). 

9 (e) EHB WAIVER AUTHORITY.—The Secretary may 

10 waive such provisions of section 1302(b) of the Patient 

11 Protection and Affordable Care Act (42 U.S.C. 18022(b)) 

12 with respect to a group health plan, health insurance 

13 issuer offering group or individual health insurance cov14 erage, and a plan year as the Secretary determines nec15 essary to allow for the provision of set payment amounts 

16 described in subsection (a). 

17 Subtitle B—Price Transparency 

18 SEC. 321. PRICE TRANSPARENCY. 

19 Section 1866 of the Social Security Act (42 U.S.C. 

20 1395cc), as amended by section 301, is further amended— 

21 (1) in subsection (a)(1)— 

22 (A) in subparagraph (Y), by striking 

23 ‘‘and’’ at the end; 

24 (B) in subparagraph (Z), by striking the 

25 period at the end and inserting ‘‘; and’’; and 


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1 (C) by inserting after subparagraph (Z) 

2 the following new subparagraph: 

3 ‘‘(AA) in the case of a hospital, to comply with 

4 the requirement under subsection (l).’’; and 

5 (2) by adding at the end the following new sub6 section: 

7 ‘‘(l) REQUIREMENT RELATING TO PUBLISHING CER8 TAIN HOSPITAL PRICES.— 

9 ‘‘(1) IN GENERAL.—For purposes of subsection 

10 (a)(1)(AA), the requirement described in this sub11 section is, with respect to a hospital and year (begin12 ning with 2021), for the hospital to publicly post, 

13 through the system established under paragraph (3), 

14 for each common shoppable service included in the 

15 list published under paragraph (2) for such year, the 

16 volume-weighted average price charged by the hos17 pital to— 

18 ‘‘(A) individuals enrolled during such year 

19 in group health plans or health insurance cov20 erage offered in the individual or group market 

21 (as such terms are defined in section 2791 of 

22 the Public Health Service Act); and 

23 ‘‘(B) individuals who are not enrolled in 

24 any health insurance coverage or health benefits 

25 plan and individuals who are enrolled in such 


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1 coverage or plan but such coverage or plan does 

2 not provide benefits for the service. 

3 ‘‘(2) COMMON SHOPPABLE SERVICES.—For 

4 purposes of subsection (a)(1)(AA) and this sub5 section, the Secretary shall, for 2021 and each sub6 sequent year, publish a list of the 100 common 

7 shoppable services that are the most highly utilized 

8 in a hospital-based setting. 

9 ‘‘(3) STANDARDIZED DIGITAL REPORTING SYS10 TEM.—Not later than January 1, 2021, the Sec11 retary shall establish a standardized digital system 

12 for purposes of paragraph (1).’’. 

13 SEC. 322. PRICE TRANSPARENCY REQUIREMENTS. 

14 (a) HOSPITALS.—Section 2718(e) of the Public 

15 Health Service Act (42 U.S.C. 300gg–18(e)) is amend16 ed— 

17 (1) by striking ‘‘Each hospital’’ and inserting 

18 the following: 

19 ‘‘(1) IN GENERAL.—Each hospital’’; 

20 (2) by inserting ‘‘, in a machine-readable for21 mat, via open application program interfaces 

22 (APIs)’’ after ‘‘a list’’; 

23 (3) by inserting ‘‘, along with such additional 

24 information as the Secretary may require with re25 spect to such charges for purposes of promoting 


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1 public awareness of hospital pricing in advance of 

2 receiving a hospital item or service’’ before the pe3 riod; and 

4 (4) by adding at the end the following: 

5 ‘‘(2) DEFINITION OF STANDARD CHARGES.— 

6 Notwithstanding any other provision of law, for pur7 poses of paragraph (1), the term ‘standard charges’ 

8 means the rates hospitals, including providers or en9 tities that contract with or practice at a hospital, 

10 charge for all items and services at a minimum, 

11 chargemaster rates, rates that hospitals negotiate 

12 with third party payers across all plans, including 

13 those related to a patient’s specific plan, discounted 

14 cash prices, and other rates determined by the Sec15 retary. 

16 ‘‘(3) ENFORCEMENT.—In addition to any other 

17 enforcement actions or penalties that may apply 

18 under subsection (b)(3) or another provision of law, 

19 a hospital that fails to provide the information re20 quired by this subsection and has not completed a 

21 corrective action plan to comply with the require22 ments of such subsection shall be subject to a civil 

23 monetary penalty of an amount not to exceed $300 

24 per day that the violation is ongoing as determined 

25 by the Secretary. Such penalty shall be imposed and 


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1 collected in the same manner as civil money pen2 alties under subsection (a) of section 1128A of the 

3 Social Security Act are imposed and collected.’’. 

4 (b) TRANSPARENCY IN COVERAGE.—Section 

5 1311(e)(3) of the Patient Protection and Affordable Care 

6 Act (42 U.S.C. 18031(e)(3)) is amended— 

7 (1) in subparagraph (A)— 

8 (A) in clause (vii), by inserting before the 

9 period the following: ‘‘, including, for all items 

10 and services covered under the plan, aggregate 

11 information on specific payments the plan has 

12 made to out-of-network health care providers on 

13 behalf of plan enrollees’’; 

14 (B) by designating clause (ix) as clause 

15 (x); and 

16 (C) by inserting after clause (viii), the fol17 lowing: 

18 ‘‘(ix) Information on the specific nego19 tiated payment rates between the plan and 

20 health care providers for all items and 

21 services covered under the plan.’’; 

22 (2) in subparagraph (B)— 

23 (A) in the heading, by striking ‘‘USE’’ and 

24 inserting ‘‘DELIVERY METHODS AND USE’’; 


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1 (B) by inserting ‘‘, as applicable,’’ after 

2 ‘‘English proficiency’’; and 

3 (C) by inserting after the second sentence, 

4 the following: ‘‘The Secretary shall establish 

5 standards for electronic delivery and access to 

6 such information by individuals, free of charge, 

7 in machine readable format, through an Inter8 net website and via open APIs.’’; 

9 (3) in subparagraph (C)— 

10 (A) in the first sentence, by inserting ‘‘or 

11 out-of-network provider’’ after ‘‘item or service 

12 by a participating provider’’; 

13 (B) in the second sentence, by striking 

14 ‘‘through an Internet website’’ and inserting 

15 ‘‘free of charge, in machine readable format, 

16 through an Internet website, and via open 

17 APIs, in accordance with standards established 

18 by the Secretary,’’; and 

19 (C) by adding at the end the following: 

20 ‘‘Such information shall include specific nego21 tiated rates that allow for comparison between 

22 providers and across plans, and related to a pa23 tient’s specific plan, including after an enrollee 

24 has exceeded their deductible responsibility.’’; 

25 and 


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1 (4) in subparagraph (D) by striking ‘‘subpara2 graph (A)’’ and inserting ‘‘subparagraphs (A), (B), 

3 and (C)’’. 

4 SEC. 323. DESIGNATION OF NONGOVERNMENTAL, NON5 PROFIT TRANSPARENCY ORGANIZATIONS TO 

6 LOWER AMERICANS’ HEALTH CARE COSTS. 

7 (a) IN GENERAL.—Subpart C of title XXVII of the 

8 Public Health Service Act (42 U.S.C. 300gg–91 et seq.), 

9 as amended by the preceding sections, is further amended 

10 by adding at the end the following: 

11 ‘‘SEC. 2796. DESIGNATION OF A NONGOVERNMENTAL, NON12 PROFIT TRANSPARENCY ORGANIZATION TO 

13 LOWER AMERICANS’ HEALTH CARE COSTS. 

14 ‘‘(a) IN GENERAL.—The Secretary, in consultation 

15 with the Secretary of Labor, not later than 1 year after 

16 the date of enactment of the Fair Care Act of 2020, shall 

17 enter into contracts with at least 2 nonprofit entities to 

18 support the establishment and maintenance of a database 

19 that receives and utilizes health care claims information 

20 and related information and issues reports that are avail21 able to the public and authorized users, and are submitted 

22 to the Department of Health and Human Services. 

23 ‘‘(b) REQUIREMENTS.— 

24 ‘‘(1) IN GENERAL.—The database established 

25 under subsection (a) shall— 


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1 ‘‘(A) improve transparency by using de2 identified health care data to— 

3 ‘‘(i) inform patients about the cost, 

4 quality, and value of their care; 

5 ‘‘(ii) assist providers and hospitals, as 

6 they work with patients, to make informed 

7 choices about care; 

8 ‘‘(iii) enable providers, hospitals, and 

9 communities to improve services and out10 comes for patients by benchmarking their 

11 performance against that of other pro12 viders, hospitals, and communities; 

13 ‘‘(iv) enable purchasers, including em14 ployers, employee organizations, and health 

15 plans, to develop value-based purchasing 

16 models, improve quality, and reduce the 

17 cost of health care and insurance coverage 

18 for enrollees; 

19 ‘‘(v) enable employers and employee 

20 organizations to evaluate network design 

21 and construction, and the cost of care for 

22 enrollees; 

23 ‘‘(vi) facilitate State-led initiatives to 

24 lower health care costs and improve qual25 ity; and 


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1 ‘‘(vii) promote competition based on 

2 quality and cost; 

3 ‘‘(B) collect medical claims, prescription 

4 drug claims, and remittance data consistent 

5 with the protections and requirements of sub6 section (d); 

7 ‘‘(C) be established in such a manner that 

8 allows the data collected pursuant to subpara9 graph (B) to be shared with any State all-payer 

10 claims database or regional database operated 

11 with authorization from States, at cost, using a 

12 standardized format, if such State or regional 

13 database also submits claims data to the data14 base established under this section; and 

15 ‘‘(D) be available to— 

16 ‘‘(i) the Director of the Congressional 

17 Budget Office, the Comptroller General of 

18 the United States, the Executive Director 

19 of the Medicare Payment Advisory Com20 mission, and the Executive Director of the 

21 Medicaid and CHIP Payment Advisory 

22 Commission, upon request, subject to the 

23 privacy and security requirements of au24 thorized users under subsection (e)(2); and 


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1 ‘‘(ii) authorized users, including em2 ployers, employee organizations, providers, 

3 group health plans, health insurance 

4 issuers, researchers, and policymakers, 

5 subject to subsection (e). 

6 ‘‘(2) PRIVACY AND SECURITY; BREACH NOTIFI7 CATIONS.— 

8 ‘‘(A) REGULATIONS.— 

9 ‘‘(i) IN GENERAL.—The Secretary 

10 shall issue regulations prescribing the ex11 tent to which, and the manner in which, 

12 the following rules (and any successors of 

13 such rules) shall apply to the activities 

14 under this section of an entity receiving a 

15 contract under subsection (a): 

16 ‘‘(I) The Privacy Rule under part 

17 160 and subparts A and E of part 

18 164 of title 45, Code of Federal Regu19 lations (or any successor regulations). 

20 ‘‘(II) The Security Rule under 

21 part 160 and subparts A and C of 

22 part 164 of such title 45 (or any suc23 cessor regulations). 

24 ‘‘(III) The Breach Notification 

25 Rule under part 160 and subparts A 


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1 and D of part 164 of such title 45 (or 

2 any successor regulations). 

3 ‘‘(ii) SUPPLEMENTAL REGULA4 TIONS.—In order to ensure data privacy 

5 and security and the notification of 

6 breaches, the Secretary may issue such 

7 supplemental regulations on the subjects of 

8 the rules listed under clause (i) as the Sec9 retary determines appropriate to address 

10 differences between the activities described 

11 by this section and the activities covered by 

12 such rules. 

13 ‘‘(B) ENFORCEMENT.—Section 1176 of 

14 Social Security Act shall apply with respect to 

15 a violation of this paragraph in the same man16 ner such section 1176 applies to a violation of 

17 part C of title XI of the Social Security Act, 

18 and the Secretary may include in the regula19 tions promulgated under this section provisions 

20 to apply such section to this paragraph. 

21 ‘‘(C) PROCEDURE.— 

22 ‘‘(i) TIMING.—The Secretary shall 

23 issue the initial set of regulations under 

24 this paragraph not later than 1 year after 


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1 the date of enactment of the Fair Care Act 

2 of 2020. 

3 ‘‘(ii) AUTHORITY TO USE INTERIM

4 FINAL PROCEDURES.—The Secretary may 

5 make such initial set of regulations effec6 tive and final immediately upon issuance, 

7 on an interim basis, and provide for a pe8 riod of public comment on such initial set 

9 of regulations after the date of publication. 

10 ‘‘(D) REQUIREMENTS OF ENTITY.—An en11 tity receiving the contract under this section 

12 shall— 

13 ‘‘(i) not disclose to the public any in14 dividually identifiable health information or 

15 proprietary financial information; 

16 ‘‘(ii) strictly limit staff access to the 

17 data to staff with appropriate training, 

18 clearance, and background checks and re19 quire regular privacy and security training; 

20 ‘‘(iii) maintain effective security 

21 standards for transferring data or making 

22 data available to authorized users; 

23 ‘‘(iv) develop a process for providing 

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1 cure manner that maintains privacy and 

2 confidentiality of data; and 

3 ‘‘(v) adhere to current best security 

4 practices with respect to the management 

5 and use of such data for health services re6 search, in accordance with applicable Fed7 eral privacy law. 

8 ‘‘(3) CONSULTATION.— 

9 ‘‘(A) ADVISORY COMMITTEE.—Not later 

10 than 180 days after the date of enactment of 

11 the Fair Care Act of 2020, the Secretary shall 

12 convene an Advisory Committee (referred to in 

13 this section as the ‘Committee’), consisting of 

14 13 members, to advise the Secretary, a con15 tracting entity, and Congress on the establish16 ment, operations, and use of the database es17 tablished under this section. 

18 ‘‘(B) MEMBERSHIP.— 

19 ‘‘(i) APPOINTMENT.—In accordance 

20 with clause (ii), the Secretary, in consulta21 tion with the Secretary of Labor and the 

22 Comptroller General of the United States 

23 shall, not later than 180 days after the 

24 date of enactment of the Fair Care Act of 

25 2020, appoint members to the Committee 


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1 who have distinguished themselves in the 

2 fields of health services research, health ec3 onomics, health informatics, or the govern4 ance of State all-payer claims databases, or 

5 who represent organizations likely to sub6 mit data to or use the database, including 

7 patients, employers, or employee organiza8 tions that sponsor group health plans, 

9 health care providers, health insurance 

10 issuers, or third-party administrators of 

11 group health plans. Such members shall 

12 serve 3-year terms on a staggered basis. 

13 Vacancies on the Committee shall be filled 

14 by appointment consistent with this sub15 section not later than 3 months after the 

16 vacancy arises. 

17 ‘‘(ii) COMPOSITION.—In accordance 

18 with clause (i)— 

19 ‘‘(I) the Secretary, in consulta20 tion with the Secretary of Labor, shall 

21 appoint to the Committee— 

22 ‘‘(aa) 1 member selected by 

23 the Secretary, in coordination 

24 with the Secretary of Labor, to 


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1 serve as the chair of the Com2 mittee; 

3 ‘‘(bb) the Assistant Sec4 retary for Planning and Evalua5 tion of the Department of Health 

6 and Human Services, or a des7 ignee of such Assistant Sec8 retary; 

9 ‘‘(cc) 1 representative of the 

10 Centers for Medicare & Medicaid 

11 Services; 

12 ‘‘(dd) 1 representative of the 

13 Agency for Health Research and 

14 Quality; 

15 ‘‘(ee) 1 representative of the 

16 Office for Civil Rights of the De17 partment of Health and Human 

18 Services with expertise in data 

19 privacy and security; 

20 ‘‘(ff) 1 representative of the 

21 National Center for Health Sta22 tistics; and 

23 ‘‘(gg) 1 representative of the 

24 Employee Benefits and Security 


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1 Administration of the Depart2 ment of Labor; and 

3 ‘‘(II) the Comptroller General of 

4 the United States shall appoint to the 

5 Committee— 

6 ‘‘(aa) 1 representative of an 

7 employer that sponsors a group 

8 health plan; 

9 ‘‘(bb) 1 representative of an 

10 employee organization that spon11 sors a group health plan; 

12 ‘‘(cc) 1 academic researcher 

13 with expertise in health econom14 ics or health services research; 

15 ‘‘(dd) 1 consumer advocate; 

16 and 

17 ‘‘(ee) 2 additional members. 

18 ‘‘(C) DUTIES.—The Committee shall— 

19 ‘‘(i) advise the Secretary on the man20 agement of the contract under subsection 

21 (a); 

22 ‘‘(ii) assist and advise the entities re23 ceiving the contract under subsection (a) in 

24 establishing— 


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1 ‘‘(I) the scope and format of the 

2 data to be submitted under subsection 

3 (d); 

4 ‘‘(II) best practices with respect 

5 to de-identification of data, as appro6 priate; 

7 ‘‘(III) the appropriate uses of 

8 data by authorized users, including 

9 developing standards for the approval 

10 of requests by organizations to access 

11 and use the data; and 

12 ‘‘(IV) the appropriate formats 

13 and methods for making reports and 

14 analyses based on the database to the 

15 public; 

16 ‘‘(iii) conduct an annual review of 

17 whether data was used according to the 

18 appropriate uses as described in clause 

19 (ii)(II), and advise the designated entities 

20 on using the data for authorized purposes; 

21 ‘‘(iv) report, as appropriate, to the 

22 Secretary and Congress on the operation of 

23 the database and opportunities to better 

24 achieve the objectives of this section; 


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1 ‘‘(v) establish additional restrictions 

2 on researchers who receive compensation 

3 from entities described in subsection 

4 (e)(2)(B)(ii), in order to protect propri5 etary financial information; and 

6 ‘‘(vi) establish objectives for research 

7 and public reporting. 

8 ‘‘(4) STATE REQUIREMENTS.—A State may re9 quire health insurance issuers and other payers to 

10 submit claims data to the database established 

11 under this section, provided that such data is sub12 mitted to the entities awarded contracts under this 

13 section in a form and manner established by the 

14 Secretary, and pursuant to subsection (d)(4)(B). 

15 ‘‘(5) SANCTIONS.—The Secretary shall take ap16 propriate action to sanction users who attempt to re17 identify data accessed pursuant to paragraph 

18 (1)(D). 

19 ‘‘(c) CONTRACT REQUIREMENTS.— 

20 ‘‘(1) COMPETITIVE PROCEDURES.—The Sec21 retary shall enter into the contract under subsection 

22 (a) using full and open competition procedures pur23 suant to chapter 33 of title 41, United States Code. 


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1 ‘‘(2) ELIGIBLE ENTITIES.—To be eligible to 

2 enter into a contract described in subsection (a), an 

3 entity shall— 

4 ‘‘(A) be a private nonprofit entity governed 

5 by a board that includes representatives of the 

6 academic research community and individuals 

7 with expertise in employer-sponsored insurance, 

8 research using health care claims data and ac9 tuarial analysis; 

10 ‘‘(B) conduct its business in an open and 

11 transparent manner that provides the oppor12 tunity for public comment on its activities; and 

13 ‘‘(C) agree to comply with any require14 ments imposed under the rulemaking described 

15 in subsection (d)(4)(A). 

16 ‘‘(3) CONSIDERATIONS.—In awarding a con17 tract under subsection (a), the Secretary shall con18 sider an entity’s experience in— 

19 ‘‘(A) health care claims data collection, ag20 gregation, quality assurance, analysis, and secu21 rity; 

22 ‘‘(B) supporting academic research on 

23 health costs, spending, and utilization for and 

24 by privately insured patients; 


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1 ‘‘(C) working with large health insurance 

2 issuers and third-party administrators to as3 semble a national claims database; 

4 ‘‘(D) effectively collaborating with and en5 gaging stakeholders to develop reports; 

6 ‘‘(E) meeting budgets and timelines, in7 cluding in connection with report generation; 

8 and 

9 ‘‘(F) facilitating the creation of, or sup10 porting, State all-payer claims databases. 

11 ‘‘(4) CONTRACT TERM.—A contract awarded 

12 under this section shall be for a period of 5 years, 

13 and may be renewed after a subsequent competitive 

14 bidding process under this section. 

15 ‘‘(5) TRANSITION OF CONTRACT.—If the Sec16 retary, following a competitive process at the end of 

17 the contract period, selects a new entity to maintain 

18 the database, all data shall be transferred to the new 

19 entity according to a schedule and process to be de20 termined by the Secretary. Upon termination of a 

21 contract, no entity may keep data held by the data22 base or disclose such data to any entity other than 

23 the entity so designated by the Secretary. The Sec24 retary shall include enforcement terms in any con25 tract with an organization chosen under this section, 


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1 to ensure the timely transfer of all data, and any as2 sociated code or algorithms, to a new entity in the 

3 event of contract termination. 

4 ‘‘(d) RECEIVING HEALTH INFORMATION.— 

5 ‘‘(1) REQUIREMENTS.— 

6 ‘‘(A) IN GENERAL.—The Secretary of 

7 Labor shall ensure that the applicable self-in8 sured group health plan, through its third-party 

9 administrator, pharmacy benefit manager, or 

10 other entity designated by the group health 

11 plan, as applicable, electronically submits all 

12 claims data with respect to the plan, pursuant 

13 to subparagraph (B). 

14 ‘‘(B) SCOPE OF INFORMATION AND FOR15 MAT OF SUBMISSION.—An entity awarded the 

16 contract under subsection (a), in consultation 

17 with the Committee described in subsection 

18 (b)(3), and pursuant to the privacy and security 

19 requirements of subsection (b)(2), shall— 

20 ‘‘(i) specify the data elements required 

21 to be submitted under subparagraph (A), 

22 which shall include all data related to 

23 transactions described in subparagraphs 

24 (A) and (E) of section 1173(a)(2) of the 

25 Social Security Act, including all data eleVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00236 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 ments normally present in such trans2 actions when adjudicated, and enrollment 

3 information; 

4 ‘‘(ii) specify the form and manner for 

5 such submissions, and the historical period 

6 to be included in the initial submission; 

7 and 

8 ‘‘(iii) offer an automated submission 

9 option to minimize administrative burdens 

10 for entities required to submit data. 

11 ‘‘(C) DE-IDENTIFICATION OF DATA.—An 

12 entity awarded the contract under subsection 

13 (a) shall— 

14 ‘‘(i) establish a process under which 

15 data is de-identified consistent with the de16 identification requirements under section 

17 164.514 of title 45, Code of Federal Regu18 lations (or any successor regulations), 

19 while retaining the ability to link data lon20 gitudinally for the purposes of research on 

21 cost and quality, and the ability to com22 plete risk adjustment and geographic anal23 ysis; 

24 ‘‘(ii) ensure that any third-party sub25 contractors who perform the de-identificaVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00237 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 tion process described in clause (i) retain 

2 only the minimum necessary information 

3 to perform such a process, and adhere to 

4 effective security and encryption practices 

5 in data storage and transmission; 

6 ‘‘(iii) store claims and other data col7 lected under this subsection only in de8 identified form, in accordance with section 

9 164.514 of title 45, Code of Federal Regu10 lations (or any successor regulations); and 

11 ‘‘(iv) ensure that individually identifi12 able data is encrypted, in accordance with 

13 guidance issued by the Secretary under 

14 section 13402(h)(2) of the HITECH Act. 

15 ‘‘(2) APPLICABLE SELF-INSURED GROUP

16 HEALTH PLAN.—For purposes of paragraph (1), a 

17 self-insured group health plan is an applicable self18 insured group health plan if such plan is self-admin19 istered, or is administered by a third-party plan ad20 ministrator that meets 1 or both of the following cri21 teria: 

22 ‘‘(A) Administers health, medical, or phar23 macy benefits for more than 50,000 enrollees. 

24 ‘‘(B) Is one of the 5 largest administrators 

25 or issuers of self-insured group health plans in 


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1 a State in which such administrator operates, 

2 as measured by the aggregate number of enroll3 ees in plans administered by such administrator 

4 in such State, as determined by the Secretary. 

5 ‘‘(3) THIRD-PARTY ADMINISTRATORS.—In the 

6 case of a third-party administrator that is required 

7 under this subsection to submit claims data with re8 spect to an applicable self-insured group health plan, 

9 such administrator shall submit claims data with re10 spect to all self-insured group health plans that the 

11 administrator administers, including such plans that 

12 are not applicable self-insured group health plans, as 

13 described in paragraph (2). 

14 ‘‘(4) RECEIVING OTHER INFORMATION.— 

15 ‘‘(A) MEDICARE DATA.—The Secretary, 

16 through rulemaking, shall ensure that the data 

17 made available to such entity is available to 

18 qualified entities under section 1874(e) of the 

19 Social Security Act is made available to each 

20 entity awarded a contract under subsection (a). 

21 ‘‘(B) STATE DATA.—An entity awarded a 

22 contract under subsection (a) shall collect data 

23 from State all payer claims databases that seek 

24 access to the database established under this 

25 section. 


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1 ‘‘(5) AVAILABILITY OF DATA.—An entity re2 quired to submit data under this subsection may not 

3 place any restrictions on the use of such data by au4 thorized users. 

5 ‘‘(e) USES OF INFORMATION.— 

6 ‘‘(1) IN GENERAL.—An entity awarded a con7 tract under subsection (a) shall make the database 

8 available to users who are authorized under this sub9 section, at cost, and reports and analyses based on 

10 the data available to the public with no charge. 

11 ‘‘(2) AUTHORIZATION OF USERS.— 

12 ‘‘(A) IN GENERAL.—An entity may request 

13 authorization by an entity awarded a contract 

14 under subsection (a) for access to the database 

15 in accordance with this paragraph. 

16 ‘‘(B) APPLICATION.—An entity desiring 

17 authorization under this paragraph shall submit 

18 to an entity awarded a contract an application 

19 for such access, which shall include— 

20 ‘‘(i) in the case of an entity requesting 

21 access for research purposes— 

22 ‘‘(I) a description of the uses and 

23 methodologies for evaluating health 

24 system performance using such data; 

25 and 


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1 ‘‘(II) documentation of approval 

2 of the research by an institutional re3 view board, if applicable for a par4 ticular plan of research; or 

5 ‘‘(ii) in the case of an entity such as 

6 an employer, health insurance issuer, 

7 third-party administrator, or health care 

8 provider, requesting access for the purpose 

9 of quality improvement or cost-contain10 ment, a description of the intended uses 

11 for such data. 

12 ‘‘(C) REQUIREMENTS.— 

13 ‘‘(i) RESEARCH.—Upon approval of 

14 an application for research purposes under 

15 subparagraph (B)(i), the authorized user 

16 shall enter into a data use and confiden17 tiality agreement with an entity awarded a 

18 contract under subsection (a), which shall 

19 include a prohibition on attempts to re20 identify and disclose individually identifi21 able health information and proprietary fi22 nancial information. 

23 ‘‘(ii) QUALITY IMPROVEMENT AND

24 COST-CONTAINMENT.—In consultation with 

25 the Committee described in subsection 


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1 (b)(3), the Secretary shall, through rule2 making, establish the form and manner in 

3 which authorized users described in sub4 paragraph (B)(ii) may access data. Data 

5 provided to such authorized users shall be 

6 provided in a form and manner such that 

7 users may not obtain individually identifi8 able price information with respect to di9 rect competitors. Upon approval, such au10 thorized user shall enter into a data use 

11 and confidentiality agreement with the en12 tity. 

13 ‘‘(iii) CUSTOMIZED REPORTS.—Em14 ployers and employer organizations may 

15 request customized reports from an entity 

16 awarded a contract under subsection (a), 

17 at cost, subject to the requirements of this 

18 section with respect to privacy, security, 

19 and proprietary financial information. 

20 ‘‘(iv) NON-CUSTOMIZED REPORTS.— 

21 An entity awarded a contract under sub22 section (a), in consultation with the Com23 mittee, shall make available to all author24 ized users aggregate data sets, free of 

25 charge. 


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1 ‘‘(f) FUNDING.— 

2 ‘‘(1) INITIAL FUNDING.—There are authorized 

3 to be appropriated, and there are appropriated, out 

4 of monies in the Treasury not otherwise appro5 priated, $20,000,000 for fiscal year 2020, for the 

6 implementation of the initial contract and establish7 ment of the database under this section. 

8 ‘‘(2) ONGOING FUNDING.—There are author9 ized to be appropriated $15,000,000 for each of fis10 cal years 2021 through 2025, for purposes of car11 rying out this section (other than the grant program 

12 under subsection (h)). 

13 ‘‘(g) ANNUAL REPORT.— 

14 ‘‘(1) SUBMISSION.—On each of the dates de15 scribed in paragraph (2), an entity receiving a con16 tract under subsection (a) shall submit to Congress, 

17 the Secretary of Health and Human Services, and 

18 the Secretary of Labor and publish online for access 

19 by the general public, a report containing a descrip20 tion of— 

21 ‘‘(A) trends in the price, utilization, and 

22 total spending on health care services, including 

23 a geographic analysis of differences in such 

24 trends; 

25 ‘‘(B) limitations in the data set; 


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1 ‘‘(C) progress towards the objectives of 

2 this section; and 

3 ‘‘(D) the performance by the entity of the 

4 duties required under such contract. 

5 ‘‘(2) DATES DESCRIBED.—The reports de6 scribed in paragraph (1) shall be submitted— 

7 ‘‘(A) not later than 3 years after the date 

8 of enactment of the Fair Care Act of 2020; 

9 ‘‘(B) the later of 1 year after the date that 

10 is 3 years after such date of enactment or 

11 March 1 of the year after the date that is 3 

12 years after such date of enactment; and 

13 ‘‘(C) March 1 of each year thereafter. 

14 ‘‘(3) PUBLIC REPORTS AND RESEARCH.—An 

15 entity receiving a contract under subsection (a) 

16 shall, in coordination with authorized users, make 

17 analyses and research available to the public on an 

18 ongoing basis to promote the objectives of this sec19 tion. 

20 ‘‘(h) GRANTS TO STATES.— 

21 ‘‘(1) IN GENERAL.—The Secretary, in consulta22 tion with the Secretary of Labor, may award grants 

23 to States for the purpose of establishing and main24 taining State all-payer claims databases that imVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00244 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 prove transparency of data in order to meet the 

2 goals of subsection (a)(1). 

3 ‘‘(2) REQUIREMENT.—To be eligible to receive 

4 the funding under paragraph (1), a State shall sub5 mit data to the database as described in subsection 

6 (b)(1)(C), using the format described in subsection 

7 (d)(1). 

8 ‘‘(3) FUNDING.—There is authorized to be ap9 propriated $100,000,000 for the period of fiscal 

10 years 2020 through 2029 for the purpose of award11 ing grants to States under this subsection. 

12 ‘‘(i) EXEMPTION FROM PUBLIC DISCLOSURE.— 

13 ‘‘(1) IN GENERAL.—Claims data provided to 

14 the database, and the database itself shall not be 

15 considered public records and shall be exempt from 

16 public disclosure requirements. 

17 ‘‘(2) RESTRICTIONS ON USES FOR CERTAIN

18 PROCEEDINGS.—Data disclosed to authorized users 

19 shall not be subject to discovery or admission as 

20 public information, or evidence in judicial or admin21 istrative proceedings without consent of the affected 

22 parties. 

23 ‘‘(j) DEFINITIONS.— 

24 ‘‘(1) INDIVIDUALLY IDENTIFIABLE HEALTH IN25 FORMATION.—The term ‘individually identifiable 


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1 health information’ has the meaning given such term 

2 in section 1171(6) of the Social Security Act. 

3 ‘‘(2) PROPRIETARY FINANCIAL INFORMATION.— 

4 The term ‘proprietary financial information’ means 

5 data that would disclose the terms of a specific con6 tract between an individual health care provider or 

7 facility and a specific group health plan, Medicaid 

8 managed care organization or other managed care 

9 entity, or health insurance issuer offering group or 

10 individual coverage. 

11 ‘‘(k) RULE OF CONSTRUCTION.—Nothing in this sec12 tion shall be construed to affect or modify enforcement 

13 of the privacy, security, or breach notification rules pro14 mulgated under section 264(c) of the Health Insurance 

15 Portability and Accountability Act of 1996 (or successor 

16 regulations).’’. 

17 (b) GAO REPORT.— 

18 (1) IN GENERAL.—The Comptroller General of 

19 the United States shall conduct a study on— 

20 (A) the performance of the entity awarded 

21 a contract under section 2795(a) of the Public 

22 Health Service Act, as added by subsection (a), 

23 under such contract; 

24 (B) the privacy and security of the infor25 mation reported to the entity; and 


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1 (C) the costs incurred by such entity in 

2 performing such duties. 

3 (2) REPORTS.—Not later than 2 years after the 

4 effective date of the first contract entered into under 

5 section 2795(a) of the Public Health Service Act, as 

6 added by subsection (a), and again not later than 4 

7 years after such effective date, the Comptroller Gen8 eral of the United States shall submit to Congress 

9 a report containing the results of the study con10 ducted under paragraph (1), together with rec11 ommendations for such legislation and administra12 tive action as the Comptroller General determines 

13 appropriate. 

14 SEC. 324. PROTECTING PATIENTS AND IMPROVING THE AC15 CURACY OF PROVIDER DIRECTORY INFOR16 MATION. 

17 (a) IN GENERAL.—Subpart II of part A of title 

18 XXVII of the Public Health Service Act (42 U.S.C. 

19 300gg–11 et seq.), as amended by the preceding sections, 

20 is further amended by adding at the end the following: 

21 ‘‘SEC. 2729C. PROTECTING PATIENTS AND IMPROVING THE 

22 ACCURACY OF PROVIDER DIRECTORY INFOR23 MATION. 

24 ‘‘(a) NETWORK STATUS OF PROVIDERS.— 


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1 ‘‘(1) IN GENERAL.—Beginning on the date that 

2 is one year after the date of enactment of this sec3 tion, a group health plan or a health insurance 

4 issuer offering group or individual health insurance 

5 coverage shall— 

6 ‘‘(A) establish business processes to ensure 

7 that all enrollees in such plan or coverage re8 ceive proof of a health care provider’s network 

9 status, based on what a plan or issuer knows or 

10 could reasonably know— 

11 ‘‘(i) through a written electronic com12 munication from the plan or issuer to the 

13 enrollee, as soon as practicable and not 

14 later than 1 business day after a telephone 

15 inquiry is made by such enrollee for such 

16 information; 

17 ‘‘(ii) through an oral confirmation, 

18 documented by such issuer or coverage, 

19 and kept in the enrollee’s file for a min20 imum of 2 years; and 

21 ‘‘(iii) in real-time through an online 

22 health care provider directory search tool 

23 maintained by the plan or issuer; and 

24 ‘‘(B) include in any print directory a dis25 closure that the information included in the diVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00248 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 rectory is accurate as of the date of the last 

2 data update and that enrollees or prospective 

3 enrollees should consult the group health plan 

4 or issuer’s electronic provider directory on its 

5 website or call a specified customer service tele6 phone number to obtain the most current pro7 vider directory information. 

8 ‘‘(2) GROUP HEALTH PLAN AND HEALTH IN9 SURANCE ISSUER BUSINESS PROCESSES.—Beginning 

10 on the date that is one year after the date of enact11 ment of the Fair Care Act of 2020, a group health 

12 plan or a health insurance issuer offering group or 

13 individual health insurance coverage shall establish 

14 business processes to— 

15 ‘‘(A) verify and update, at least once every 

16 90 days, the provider directory information for 

17 all providers included in the online health care 

18 provider directory search tool described in para19 graph (1)(A)(iii); and 

20 ‘‘(B) remove any provider from such online 

21 directory search tool if such provider has not 

22 verified the directory information within the 

23 previous 6 months or the plan or issuer has 

24 been unable to verify the provider’s network 

25 participation. 


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1 ‘‘(b) COST-SHARING LIMITATIONS.— 

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

3 health insurance issuer offering group or individual 

4 health insurance coverage shall not apply, and shall 

5 ensure that no provider applies cost-sharing to an 

6 enrollee for treatment or services provided by a 

7 health care provider in excess of the normal cost8 sharing applied for in-network care (including any 

9 balance bill issued by the health care provider in10 volved), if such enrollee, or health care provider re11 ferring such enrollee, demonstrates (based on the 

12 electronic, written information described in sub13 section (a)(1)(A)(i), the oral confirmation described 

14 in subsection (a)(1)(A)(ii), or a copy of the online 

15 provider directory described in subsection 

16 (a)(1)(A)(iii) on the date the enrollee attempted to 

17 obtain the provider’s network status) that the en18 rollee relied on the information described in sub19 section (a)(1), if the provider’s network status or di20 rectory information on such directory was incorrect 

21 at the time the treatment or services involved was 

22 provided. 

23 ‘‘(2) REFUNDS TO ENROLLEES.—If a health 

24 care provider submits a bill to an enrollee in viola25 tion of paragraph (1), and the enrollee pays such 


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1 bill, the provider shall reimburse the enrollee for the 

2 full amount paid by the enrollee in excess of the in3 network cost-sharing amount for the treatment or 

4 services involved, plus interest, at an interest rate 

5 determined by the Secretary. 

6 ‘‘(c) PROVIDER BUSINESS PROCESSES.—A health 

7 care provider shall have in place business processes to en8 sure the timely provision of provider directory information 

9 to a group health plan or a health insurance issuer offer10 ing group or individual health insurance coverage to sup11 port compliance by such plans or issuers with subsection 

12 (a)(1). Such providers shall submit provider directory in13 formation to a plan or issuers, at a minimum— 

14 ‘‘(1) when the provider begins a network agree15 ment with a plan or with an issuer with respect to 

16 certain coverage; 

17 ‘‘(2) when the provider terminates a network 

18 agreement with a plan or with an issuer with respect 

19 to certain coverage; 

20 ‘‘(3) when there are material changes to the 

21 content of provider directory information described 

22 in subsection (a)(1); and 

23 ‘‘(4) every 90 days throughout the duration of 

24 the network agreement with a plan or issuer. 

25 ‘‘(d) ENFORCEMENT.— 


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1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a 

2 health care provider that violates a requirement 

3 under subsection (c) or takes actions that prevent a 

4 group health plan or health insurance issuer from 

5 complying with subsection (a)(1) or (b) shall be sub6 ject to a civil monetary penalty of not more than 

7 $10,000 for each act constituting such violation. 

8 ‘‘(2) SAFE HARBOR.—The Secretary may waive 

9 the penalty described under paragraph (1) with re10 spect to a health care provider that unknowingly vio11 lates subsection (b)(1) with respect to an enrollee if 

12 such provider rescinds the bill involved and, if appli13 cable, reimburses the enrollee within 30 days of the 

14 date on which the provider billed the enrollee in vio15 lation of such subsection. 

16 ‘‘(3) PROCEDURE.—The provisions of section 

17 1128A of the Social Security Act, other than sub18 sections (a) and (b) and the first sentence of sub19 section (c)(1) of such section, shall apply to civil 

20 money penalties under this subsection in the same 

21 manner as such provisions apply to a penalty or pro22 ceeding under section 1128A of the Social Security 

23 Act. 

24 ‘‘(e) SAVINGS CLAUSE.—Nothing in this section shall 

25 prohibit a provider from requiring in the terms of a conVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00252 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 tract, or contract termination, with a group health plan 

2 or health insurance issuer— 

3 ‘‘(1) that the plan or issuer remove, at the time 

4 of termination of such contract, the provider from a 

5 directory of the plan or issuer described in sub6 section (a)(1); or 

7 ‘‘(2) that the plan or issuer bear financial re8 sponsibility, including under subsection (b), for pro9 viding inaccurate network status information to an 

10 enrollee. 

11 ‘‘(f) DEFINITION.—For purposes of this section, the 

12 term ‘provider directory information’ includes the names, 

13 addresses, specialty, and telephone numbers of individual 

14 health care providers, and the names, addresses, and tele15 phone numbers of each medical group, clinic, or facility 

16 contracted to participate in any of the networks of the 

17 group health plan or health insurance coverage involved. 

18 ‘‘(g) RULE OF CONSTRUCTION.—Nothing in this sec19 tion shall be construed to preempt any provision of State 

20 law relating to health care provider directories or network 

21 adequacy.’’. 

22 (b) EFFECTIVE DATE.—Section 2729C of the Public 

23 Health Service Act, as added by subsection (a), shall take 

24 effect with respect to plan years beginning on or after the 


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1 date that is 18 months after the date of enactment of this 

2 Act. 

3 SEC. 325. ENSURING ENROLLEE ACCESS TO COST-SHARING 

4 INFORMATION. 

5 (a) IN GENERAL.—Subpart II of part A of title 

6 XXVII of the Public Health Service Act (42 U.S.C. 

7 300gg–11 et seq.), as amended by the preceding sections, 

8 is further amended by adding at the end the following: 

9 ‘‘SEC. 2729F. PROVISION OF COST-SHARING INFORMATION. 

10 ‘‘(a) PROVIDER DISCLOSURES.—A provider that is 

11 in-network with respect to a group health plan or a health 

12 insurance issuer offering group or individual health insur13 ance coverage shall provide to an enrollee in the plan or 

14 coverage who submits a request for the information de15 scribed in paragraph (1) or (2), together with accurate 

16 and complete information about the enrollee’s coverage 

17 under the applicable plan or coverage— 

18 ‘‘(1) as soon as practicable and not later than 

19 2 business days after the enrollee requests such in20 formation, a good faith estimate of the expected en21 rollee cost-sharing for the provision of a particular 

22 health care service (including any service that is rea23 sonably expected to be provided in conjunction with 

24 such specific service); and 


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1 ‘‘(2) as soon as practicable and not later than 

2 2 business days after an enrollee requests such in3 formation, the contact information for any ancillary 

4 providers for a scheduled health care service. 

5 ‘‘(b) INSURER DISCLOSURES.—A group health plan 

6 or a health insurance issuer offering group or individual 

7 health insurance coverage shall provide an enrollee in the 

8 plan or coverage with a good faith estimate of the enroll9 ee’s cost-sharing (including deductibles, copayments, and 

10 coinsurance) for which the enrollee would be responsible 

11 for paying with respect to a specific health care service 

12 (including any service that is reasonably expected to be 

13 provided in conjunction with such specific service), as soon 

14 as practicable and not later than 2 business days after 

15 a request for such information by an enrollee. 

16 ‘‘(c) ENFORCEMENT.— 

17 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a 

18 health care provider that violates a requirement 

19 under subsection (a) shall be subject to a civil mone20 tary penalty of not more than $10,000 for each act 

21 constituting such violation. 

22 ‘‘(2) PROCEDURE.—The provisions of section 

23 1128A of the Social Security Act, other than sub24 sections (a) and (b) and the first sentence of sub25 section (c)(1) of such section, shall apply to civil 


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1 money penalties under this subsection in the same 

2 manner as such provisions apply to a penalty or pro3 ceeding under section 1128A of the Social Security 

4 Act.’’. 

5 (b) EFFECTIVE DATE.—Section 2729G of the Public 

6 Health Service Act, as added by subsection (a), shall apply 

7 with respect to plan years beginning on or after the date 

8 that is 18 months after the date of enactment of this Act. 

9 SEC. 326. ACCESS OF INDIVIDUALS TO PROTECTED HEALTH 

10 INFORMATION. 

11 The provisions of section 164.524 of title 45, Code 

12 of Federal Regulations, as in effect on the day before the 

13 date of the enactment of this Act, shall have the force and 

14 effect of law. 

15 SEC. 327. TIMELY BILLS FOR PATIENTS. 

16 (a) IN GENERAL.— 

17 (1) AMENDMENT.—Part P of title III of the 

18 Public Health Service Act (42 U.S.C. 280g et seq.) 

19 is amended by adding at the end the following: 

20 ‘‘SEC. 399V–7. TIMELY BILLS FOR PATIENTS. 

21 ‘‘(a) IN GENERAL.—The Secretary shall require— 

22 ‘‘(1) health care facilities, or in the case of 

23 practitioners providing services outside of such a fa24 cility, practitioners, to provide to patients a list of 

25 services rendered during the visit to such facility or 


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1 practitioner, and, in the case of a facility, the name 

2 of the provider for each such service, upon discharge 

3 or end of the visit or by postal or electronic commu4 nication as soon as practicable and not later than 5 

5 calendar days after discharge or date of visit; and 

6 ‘‘(2) health care facilities and practitioners to 

7 furnish all adjudicated bills to the patient as soon as 

8 practicable, but not later than 45 calendar days 

9 after discharge or date of visit. 

10 ‘‘(b) PAYMENT AFTER BILLING.—No patient may be 

11 required to pay a bill for health care services any earlier 

12 than 35 days after the postmark date of a bill for such 

13 services. 

14 ‘‘(c) EFFECT OF VIOLATION.— 

15 ‘‘(1) NOTIFICATION AND REFUND REQUIRE16 MENTS.— 

17 ‘‘(A) PROVIDER LISTS.—If a facility or 

18 practitioner fails to provide a patient a list as 

19 required under subsection (a)(1), such facility 

20 or practitioner shall report such failure to the 

21 Secretary. 

22 ‘‘(B) BILLING.—If a facility or practitioner 

23 bills a patient after the 45-calendar-day period 

24 described in subsection (a)(2), such facility or 

25 practitioner shall— 


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1 ‘‘(i) report such bill to the Secretary; 

2 and 

3 ‘‘(ii) refund the patient for the full 

4 amount paid in response to such bill with 

5 interest, at a rate determined by the Sec6 retary. 

7 ‘‘(2) CIVIL MONETARY PENALTIES.— 

8 ‘‘(A) IN GENERAL.—The Secretary may 

9 impose civil monetary penalties of up to 

10 $10,000 a day on any facility or practitioner 

11 that— 

12 ‘‘(i) fails to provide a list required 

13 under subsection (a)(1) more than 10 

14 times, beginning on the date of such tenth 

15 failure; 

16 ‘‘(ii) submits more than 10 bills out17 side of the period described in subsection 

18 (a)(2), beginning on the date on which 

19 such facility or practitioner sends the tenth 

20 such bill; 

21 ‘‘(iii) fails to report to the Secretary 

22 any failure to provide lists as required 

23 under paragraph (1)(A), beginning on the 

24 date that is 45 calendar days after dis25 charge or visit; or 


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1 ‘‘(iv) fails to send any bill as required 

2 under subsection (a)(2), beginning on the 

3 date that is 45 calendar days after the 

4 date of discharge or visit, as applicable. 

5 ‘‘(B) PROCEDURE.—The provisions of sec6 tion 1128A of the Social Security Act, other 

7 than subsections (a) and (b) and the first sen8 tence of subsection (c)(1) of such section, shall 

9 apply to civil money penalties under this sub10 section in the same manner as such provisions 

11 apply to a penalty or proceeding under section 

12 1128A of the Social Security Act. 

13 ‘‘(3) SAFE HARBOR.—The Secretary may ex14 empt a practitioner or facility from the penalties 

15 under paragraph (2)(A) or extend the period of time 

16 specified under subsection (a)(2) for compliance with 

17 such subsection if a practitioner or facility— 

18 ‘‘(A) makes a good-faith attempt to send a 

19 bill within 30 days but is unable to do so be20 cause of an incorrect address; or 

21 ‘‘(B) experiences extenuating cir22 cumstances (as defined by the Secretary), such 

23 as a hurricane or cyberattack, that may reason24 ably delay delivery of a timely bill.’’. 


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1 (2) RULEMAKING.—Not later than 1 year after 

2 the date of enactment of this Act, the Secretary 

3 shall promulgate final regulations to define the term 

4 ‘‘extenuating circumstance’’ for purposes of section 

5 399V–7(c)(3)(B) of the Public Health Service Act, 

6 as added by paragraph (1). 

7 (b) GROUP HEALTH PLAN AND HEALTH INSURANCE

8 ISSUER REQUIREMENTS.—Subpart II of part A of title 

9 XXVII of the Public Health Service Act (42 U.S.C. 

10 300gg–11), as amended by the preceding sections, is fur11 ther amended by adding at the end the following: 

12 ‘‘SEC. 2729D. TIMELY BILLS FOR PATIENTS. 

13 ‘‘(a) IN GENERAL.—A group health plan or health 

14 insurance issuer offering group or individual health insur15 ance coverage shall have in place business practices with 

16 respect to in-network facilities and practitioners to ensure 

17 that claims are adjudicated in order to facilitate facility 

18 and practitioner compliance with the requirements under 

19 section 399V–7(a). 

20 ‘‘(b) CLARIFICATION.—Nothing in subsection (a) pro21 hibits a provider and a group health plan or health insur22 ance issuer from establishing in a contract the timeline 

23 for submission by either party to the other party of billing 

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1 vider and the plan or issuer necessary for meeting the 

2 deadline described in section 399V–7(a)(2).’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 subsections (a) and (b) shall take effect 6 months after 

5 the date of enactment of this Act. 

6 SEC. 328. ADVISORY GROUP ON REDUCING BURDEN OF 

7 HOSPITAL ADMINISTRATIVE REQUIREMENTS. 

8 (a) IN GENERAL.—Not later than January 1, 2021, 

9 the Secretary of Health and Human Services shall convene 

10 an advisory group to provide, in accordance with this sec11 tion, recommendations on ways the Federal Government 

12 could reduce the burden of administrative requirements on 

13 hospitals. 

14 (b) RECOMMENDATIONS.—Not later than January 1, 

15 2022, the advisory board convened under this section 

16 shall— 

17 (1) submit to the Secretary of Health and 

18 Human Services recommendations described under 

19 subsection (a) for executive action and any rec20 ommendations for State actions for potential consid21 eration in making grants under section 2(c) to 

22 States; and 

23 (2) submit to Congress recommendations de24 scribed under subsection (a) for legislative proposals. 


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1 (c) MEMBERSHIP.—The advisory board under this 

2 section shall consist of the following members: 

3 (1) Three representatives of companies that 

4 have— 

5 (A) geographically distributed workforces; 

6 (B) at least 10,000 employees; and 

7 (C) no more than 10 percent of such em8 ployees in any single State. 

9 (2) Three representatives of health insurance 

10 issuers and health plans, consisting of— 

11 (A) one representative of for-profit health 

12 insurance issuers and health plans with at least 

13 20,000,000 enrollees in the employer-sponsored 

14 market; 

15 (B) one representative of non-profit health 

16 insurance issuers and health plans operating in 

17 at least 5 States; and 

18 (C) one representative of non-profit health 

19 insurance issuers and health plans operating in 

20 a rural State (as defined by the Census Bu21 reau). 

22 (3) Seven public policy experts in the field of 

23 hospital consolidation. 


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1 SEC. 329. DATA REPORTING TO IMPROVE THE TRANS2 PARENCY REGARDING HOW 340B HOSPITAL 

3 COVERED ENTITIES PROVIDE CARE FOR PA4 TIENTS. 

5 Section 340B of the Public Health Service Act (42 

6 U.S.C. 256b) is amended by adding at the end the fol7 lowing new subsection: 

8 ‘‘(f) DATA REPORTING TO IMPROVE THE TRANS9 PARENCY REGARDING HOW HOSPITAL COVERED ENTI10 TIES PROVIDE CARE FOR PATIENTS.— 

11 ‘‘(1) IN GENERAL.—Beginning on the date that 

12 is 14 months after the date of the enactment of this 

13 subsection, and annually thereafter, subject to sub14 paragraph (C), a covered entity described in sub15 paragraph (L) or (M) of subsection (a)(4), unless 

16 otherwise indicated, shall report on the following, 

17 with respect to the previous year, in such a manner 

18 and form as specified by the Secretary: 

19 ‘‘(A) The following information: 

20 ‘‘(i) With respect to such covered enti21 ty and with respect to each child site of 

22 such entity (as referenced in paragraph 

23 (11)), the number and percentage of indi24 viduals who are dispensed or administered 

25 drugs that are subject to an agreement 

26 under this section, organized by form of 


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1 health insurance coverage of such individ2 uals (including at least by the Medicare 

3 program under title XVIII of the Social 

4 Security Act, the Medicaid program under 

5 title XIX of such Act, health insurance 

6 coverage offered in the individual or group 

7 market or a group health plan (as such 

8 terms are defined in section 2791), and 

9 uninsured). 

10 ‘‘(ii) With respect to each such child 

11 site of such entity, the total costs incurred 

12 at each such site and the cost incurred at 

13 each such site for charity care as defined 

14 in line 23 of worksheet S–10 to the Medi15 care cost report or in any successor form. 

16 ‘‘(B) The aggregate amount of gross reim17 bursement received by each such covered entity 

18 (including child sites of such entity) described 

19 in such subparagraph (L) or (M) for all drugs 

20 purchased that are subject to an agreement 

21 under this section and the entity’s aggregate 

22 acquisition cost for such drugs. 

23 ‘‘(C) In the case of covered entity de24 scribed in subparagraph (L) of subsection 

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1 cation (and at least annually thereafter), the 

2 contract that is the basis for eligibility under 

3 the requirement under clause (i) of such sub4 paragraph and any modifications to such con5 tract for purposes of review by the Secretary. 

6 ‘‘(D) With respect to such covered entity 

7 and with respect to each child site of such enti8 ty, the name of all third-party vendors or other 

9 similar entities that the covered entity contracts 

10 with to provide services associated with the pro11 gram under this section. 

12 ‘‘(2) AVAILABILITY OF INFORMATION.— 

13 ‘‘(A) IN GENERAL.—The Secretary shall 

14 make data reported by covered entities under 

15 subparagraphs (A), (C), and (D) of paragraph 

16 (1) available on the public website of the De17 partment of Health and Human Services in an 

18 electronic and searchable format, which may in19 clude the 340B Office of Pharmacy Affairs In20 formation System or a successor to such sys21 tem. 

22 ‘‘(B) FORMAT.—Data made available 

23 under subparagraph (A) shall be made available 

24 in a manner that shows each category of data 

25 reported both in the aggregate and identified by 


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1 covered entities described in subparagraphs (L) 

2 and (M) of subsection (a)(4) and child sites of 

3 such covered entities. In carrying out this para4 graph, with respect to data reported pursuant 

5 to paragraph (1)(C), the Secretary shall ensure 

6 that any proprietary information shall be re7 dacted from contracts submitted pursuant to 

8 such paragraph (1)(C) before posting such 

9 data. 

10 ‘‘(3) INTERIM FINAL REGULATIONS.—The Sec11 retary shall issue interim final regulations no later 

12 than the date that is 6 months after the date of the 

13 enactment of this subsection, to carry out this sub14 section and shall finalize such regulations prior to 

15 the end of the moratorium period to which sub16 section (a)(11) applies. 

17 ‘‘(4) REPORTS TO CONGRESS.— 

18 ‘‘(A) OIG REPORT.—Not later than 2 

19 years after the date of the enactment of this 

20 subsection, the Office of the Inspector General 

21 shall submit to Congress a final report on the 

22 level of charity care provided by covered entities 

23 described in subparagraphs (L) and (M) of sub24 section (a)(4) and separately by child sites of 


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1 such covered entities, as reported in paragraph 

2 (1)(A). 

3 ‘‘(B) GAO REPORTS.— 

4 ‘‘(i) INITIAL REPORT.—Not later than 

5 1 year after the date of the enactment of 

6 this subsection, the Comptroller General of 

7 the United States shall submit to Congress 

8 a report— 

9 ‘‘(I) analyzing the State and local 

10 government contracts intended to sat11 isfy the requirement under subsection 

12 (a)(4)(L)(i) for a covered entity to 

13 qualify as an entity described in sub14 paragraph (L) of subsection (a)(4); 

15 ‘‘(II) assessing the amount of 

16 care such contracts obligate such enti17 ty to provide to low-income individuals 

18 ineligible for Medicare under title 

19 XVIII of the Social Security Act and 

20 Medicaid under title XIX of such Act; 

21 and 

22 ‘‘(III) analyzing how these con23 tracts define low-income individuals 

24 and whether the Secretary reviews 

25 such determinations. 


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1 ‘‘(ii) SUBSEQUENT REPORT.—Not 

2 later than 2 years after the date of the en3 actment of this subsection, the Comptroller 

4 General of the United States shall submit 

5 to Congress a final report on the informa6 tion collected under paragraph (1)(B) re7 garding the difference between the aggre8 gate gross reimbursement and aggregate 

9 acquisition costs received by each such cov10 ered entity (including child sites of such 

11 entity) for drugs subject to an agreement 

12 under this section.’’. 

13 SEC. 330. REQUIRING 340B DRUG DISCOUNT PROGRAM RE14 PORTS BY DSH HOSPITAL COVERED ENTITIES 

15 ON LOW-INCOME UTILIZATION RATE OF OUT16 PATIENT HOSPITAL SERVICES. 

17 (a) IN GENERAL.—Section 340B(d)(2) of the Public 

18 Health Service Act (42 U.S.C. 256b(d)(2)) is amended— 

19 (1) in subparagraph (B)(i), by inserting before 

20 the period at the end the following: ‘‘, including, 

21 with respect to such updates made on or after Janu22 ary 1, 2021, by requiring covered entities described 

23 in subsection (a)(4)(L) to submit (and to so regu24 larly update) information described in subparagraph 

25 (C)’’; and 


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1 (2) by adding at the end the following new sub2 paragraph: 

3 ‘‘(C) INFORMATION ON LOW-INCOME UTI4 LIZATION RATE OF OUTPATIENT HOSPITAL

5 SERVICES.— 

6 ‘‘(i) IN GENERAL.—For purposes of 

7 subparagraph (B)(i), the information de8 scribed in this subparagraph, with respect 

9 to a covered entity described in subsection 

10 (a)(4)(L) and an update under such sub11 paragraph (B)(i), is— 

12 ‘‘(I) the low-income outpatient 

13 utilization rate of such covered entity 

14 for the most recent fiscal year; and 

15 ‘‘(II) the low-income outpatient 

16 utilization rate of off-site outpatient 

17 facilities, clinics, eligible off-site loca18 tions, and associated sites of such en19 tity identified as child sites of such 

20 entity pursuant to the identification 

21 system under subparagraph (B)(iv) 

22 for the most recent fiscal year. 

23 ‘‘(ii) LOW-INCOME OUTPATIENT UTI24 LIZATION RATE DEFINED.—In this sub25 paragraph, the term ‘low-income outpatient 


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1 utilization rate’ has the meaning given the 

2 term ‘low-income utilization rate’ under 

3 paragraph (3) of section 1923(b) of the 

4 Social Security Act, except that— 

5 ‘‘(I) clauses (i) and (ii) of sub6 paragraph (A) of such paragraph 

7 shall be applied as if— 

8 ‘‘(aa) each reference to ‘pa9 tient services’ were a reference to 

10 ‘patient services furnished on an 

11 outpatient basis’; and 

12 ‘‘(bb) for purposes of clause 

13 (i)(II) of this subparagraph, each 

14 reference to ‘hospital’ were a ref15 erence to ‘off-site outpatient fa16 cilities, clinics, eligible off-site lo17 cations, and associated sites of 

18 the hospital that are identified as 

19 child sites of the hospital pursu20 ant to the identification system 

21 under section 340B(d)(2)(B)(iv) 

22 of the Public Health Service Act’; 

23 and 


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1 ‘‘(II) clauses (i) and (ii) of sub2 paragraph (B) of such paragraph 

3 shall be applied as if— 

4 ‘‘(aa) each reference to ‘in5 patient hospital services’ were a 

6 reference to ‘outpatient hospital 

7 services’; and 

8 ‘‘(bb) for purposes of clause 

9 (i)(II) each reference to ‘hos10 pital’s charges’ were a reference 

11 to ‘charges of the off-site out12 patient facilities, clinics, eligible 

13 off-site locations, and associated 

14 sites of the hospital that are 

15 identified as child sites of the 

16 hospital pursuant to the identi17 fication system under section 

18 340B(d)(2)(B)(iv) of the Public 

19 Health Service Act’.’’. 

20 (b) ANNUAL REPORTS.—Not later than January 1, 

21 2021, and annually thereafter, the Administrator of the 

22 Health Resources and Services Administration shall sub23 mit to Congress a report on information submitted by cov24 ered entities for the previous year pursuant to the amend25 ments made by subsection (a). 


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1 SEC. 331. EMPLOYER BENEFITS REPORTS. 

2 (a) IN GENERAL.—Subject to subsection (b), for each 

3 plan year beginning on or after January 1, 2021, a group 

4 health plan and a health insurance issuer offering group 

5 health insurance coverage shall provide to each individual 

6 enrolled in such plan or such coverage for such plan year 

7 a notification containing the following: 

8 (1) The amount the sponsor of such group 

9 health plan expended with respect to such individual 

10 under such plan for such plan year (or, in the case 

11 of a health insurance issuer offering group health in12 surance coverage, the amount the employer of such 

13 individual contributed for such coverage for such in14 dividual for such plan year). 

15 (2) The amount the sponsor of such group 

16 health plan expended with respect to such individual 

17 under such plan for each previous plan year (or, in 

18 the case of a health insurance issuer offering group 

19 health insurance coverage, the amount the employer 

20 of such individual contributed for such coverage for 

21 such individual for each previous plan year), if appli22 cable. 

23 (b) LIMITATION.—Subsection (a) shall not apply to 

24 a group health plan, or a health insurance issuer offering 

25 group health insurance coverage, for a plan year if, for 


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1 such plan year, the number of individuals enrolled under 

2 such plan or such coverage was less than 100. 

3 (c) PENALTY.—In the case that the Secretary of 

4 Health and Human Services determines that a group 

5 health plan or a health insurance issuer offering group 

6 health insurance failed to provide the notice required 

7 under subsection (a), the Secretary may impose a civil 

8 monetary penalty on the sponsor of such plan or such 

9 issuer, as applicable, in an amount not to exceed $100 

10 per individual enrolled in such plan or such coverage per 

11 day that such sponsor or issuer failed to provide such noti12 fication to such individual. 

13 (d) DEFINITIONS.—In this section, the terms ‘‘group 

14 health plan’’, ‘‘group health insurance coverage’’, ‘‘health 

15 insurance issuer’’, and ‘‘sponsor’’ have the meaning given 

16 such terms in section 2791 of the Public Health Service 

17 Act (42 U.S.C. 300gg–91). 

18 SEC. 332. GROUP HEALTH PLAN REPORTING REQUIRE19 MENTS. 

20 Part C of title XXVII of the Public Health Service 

21 Act (42 U.S.C. 300gg–91 et seq.), as amended by the pre22 ceding sections, is further amended by adding at the end 

23 the following: 


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1 ‘‘SEC. 2797. GROUP HEALTH PLAN REPORTING. 

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

3 insurance issuer offering group or individual health insur4 ance coverage shall submit to the Secretary, not later than 

5 March 1 of each year, the following information with re6 spect to the health plan in the previous plan year: 

7 ‘‘(1) The beginning and end dates of the plan 

8 year. 

9 ‘‘(2) The number of enrollees. 

10 ‘‘(3) Each State in which the plan is offered. 

11 ‘‘(4) The 50 brand prescription drugs most fre12 quently dispensed by pharmacies for claims paid by 

13 the issuer, and the total number of paid claims for 

14 each such drug. 

15 ‘‘(5) The 50 most costly prescription drugs with 

16 respect to the plan by total annual spending, and the 

17 annual amount spent by the plan for each such 

18 drug. 

19 ‘‘(6) The 50 prescription drugs with the great20 est increase in plan expenditures over the plan year 

21 preceding the plan year that is the subject of the re22 port, and, for each such drug, the change in 

23 amounts expended by the plan in each such plan 

24 year. 

25 ‘‘(7) Total spending on health care services by 

26 such group health plan, broken down by— 


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1 ‘‘(A) the type of costs, including— 

2 ‘‘(i) hospital costs; 

3 ‘‘(ii) health care provider and clinical 

4 service costs; 

5 ‘‘(iii) costs for prescription drugs; and 

6 ‘‘(iv) other medical costs; and 

7 ‘‘(B) spending on prescription drugs by— 

8 ‘‘(i) the health plan; and 

9 ‘‘(ii) the enrollees. 

10 ‘‘(8) The average monthly premium— 

11 ‘‘(A) paid by employers on behalf of enroll12 ees; and 

13 ‘‘(B) paid by enrollees. 

14 ‘‘(9) Any impact on premiums by rebates, fees, 

15 and any other remuneration paid by drug manufac16 turers to the plan or its administrators or service 

17 providers, with respect to prescription drugs pre18 scribed to enrollees in the plan, including— 

19 ‘‘(A) the amounts so paid for each thera20 peutic class of drugs; and 

21 ‘‘(B) the amounts so paid for each of the 

22 25 drugs that yielded the highest amount of re23 bates and other remuneration under the plan 

24 from drug manufacturers during the plan year. 


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1 ‘‘(10) Any reduction in premiums and out-of2 pocket costs associated with rebates, fees, or other 

3 remuneration described in paragraph (9). 

4 ‘‘(b) REPORT.—Not later than 18 months after the 

5 date on which the first report is required under subsection 

6 (a) and biannually thereafter, the Secretary, acting 

7 through the Assistant Secretary of Planning and Evalua8 tion and in coordination with the Inspector General of the 

9 Department of Health and Human Services, shall make 

10 available on the internet website of the Department of 

11 Health and Human Services a report on prescription drug 

12 reimbursements under group health plans, prescription 

13 drug pricing trends, and the role of prescription drug costs 

14 in contributing to premium increases or decreases under 

15 such plans, aggregated in such a way as no drug or plan 

16 specific information will be made public. 

17 ‘‘(c) PRIVACY PROTECTIONS.—No confidential or 

18 trade secret information submitted to the Secretary under 

19 subsection (a) shall be included in the report under sub20 section (b).’’. 


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1 SEC. 333. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

2 ON PROFIT- AND REVENUE-SHARING IN 

3 HEALTH CARE. 

4 (a) STUDY.—Not later than 1 year after the date of 

5 enactment of this Act, the Comptroller General of the 

6 United States shall conduct a study to— 

7 (1) describe what is known about profit- and 

8 revenue-sharing relationships in the commercial 

9 health care markets, including those relationships 

10 that— 

11 (A) involve one or more— 

12 (i) physician groups that practice 

13 within a hospital included in the profit- or 

14 revenue-sharing relationship, or refer pa15 tients to such hospital; 

16 (ii) laboratory, radiology, or pharmacy 

17 services that are delivered to privately in18 sured patients of such hospital; 

19 (iii) surgical services; 

20 (iv) hospitals or group purchasing or21 ganizations; or 

22 (v) rehabilitation or physical therapy 

23 facilities or services; and 

24 (B) include revenue- or profit-sharing 

25 whether through a joint venture, management 


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1 or professional services agreement, or other 

2 form of gain-sharing contract; 

3 (2) describe Federal oversight of such relation4 ships, including authorities of the Department of 

5 Health and Human Services and the Federal Trade 

6 Commission to review such relationships and their 

7 potential to increase costs for patients, and identify 

8 limitations in such oversight; and 

9 (3) as appropriate, make recommendations to 

10 improve Federal oversight of such relationships. 

11 (b) REPORT.—Not later than 1 year after the date 

12 of enactment of this Act, the Comptroller General of the 

13 United States shall prepare and submit a report on the 

14 study conducted under subsection (a) to the Committee 

15 on Health, Education, Labor, and Pensions of the Senate 

16 and the Committee on Education and Labor and Com17 mittee on Energy and Commerce of the House of Rep18 resentatives. 


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1 Subtitle C—Prescription Drug 

2 Competition and Innovation 

3 SEC. 341. EXPEDITED DEVELOPMENT AND PRIORITY RE4 VIEW FOR GENERIC COMPLEX DRUG PROD5 UCTS. 

6 Subchapter A of chapter V of the Federal Food, 

7 Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend8 ed by adding at the end the following: 

9 ‘‘SEC. 524B. EXPEDITED DEVELOPMENT AND PRIORITY RE10 VIEW FOR GENERIC COMPLEX DRUG PROD11 UCTS. 

12 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Secretary 

13 shall establish a program to expedite the development of, 

14 and provide priority review under section 505(j) for, ge15 neric complex drug products. 

16 ‘‘(b) REQUEST FOR DESIGNATION.—A sponsor of a 

17 generic complex drug product may request that the Sec18 retary designate such product for expedited development 

19 and priority review under this section. 

20 ‘‘(c) DESIGNATION PROCESS.— 

21 ‘‘(1) IN GENERAL.—Not later than 60 calendar 

22 days after the receipt of a request under subsection 

23 (c), the Secretary shall determine whether the prod24 uct that is the subject of the request meets the cri25 teria under subsection (e) to be considered a generic 


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1 complex drug product. If the Secretary determines 

2 that the product meets the criteria, the Secretary 

3 shall designate the product for expedited develop4 ment and priority review. 

5 ‘‘(2) REVIEW.—Review of a request under sub6 section (b) shall be undertaken by a team that is 

7 composed of experienced staff and senior managers 

8 of the Food and Drug Administration. 

9 ‘‘(3) WITHDRAWAL.—The Secretary may not 

10 withdraw a designation granted under this section 

11 on the basis of the criteria under subsection (e) no 

12 longer applying because of the subsequent clearance 

13 or approval of any other product. 

14 ‘‘(d) EXPEDITED DEVELOPMENT AND PRIORITY RE15 VIEW GUIDANCE.— 

16 ‘‘(1) CONTENT.—Not later than December 31, 

17 2021, the Secretary shall issue guidance on the im18 plementation of this section. Such guidance shall— 

19 ‘‘(A) set forth the process by which a per20 son may seek a designation under subsection 

21 (c); 

22 ‘‘(B) provide a template for requests under 

23 subsection (b); 


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1 ‘‘(C) identify the criteria the Secretary will 

2 use in evaluating a request for designation 

3 under this section; and 

4 ‘‘(D) identify the criteria and processes the 

5 Secretary will use to expedite the development 

6 and review of products designated under this 

7 section. 

8 ‘‘(2) PROCESS.—Prior to finalizing the guid9 ance under paragraph (1), the Secretary shall seek 

10 public comment on a draft version of that guidance. 

11 ‘‘(e) GENERIC COMPLEX DRUG PRODUCT DE12 FINED.—In this section, the term ‘generic complex drug 

13 product’ means a product that represents a complex ther14 apy that consists of or includes a drug for approval under 

15 section 505(j) and that— 

16 ‘‘(1)(A) contains complex active ingredients 

17 (such as peptides, polymeric compounds, complex 

18 mixtures of active ingredients, and naturally sourced 

19 ingredients); 

20 ‘‘(B) is composed of complex formulations (such 

21 as liposomes or colloids); 

22 ‘‘(C) requires a complex route of delivery (such 

23 as locally acting drugs such as dermatological prod24 ucts and complex ophthalmological products and otic 


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1 dosage forms that are formulated as suspensions, 

2 emulsions, or gels); or 

3 ‘‘(D) involves a complex dosage form (such as 

4 transdermals, metered dose inhalers, or extended re5 lease injectables); 

6 ‘‘(2) presents as a complex drug-device com7 bination product (such as auto injectors or metered 

8 dose inhalers); or 

9 ‘‘(3) is a product that would benefit from early 

10 scientific engagement due to complexity or uncer11 tainty concerning the approval pathway under sec12 tion 505(j).’’. 

13 SEC. 342. PREVENTING BLOCKING OF GENERIC DRUGS. 

14 (a) IN GENERAL.—Section 505(j)(5)(B)(iv)(I) of the 

15 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

16 355(j)(5)(B)(iv)(I)) is amended— 

17 (1) by striking ‘‘180 days after the date’’ and 

18 inserting ‘‘180 days after the earlier of the fol19 lowing: 

20 ‘‘(aa) The date’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(bb) The date on which all of the fol23 lowing conditions are first met, provided 

24 no application submitted by any first appli25 cant is approved on or before such date: 


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1 ‘‘(AA) An application for the 

2 drug submitted by an applicant other 

3 than a first applicant has received 

4 tentative approval and could receive 

5 approval, if no first applicant were eli6 gible for 180-day exclusivity under 

7 this clause, and such applicant has 

8 not entered into an agreement that 

9 would prevent commercial marketing 

10 upon approval and has submitted a 

11 notification to the Secretary docu12 menting that it has not entered into 

13 an agreement that would prevent com14 mercial marketing. 

15 ‘‘(BB) Thirty-three months have 

16 passed since the date of submission of 

17 an application for the drug by one 

18 first applicant, if there is only one 

19 first applicant, or, in the case of more 

20 than one first applicant, 33 months 

21 have passed since the date of submis22 sion of all such applications. 

23 ‘‘(CC) Approval of an application 

24 for the drug submitted by at least one 


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1 first applicant would not be precluded 

2 under clause (iii).’’. 

3 (b) INFORMATION.—Not later than 60 days of the 

4 date of enactment of this Act, the Secretary of Health and 

5 Human Services (referred to in this subsection as the 

6 ‘‘Secretary’’) shall publish, as appropriate and available, 

7 information sufficient to allow applicants to assess wheth8 er the conditions described in subitems (AA) through (CC) 

9 of section 505(j)(5)(B)(iv)(I)(bb) of the Federal Food, 

10 Drug, and Cosmetic Act (as amended by subsection (a)) 

11 have been or will be satisfied for all applications where 

12 the exclusivity period under (iv)(I) of section 505(j)(5)(B) 

13 of the Federal Food, Drug, and Cosmetic Act (as so 

14 amended) has not expired, and shall provide updates to 

15 reflect the most recent information available to the Sec16 retary. 

17 SEC. 343. ENSURING TIMELY ACCESS TO GENERICS. 

18 Section 505(q) of the Federal Food, Drug, and Cos19 metic Act (21 U.S.C. 355(q)) is amended— 

20 (1) in paragraph (1)— 

21 (A) in subparagraph (A)(i), by inserting ‘‘, 

22 10.31,’’ after ‘‘10.30’’; 

23 (B) in subparagraph (E)— 

24 (i) by striking ‘‘application and’’ and 

25 inserting ‘‘application or’’; 


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1 (ii) by striking ‘‘If the Secretary’’ and 

2 inserting the following: 

3 ‘‘(i) IN GENERAL.—If the Secretary’’; 

4 and 

5 (iii) by striking the second sentence 

6 and inserting the following: 

7 ‘‘(ii) PRIMARY PURPOSE OF DELAY8 ING.— 

9 ‘‘(I) IN GENERAL.—In deter10 mining whether a petition was sub11 mitted with the primary purpose of 

12 delaying an application, the Secretary 

13 may consider the following factors: 

14 ‘‘(aa) Whether the petition 

15 was submitted in accordance with 

16 paragraph (2)(B), based on when 

17 the petitioner knew or reasonably 

18 should have known the relevant 

19 information relied upon to form 

20 the basis of such petition. 

21 ‘‘(bb) Whether the petitioner 

22 has submitted multiple or serial 

23 petitions or supplements to peti24 tions raising issues that reason25 ably could have been known to 


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1 the petitioner at the time of sub2 mission of the earlier petition or 

3 petitions. 

4 ‘‘(cc) Whether the petition 

5 was submitted close in time to a 

6 known, first date upon which an 

7 application under subsection 

8 (b)(2) or (j) of this section or 

9 section 351(k) of the Public 

10 Health Service Act could be ap11 proved. 

12 ‘‘(dd) Whether the petition 

13 was submitted without relevant 

14 data or information in support of 

15 the scientific positions forming 

16 the basis of such petition. 

17 ‘‘(ee) Whether the petition 

18 raises the same or substantially 

19 similar issues as a prior petition 

20 to which the Secretary has re21 sponded substantively already, in22 cluding if the subsequent submis23 sion follows such response from 

24 the Secretary closely in time. 


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1 ‘‘(ff) Whether the petition 

2 requests changing the applicable 

3 standards that other applicants 

4 are required to meet, including 

5 requesting testing, data, or label6 ing standards that are more on7 erous or rigorous than the stand8 ards the Secretary has deter9 mined to be applicable to the list10 ed drug, reference product, or pe11 titioner’s version of the same 

12 drug. 

13 ‘‘(gg) The petitioner’s record 

14 of submitting petitions to the 

15 Food and Drug Administration 

16 that have been determined by the 

17 Secretary to have been submitted 

18 with the primary purpose of 

19 delay. 

20 ‘‘(hh) Other relevant and 

21 appropriate factors, which the 

22 Secretary shall describe in guid23 ance. 

24 ‘‘(II) GUIDANCE.—The Secretary 

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1 propriate, to describe factors the Sec2 retary considers in accordance with 

3 subclause (II).’’; 

4 (C) by adding at the end the following: 

5 ‘‘(iii) REFERRAL TO THE FEDERAL

6 TRADE COMMISSION.—The Secretary shall 

7 establish procedures for referring to the 

8 Federal Trade Commission any petition or 

9 supplement to a petition that the Secretary 

10 determines was submitted with the primary 

11 purpose of delaying approval of an applica12 tion. Such procedures shall include notifi13 cation to the petitioner by the Secretary.’’; 

14 (D) by striking subparagraph (F); 

15 (E) by redesignating subparagraphs (G) 

16 through (I) as subparagraphs (F) through (H), 

17 respectively; and 

18 (F) in subparagraph (H), as so redesig19 nated, by striking ‘‘submission of this petition’’ 

20 and inserting ‘‘submission of this document’’; 

21 (2) in paragraph (2)— 

22 (A) by redesignating subparagraphs (A) 

23 through (C) as subparagraphs (C) through (E), 

24 respectively; 


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1 (B) by inserting before subparagraph (C), 

2 as so redesignated, the following: 

3 ‘‘(A) IN GENERAL.—A person shall submit 

4 a petition to the Secretary under paragraph (1) 

5 before filing a civil action in which the person 

6 seeks to set aside, delay, rescind, withdraw, or 

7 prevent submission, review, or approval of an 

8 application submitted under subsection (b)(2) 

9 or (j) of this section or section 351(k) of the 

10 Public Health Service Act. Such petition and 

11 any supplement to such a petition shall describe 

12 all information and arguments that form the 

13 basis of the relief requested in any civil action 

14 described in the previous sentence. 

15 ‘‘(B) TIMELY SUBMISSION OF CITIZEN PE16 TITION.—A petition and any supplement to a 

17 petition shall be submitted within 60 days after 

18 the person knew, or reasonably should have 

19 known, the information that forms the basis of 

20 the request made in the petition or supple21 ment.’’; 

22 (C) in subparagraph (C), as so redesig23 nated— 

24 (i) in the heading, by striking ‘‘WITH25 IN 150 DAYS’’; 


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1 (ii) in clause (i), by striking ‘‘during 

2 the 150-day period referred to in para3 graph (1)(F),’’; and 

4 (iii) by amending clause (ii) to read as 

5 follows: 

6 ‘‘(ii) on or after the date that is 151 

7 days after the date of submission of the 

8 petition, the Secretary approves or has ap9 proved the application that is the subject 

10 of the petition without having made such a 

11 final decision.’’; 

12 (D) by amending subparagraph (D), as so 

13 redesignated, to read as follows: 

14 ‘‘(D) DISMISSAL OF CERTAIN CIVIL AC15 TIONS.— 

16 ‘‘(i) PETITION.—If a person files a 

17 civil action against the Secretary in which 

18 a person seeks to set aside, delay, rescind, 

19 withdraw, or prevent submission, review, or 

20 approval of an application submitted under 

21 subsection (b)(2) or (j) of this section or 

22 section 351(k) of the Public Health Service 

23 Act without complying with the require24 ments of subparagraph (A), the court shall 


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1 dismiss without prejudice the action for 

2 failure to exhaust administrative remedies. 

3 ‘‘(ii) TIMELINESS.—If a person files a 

4 civil action against the Secretary in which 

5 a person seeks to set aside, delay, rescind, 

6 withdraw, or prevent submission, review, or 

7 approval of an application submitted under 

8 subsection (b)(2) or (j) of this section or 

9 section 351(k) of the Public Health Service 

10 Act without complying with the require11 ments of subparagraph (B), the court shall 

12 dismiss with prejudice the action for fail13 ure to timely file a petition. 

14 ‘‘(iii) FINAL RESPONSE.—If a civil ac15 tion is filed against the Secretary with re16 spect to any issue raised in a petition time17 ly filed under paragraph (1) in which the 

18 petitioner requests that the Secretary take 

19 any form of action that could, if taken, set 

20 aside, delay, rescind, withdraw, or prevent 

21 submission, review, or approval of an appli22 cation submitted under subsection (b)(2) 

23 or (j) of this section or section 351(k) of 

24 the Public Health Service Act before the 

25 Secretary has taken final agency action on 


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1 the petition within the meaning of sub2 paragraph (C), the court shall dismiss 

3 without prejudice the action for failure to 

4 exhaust administrative remedies.’’; and 

5 (E) in clause (iii) of subparagraph (E), as 

6 so redesignated, by striking ‘‘as defined under 

7 subparagraph (2)(A)’’ and inserting ‘‘within the 

8 meaning of subparagraph (C)’’; and 

9 (3) in paragraph (4)— 

10 (A) by striking ‘‘EXCEPTIONS’’ and all that 

11 follows through ‘‘This subsection does’’ and in12 serting ‘‘EXCEPTIONS.—This subsection does’’; 

13 (B) by striking subparagraph (B); and 

14 (C) by redesignating clauses (i) and (ii) as 

15 subparagraphs (A) and (B), respectively, and 

16 adjusting the margins accordingly. 

17 SEC. 344. PREEMPTION OF STATE BARRIERS TO THE SUB18 STITUTION OF BIOSIMILAR PRODUCTS. 

19 No State, or any political subdivision thereof, may, 

20 under any circumstances, prohibit a pharmacy or phar21 macist from dispensing, in place of a biological reference 

22 product, any biosimilar that the Food and Drug Adminis23 tration has designated as an interchangeable product for 

24 that biological reference product. 


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1 SEC. 345. INCREASING PHARMACEUTICAL OPTIONS TO 

2 TREAT AN UNMET MEDICAL NEED. 

3 Subsection (b) of section 506 of the Federal Food, 

4 Drug, and Cosmetic Act (21 U.S.C. 356) is amended by 

5 adding at the end the following: 

6 ‘‘(4) UNMET MEDICAL NEED.—For purposes of 

7 paragraph (1), a drug shall be deemed to address an 

8 unmet medical need for a disease or condition if 

9 fewer than 3 available drugs exist for the treatment 

10 of such disease or condition.’’. 

11 SEC. 346. PROVISIONAL APPROVAL OF NEW HUMAN DRUGS. 

12 (a) IN GENERAL.—Subchapter A of chapter V of the 

13 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 

14 et seq.) is amended by adding at the end of the following: 

15 ‘‘SEC. 524B. PROVISIONAL APPROVAL OF NEW HUMAN 

16 DRUGS. 

17 ‘‘(a) PRIORITY REVIEW AND EVALUATION OF APPLI18 CATIONS.— 

19 ‘‘(1) IN GENERAL.—The Secretary shall estab20 lish a priority review system to evaluate applications 

21 submitted under this pathway for provisional ap22 proval within 90 days of receipt of a completed ap23 plication. 

24 ‘‘(2) REVIEW OF APPLICATIONS DURING

25 EPIDEMICS AND PANDEMICS.—In the case of an epi26 demic or pandemic, including with respect to 


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1 COVID–19, the Secretary shall accept and review 

2 various portions of an application submitted under 

3 the pathway under this section for provisional ap4 proval on a rolling basis, and the review of any part 

5 of an application so submitted shall be completed 

6 not later than 3 weeks after submission. 

7 ‘‘(3) OTHER DESIGNATIONS.—If a drug sub8 mitted for review under the pathway under this sec9 tion is eligible for a special designation by the Sec10 retary under this Act, including as a drug for a rare 

11 disease or condition under section 526, all benefits 

12 of such other designation shall be available for use 

13 under provisional approval, including any tax credits 

14 and waiving of fees under chapter VII. 

15 ‘‘(b) ELIGIBILITY.—A drug may be eligible for provi16 sional approval under this section if the Secretary deter17 mines that the drug is intended for the treatment, preven18 tion, or medical diagnosis of— 

19 ‘‘(1) a serious or life-threatening disease or con20 dition for which there is a reasonable likelihood that 

21 premature death will occur without early medical 

22 intervention for an individual contracting or being 

23 diagnosed with such disease or condition; 

24 ‘‘(2) a disease or condition that poses a threat 

25 of epidemic or pandemic; or 


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1 ‘‘(3) a disease or condition associated with mor2 bidity that has a substantial impact on day-to-day 

3 functioning. 

4 ‘‘(c) STANDARD OF REVIEW FOR APPROVAL.— 

5 ‘‘(1) REQUIREMENTS.—An application for pro6 visional approval under this section may be approved 

7 only if the Secretary determines that— 

8 ‘‘(A) there is substantial evidence of safety 

9 for the drug, such that there is evidence con10 sisting of adequate and well-controlled inves11 tigations, including clinical investigations, by 

12 experts qualified by scientific training and expe13 rience to evaluate the safety of the drug in14 volved, on the basis of which it could fairly and 

15 responsibly be concluded that the drug will have 

16 the effect it purports or is represented to have 

17 under the conditions of use prescribed, rec18 ommended, or suggested in the labeling or pro19 posed labeling; and 

20 ‘‘(B) there is relevant early evidence based 

21 on adequate and well-controlled investigations, 

22 including early-stage clinical investigations, to 

23 establish that— 

24 ‘‘(i) the drug provides a positive 

25 therapeutic outcome; and 


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1 ‘‘(ii) the outcome of the drug is con2 sistent with or greater than currently mar3 keted on-label therapies, with equal or 

4 fewer side effects, if there are currently 

5 marketed on-label therapies. 

6 ‘‘(2) PROTOCOLS.—The Secretary shall promul7 gate rules that establish the appropriate protocols 

8 for a sponsor of an application for provisional ap9 proval under this section and the Commissioner to 

10 follow to enable rolling, real-time, mid-trial submis11 sion while preserving the integrity of the ongoing 

12 trial and without penalizing the sponsor for making 

13 use of this pathway. 

14 ‘‘(3) REAL WORLD EVIDENCE.—The Secretary 

15 shall allow the use of real world evidence (as defined 

16 in section 505F(b)), including real world data used 

17 to generate real world evidence, to support an appli18 cation for provisional approval under this section, 

19 and to fulfill the follow-up requirements and support 

20 applications for full approval as described under sec21 tion 505 or section 351 of the Public Health Service 

22 Act, as applicable. 

23 ‘‘(4) USE OF SCIENTIFICALLY SUBSTANTIATED

24 SURROGATES.— 


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1 ‘‘(A) IN GENERAL.—The sponsor of an ap2 plication for provisional approval under this sec3 tion may use scientifically substantiated surro4 gates to support such application. 

5 ‘‘(B) DEFINITION.—In subparagraph (A), 

6 the term ‘scientifically substantiated surrogates’ 

7 means surrogate endpoints to predict clinical 

8 benefit other than such endpoints previously 

9 validated by the Secretary, based on— 

10 ‘‘(i) epidemiologic, therapeutic, patho11 physiologic, or other evidence; or 

12 ‘‘(ii) an effect on a clinical endpoint 

13 other than survival or irreversible mor14 bidity of interest. 

15 ‘‘(d) TRANSPARENCY AND PATIENT MONITORING

16 REQUIREMENTS.— 

17 ‘‘(1) REGISTRIES.— 

18 ‘‘(A) IN GENERAL.—The sponsor of a drug 

19 provisionally approved under this section shall 

20 require that all patients who use such drug par21 ticipate in an observational registry and consent 

22 to the sponsor’s collection, and submission to 

23 the registry, of data related to the patient’s use 

24 of such drug until such drug receives full ap25 proval under section 505 or section 351 of the 


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1 Public Health Service Act, or the provisional 

2 approval is rescinded. 

3 ‘‘(B) REQUIREMENTS FOR REGISTRIES.— 

4 An observational registry described in subpara5 graph (A) may be run by a third party, such as 

6 a government, for profit, or non-profit organiza7 tion, and shall track all patients who use the 

8 provisionally approved drug. 

9 ‘‘(C) ACCESSIBILITY.—An observational 

10 registry described in subparagraph (A) shall be 

11 easily accessible for— 

12 ‘‘(i) all patients who are participating 

13 in any registry related to a provisionally 

14 approved drug that allows for easy, unre15 stricted (or transparent) access for such 

16 patients to their patient data and related 

17 information regarding their usage of the 

18 provisionally approved drug; and 

19 ‘‘(ii) approved researchers and med20 ical professionals who may access data 

21 maintained in the registry, which access 

22 shall be for public health research and only 

23 in a de-identified, aggregated manner. 


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1 ‘‘(2) FUNDING.—An observational registry 

2 under this subsection shall be maintained, as appli3 cable— 

4 ‘‘(A) by the sponsor of the drug provision5 ally approved under this section that is the sub6 ject of the registry; 

7 ‘‘(B) by a third party, such as a govern8 ment, for profit, or nonprofit organization; or 

9 ‘‘(C) the Federal Government, in the case 

10 of any drug so approved that is intended to 

11 treat a disease or condition associated with an 

12 epidemic or pandemic. 

13 ‘‘(3) SPONSOR REQUIREMENTS.— 

14 ‘‘(A) IN GENERAL.—For any drug applica15 tion provisionally approved under this section, 

16 the Secretary shall notify the sponsor of the 

17 exact data such sponsor is required to submit 

18 to an observational registry. 

19 ‘‘(B) ANNUAL REVIEW OF THE REGISTRY; 

20 PENALTIES.—The Secretary shall conduct an 

21 annual review of observational registries estab22 lished under this subsection. If, at such an an23 nual review, less than 90 percent of patients are 

24 participating in an observational registry with 

25 respect to a drug approved under this section, 


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1 the Secretary shall issue to the sponsor of such 

2 drug a civil monetary penalty of not more than 

3 $100,000. If a violation of this section is not 

4 corrected within the 30-day period following no5 tification, the sponsor shall, in addition to any 

6 penalty under this subparagraph be subject to 

7 a civil monetary penalty of not more than 

8 $10,000 for each day of the violation after such 

9 period until the violation is corrected. If appli10 cation patient participation in an observational 

11 registry is not at or above 90 percent within 6 

12 months of issuance of such penalty, the provi13 sional approval shall be withdrawn. 

14 ‘‘(4) ANNUAL REPORT TO CONGRESS.—The 

15 Secretary shall submit an annual report to Congress 

16 on all drugs granted provisional approval under this 

17 section. Such report shall include— 

18 ‘‘(A) the number of patients treated with 

19 each such drug, and the number of patients 

20 tracked in an observational registry with re21 spect to each such drug; 

22 ‘‘(B) a discussion of the minimum amount 

23 of data required in the registries, including pa24 tient treatments and uses, length of use, side 

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1 entifically substantiated surrogates, scan re2 sults, cause of death and how long the patient 

3 lived, and adverse drug effects; 

4 ‘‘(C) a list of all such drugs for which an 

5 application for full approval under section 505 

6 of this Act or section 351 of the Public Health 

7 Service Act, or an application for an extension 

8 of provisional approval under this section, has 

9 been submitted; and 

10 ‘‘(D) a list of all applications denied provi11 sional approval under this section, together with 

12 an explanation for the decisions to deny each 

13 such application. 

14 ‘‘(e) WITHDRAWAL OF PROVISIONAL APPROVAL.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall with16 draw provisional approval under this section if there 

17 are a significant number of patients who experience 

18 serious adverse effects, compared to the other cur19 rently marketed on-label therapies that are available 

20 for the applicable disease or condition. 

21 ‘‘(2) EFFECT OF WITHDRAWAL.—If a provi22 sional approval is withdrawn under this subsection, 

23 the sponsor may not make the drug available to any 

24 new patients, but may be allowed to continue to 

25 make such drug available to patients who started 


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1 taking the drug prior to the date of withdrawal, for 

2 as long a period as dictated by patient need, as de3 termined by the Secretary. 

4 ‘‘(f) TRANSPARENCY.—Any scientific, medical, aca5 demic, or health care journal publishing an article explain6 ing, releasing, conveying or announcing research findings 

7 which were funded by the Department of Health and 

8 Human Services shall be prohibited from publishing such 

9 research unless— 

10 ‘‘(1) such article conveying research findings is 

11 made publicly available on the journal’s internet 

12 website without a paywall or charge not later than 

13 3 months after the date on which such article was 

14 first provided to subscribers of such journal (or first 

15 made available for purchase); and 

16 ‘‘(2) the article’s author or researcher or au17 thor’s institution (or, in the case of multiple authors, 

18 researchers, or institutions, all such authors, re19 searchers, or institutions) received less than 30 per20 cent of funding for such research from the Depart21 ment of Health and Human Services throughout the 

22 period of time the research was conducted. 

23 ‘‘(g) INFORMED CONSENT.—Prior to receiving a drug 

24 provisionally approved under this section, the sponsor of 

25 the drug shall receive from each patient, or the patient’s 


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1 representative, informed consent, through a signed in2 formed consent form, acknowledging that such patient un3 derstands that the drug did not undergo the usual process 

4 for full approval of a drug by the Food and Drug Adminis5 tration, and that such patient is willing to accept the risks 

6 involved in taking such drug. 

7 ‘‘(h) POSTMARKET CONTROLS AND LABELING.— 

8 ‘‘(1) FDA ANNUAL REVIEW OF REGISTRY

9 DATA.—The Secretary shall annually review the data 

10 made available through the observational registries 

11 under subsection (d) and make a determination re12 garding whether the side effect profile of any drug 

13 approved under this pathway does not support the 

14 benefit provided, or the data shows the benefit is 

15 less than the benefits offered through other, fully 

16 approved drugs. 

17 ‘‘(2) LABELING.—The sponsor of the provision18 ally approved drug shall ensure that all labeling and 

19 promotional materials for the drug bear the state20 ment ‘provisionally approved by the FDA pending a 

21 full demonstration of effectiveness under application 

22 number llllll’ (specifying the application 

23 number assigned by the Secretary in place of the 

24 blank). All promotional, educational and marketing 

25 materials for provisionally approved products shall 


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1 be reviewed and approved by the Secretary before 

2 such materials are distributed. 

3 ‘‘(3) RESCISSION OF PROVISIONAL AP4 PROVAL.—If the Secretary determines that the side 

5 effect profile of any drug included in such observa6 tional registries does not support the benefit pro7 vided by such drug, or that the data shows that the 

8 benefit is less than the benefits offered through 

9 other, fully approved drugs, the Secretary shall re10 scind such provisional approval. 

11 ‘‘(i) DURATION OF PROVISIONAL APPROVAL; RE12 QUIREMENT TO BRING DRUG TO MARKET.— 

13 ‘‘(1) DURATION; RENEWALS.—The period of 

14 provisional approval for a drug approved under this 

15 section is effective for a 2-year period. The sponsor 

16 may request renewal for provisional approval status 

17 for up to 3 subsequent 2-year periods by the Sec18 retary. Provisional approval status with respect to a 

19 drug shall not exceed a total of 6 years from the ini20 tial date the sponsor was awarded provisional ap21 proval status. 

22 ‘‘(2) MARKETING REQUIREMENT.—If any drug 

23 that receives provisional approval status under this 

24 section is not brought to market within 180 days of 

25 the approval, such approval shall be rescinded. 


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1 ‘‘(j) LIMITATION ON LIABILITY.—With respect to any 

2 claim under State law alleging that a drug sold or other3 wise made available pursuant to a grant of provisional ap4 proval under this section is unsafe or ineffective, no liabil5 ity in a cause of action shall lie against a sponsor or manu6 facturer, unless the relevant conduct constitutes reckless 

7 or willful misconduct, gross negligence, or an intentional 

8 tort under any applicable State law. 

9 ‘‘(k) APPLYING FOR FULL APPROVAL.— 

10 ‘‘(1) IN GENERAL.—Except as provided under 

11 paragraph (2), the sponsor of a drug granted provi12 sional approval pursuant to this section may, at any 

13 point, submit an application for full approval of such 

14 drug under section 505 of this Act or section 351 

15 of the Public Health Service Act, as applicable. 

16 ‘‘(2) EFFECT OF RECESSION ON APPROVAL AND

17 AUTOMATIC APPROVAL.— 

18 ‘‘(A) IN GENERAL.—The sponsor of a drug 

19 granted provisional approval pursuant to this 

20 section that has been rescinded under sub21 section (h)(3), may submit an application for 

22 full approval of such drug under section 505 of 

23 this Act or section 351 of the Public Health 

24 Service Act at any time. 


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1 ‘‘(B) AUTOMATIC APPROVAL.—Such full 

2 approval may be awarded at any time for any 

3 drug granted provisional approval pursuant to 

4 this section if the sponsor of the drug estab5 lishes a 15 percent improvement in an impor6 tant endpoint, including surrogate endpoints 

7 not validated by the Food and Drug Adminis8 tration, compared to a standard drug. 

9 ‘‘(3) REAL-TIME EPIDEMIC AND PANDEMIC VAC10 CINE APPROVAL.— 

11 ‘‘(A) IN GENERAL.—In the case of a vac12 cine developed in response to an epidemic or 

13 pandemic, including COVID–19, the Secretary 

14 shall share data information regarding the ap15 proval of the vaccine with the Advisory Com16 mittee on Immunization Practices of the Cen17 ters for Disease Control and Prevention as the 

18 review nears completion. 

19 ‘‘(B) EVALUATION.—Any vaccine that has 

20 been approved by the Secretary for an epidemic 

21 or pandemic-related disease, including COVID– 

22 19, shall be evaluated by the Advisory Com23 mittee on Immunization Practices of the Cen24 ters for Disease Control and Prevention not 

25 later than 1 week after the date of submission 


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1 to the Advisory Committee by the Secretary of 

2 the vaccine. 

3 ‘‘(l) PATIENT ADVOCATE GENERAL.—Not later than 

4 6 months after the date of enactment of the Promising 

5 Pathway Act, the Secretary shall establish within the Of6 fice of the Commissioner, the position of Patient Advocate 

7 General, who shall provide assistance to patients and their 

8 families who use drugs under evaluation in this pathway 

9 or drugs reviewed or approved under section 505 or sec10 tion 351 of the Public Health Service Act. Such assistance 

11 shall include providing bi-informational communication 

12 about maintaining patient health, delivery of proper in13 formed consent, participating in clinical investigations, 

14 completing required documentation in order to participate 

15 in the applicable programs, and providing other informa16 tion.’’. 

17 (b) CONFORMING AMENDMENT.—Section 505(a) of 

18 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

19 355(a)) is amended by inserting ‘‘, or there is in effect 

20 a provisional approval under section 524B with respect to 

21 such drug’’ before the period. 

22 (c) REIMBURSEMENT.— 

23 (1) PRIVATE HEALTH INSURERS.—Section 

24 2719A of the Public Health Service Act (42 U.S.C. 


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1 300gg–19a) is amended by adding at the end the 

2 following: 

3 ‘‘(e) TREATMENT OF CERTAIN DRUGS.—A group 

4 health plan or health insurance issuer of group or indi5 vidual health insurance coverage shall not deny coverage 

6 of any drug provisionally approved under section 524B of 

7 the Federal Food, Drug, and Cosmetic Act on the basis 

8 of such drug being experimental. In determining coverage 

9 under the applicable plan or coverage, a group health plan 

10 or health insurance issuer shall treat a drug provisionally 

11 approved under such section in the same manner as such 

12 plan or coverage would treat a drug approved under sec13 tion 505 of the Federal Food, Drug, and Cosmetic Act 

14 or section 351 of this Act. Nothing in this subsection shall 

15 be construed to require a group health plan or health in16 surance issuer to cover any specific drug provisionally ap17 proved under such section 524B.’’. 

18 (2) FEDERAL HEALTH CARE PROGRAMS.—The 

19 requirement under subsection (e) of section 2719A 

20 of the Public Health Service Act (as added by para21 graph (1)) shall apply with respect to coverage de22 terminations under a Federal health care program 

23 (as defined in section 1128B(f) of the Social Secu24 rity Act (42 U.S.C. 1320a–7b(f))) in the same manVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00308 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 ner such requirement applies under such subsection 

2 (e). 

3 (3) CONFORMING AMENDMENT.—Section 

4 1927(k)(2)(A)(i) of the Social Security Act (42 

5 U.S.C. 1396r–8(k)(2)(A)(i)) is amended— 

6 (A) by striking ‘‘or which’’ and inserting ‘‘, 

7 which’’; and 

8 (B) by inserting ‘‘, or which is provision9 ally approved under section 524B of such Act’’ 

10 before the semicolon. 

11 SEC. 347. CONSOLIDATING EXCLUSIVITY PERIODS FOR 

12 DRUGS TREATING RARE DISEASES AND CON13 DITIONS. 

14 (a) IN GENERAL.—Subsection (a) of section 527 of 

15 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

16 360cc) is amended to read as follows: 

17 ‘‘(a) EXCLUSIVITY.— 

18 ‘‘(1) IN GENERAL.—Except as provided in sub19 section (b), if the Secretary approves an application 

20 filed pursuant to section 505, or issues a license 

21 under section 351 of the Public Health Service Act, 

22 for a drug designated under section 526 for a rare 

23 disease or condition, the Secretary may not approve 

24 an application filed pursuant to section 505, or issue 

25 a license under section 351 of the Public Health 


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1 Service Act, for the same drug for the same disease 

2 or condition for a person who is not the holder of 

3 such approved application or of such license until 

4 the expiration of the exclusivity period described in 

5 paragraph (2). 

6 ‘‘(2) EXCLUSIVITY PERIOD DESCRIBED.—The 

7 exclusivity period described in this paragraph, with 

8 respect to a drug designated under section 526 for 

9 a rare disease or condition, is— 

10 ‘‘(A) a single 7-year period of exclusivity 

11 with respect to the first designation of such 

12 drug under such section for that rare disease or 

13 condition; or 

14 ‘‘(B) in the case of a drug that has pre15 viously received a period of exclusivity under 

16 paragraph (1), a single 3-year period of exclu17 sivity with respect to any subsequent designa18 tion of such drug under such section for any 

19 other rare disease or condition. 

20 ‘‘(3) LIMITATION.—In the case of a drug that 

21 has received two periods of exclusivity pursuant to 

22 paragraph (1), no additional exclusivity period under 

23 this section is available with respect to such drug, 

24 regardless of whether such drug has been designated 

25 under section 526 for a rare disease or condition 


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1 that is distinct from the rare disease or condition for 

2 which such exclusivity periods were granted.’’. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) Section 505(j)(5)(B)(iv)(II)(dd)(AA) of the 

5 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

6 360cc) is amended by striking ‘‘7-year period’’ and 

7 inserting ‘‘exclusivity period’’. 

8 (2) Section 505A(b)(1)(A)(ii) of the Federal 

9 Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is 

10 amended by striking ‘‘rather than seven years;’’ and 

11 inserting ‘‘, or three years and six months, rather 

12 than seven years or three years, respectively;’’. 

13 (3) Section 505A(c)(1)(A)(ii) of the Federal 

14 Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is 

15 amended by striking ‘‘rather than seven years;’’ and 

16 inserting ‘‘, or three years and six months, rather 

17 than seven years or three years, respectively;’’. 

18 (4) Section 505E(a) of the Federal Food, Drug, 

19 and Cosmetic Act (21 U.S.C. 360cc) is amended by 

20 striking ‘‘7-year period’’ and inserting ‘‘exclusivity 

21 periods’’. 

22 (5) Section 527(b) of the Federal Food, Drug, 

23 and Cosmetic Act (21 U.S.C. 360cc) is amended by 

24 striking ‘‘the 7-year period’’ and inserting ‘‘any ex25 clusivity period’’. 


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1 (6) Section 351(m)(2)(B) of the Public Health 

2 Service Act (42 U.S.C. 262) is amended by striking 

3 ‘‘rather than 7 years’’ and inserting ‘‘or 3 years and 

4 6 months, rather than 7 years or 3 years, respec5 tively’’. 

6 (7) Section 351(m)(3)(B) of the Public Health 

7 Service Act (42 U.S.C. 262) is amended by striking 

8 ‘‘rather than 7 years’’ and inserting ‘‘or 3 years and 

9 6 months, rather than 7 years or 3 years, respec10 tively’’. 

11 SEC. 348. EXCLUSIVITY PERIOD FOR BRAND NAME BIO12 LOGICAL PRODUCTS. 

13 (a) IN GENERAL.—Section 351(k)(7)(A) of the Pub14 lic Health Service Act (42 U.S.C. 262(k)(7)(A)) is amend15 ed by striking ‘‘12 years’’ and inserting ‘‘5 years’’. 

16 (b) CONFORMING CHANGES.—Paragraphs (2)(A) and 

17 (3)(A) of section 351(m) of the Public Health Service Act 

18 (42 U.S.C. 262(m)) is amended by striking ‘‘12 years’’ 

19 each place it appears and inserting ‘‘5 years’’. 

20 (c) APPLICABILITY.—This Act and the amendments 

21 made by this Act apply only with respect to a biological 

22 product for which the reference product (as such term is 

23 used in section 351 of the Public Health Service Act (42 

24 U.S.C. 262)) is licensed under subsection (a) of such sec25 tion on or after the date of enactment of this Act. 


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1 SEC. 349. PROTECTING ACCESS TO BIOLOGICAL PRODUCTS. 

2 Section 351(k)(7) of the Public Health Service Act 

3 (42 U.S.C. 262(k)(7)) is amended by adding at the end 

4 the following: 

5 ‘‘(D) DEEMED LICENSES.— 

6 ‘‘(i) NO ADDITIONAL EXCLUSIVITY

7 THROUGH DEEMING.—An approved appli8 cation that is deemed to be a license for a 

9 biological product under this section pursu10 ant to section 7002(e)(4) of the Biologics 

11 Price Competition and Innovation Act of 

12 2009 shall not be treated as having been 

13 first licensed under subsection (a) for pur14 poses of subparagraphs (A) and (B). 

15 ‘‘(ii) APPLICATION OF LIMITATIONS

16 ON EXCLUSIVITY.—Subparagraph (C) shall 

17 apply with respect to a reference product 

18 referred to in such subparagraph that was 

19 the subject of an approved application that 

20 was deemed to be a license pursuant to 

21 section 7002(e)(4) of the Biologics Price 

22 Competition and Innovation Act of 2009. 

23 ‘‘(iii) APPLICABILITY.—The exclu24 sivity periods described in section 527, sec25 tion 505A(b)(1)(A)(ii), and section 

26 505A(c)(1)(A)(ii) of the Federal Food, 


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1 Drug, and Cosmetic Act shall continue to 

2 apply to a biological product after an ap3 proved application for the biological prod4 uct is deemed to be a license for the bio5 logical product under subsection (a) pursu6 ant to section 7002(e)(4) of the Biologics 

7 Price Competition and Innovation Act of 

8 2009.’’. 

9 SEC. 350. STREAMLINING THE TRANSITION OF BIOLOGICAL 

10 PRODUCTS. 

11 Section 7002(e)(4) of the Biologics Price Competition 

12 and Innovation Act of 2009 (Public Law 111–148) is 

13 amended by adding at the end the following: ‘‘With respect 

14 to an application for a biological product submitted under 

15 section 505(b) of the Federal Food, Drug, and Cosmetic 

16 Act (21 U.S.C. 355(b)) with a filing date that is not later 

17 than September 23, 2019, and that does not receive final 

18 approval on or before March 23, 2020, such application 

19 shall be deemed to be withdrawn and the Secretary shall 

20 refund the fee paid under section 736(a)(1)(B) of the Fed21 eral Food, Drug, and Cosmetic Act (21 U.S.C. 

22 379h(a)(1)(B)). Notwithstanding any such withdrawal of 

23 the drug application, the Secretary shall consider any pre24 viously conducted scientific review and accelerate review 

25 of any such subsequent application with respect to such 


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1 biological product under section 351 of the Public Health 

2 Service Act (42 U.S.C. 262). The Secretary shall provide 

3 additional assistance to the sponsor or manufacturer of 

4 such application.’’. 

5 SEC. 351. REGULATION OF MANUFACTURER-SPONSORED 

6 COPAY CONTRIBUTIONS. 

7 Notwithstanding any other provision of law, the Sec8 retary of Health and Human Services may establish a 

9 mechanism to regulate drug manufacturers’ financial con10 tributions to patient out-of-pocket costs, such as drug co11 pays. 

12 SEC. 352. ANTITRUST EXEMPTION FOR PRIVATE HEALTH 

13 INSURER ISSUERS TO NEGOTIATE WHOLE14 SALE ACQUISITION PRICES OF PRESCRIP15 TION DRUGS PURCHASED FROM DRUG MANU16 FACTURERS. 

17 (a) EXEMPTION.—It shall not be a violation of the 

18 antitrust laws for one or more private health insurer 

19 issuers or their designated agents to jointly negotiate 

20 wholesale acquisition prices of a prescription drug with a 

21 manufacturer of a prescription drug with regards to the 

22 reimbursement policies of the insurers of the manufactur23 er’s drugs so long as no one single wholesale acquisition 

24 price is jointly determined between the insurance issuers 

25 or their designated agents. 


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1 (b) DEFINITIONS.—For purposes of this section: 

2 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

3 laws’’ has the meaning given it in subsection (a) of 

4 the 1st section of the Clayton Act (15 U.S.C. 12(a)), 

5 except that such term includes section 5 of the Fed6 eral Trade Commission Act (15 U.S.C. 45) to the 

7 extent such section 5 applies to unfair methods of 

8 competition. 

9 (2) HEALTH INSURANCE ISSUER.—The term 

10 ‘‘health insurance issuer’’ means an insurance com11 pany, insurance service, or insurance organization 

12 (including a health maintenance organization, as de13 fined in subparagraph (C)) which is licensed to en14 gage in the business of insurance in a State and 

15 which is subject to State law which regulates insur16 ance (within the meaning of section 514(b)(2) of the 

17 Employee Retirement Income Security Act of 1974 

18 (29 U.S.C. 1144(b)(2))). Such term does not include 

19 a group health plan. 

20 (3) HEALTH MAINTENANCE ORGANIZATION.— 

21 The term ‘‘health maintenance organization’’ 

22 means— 

23 (A) a Federally qualified health mainte24 nance organization (as defined in section 

25 300e(a) of title 42 of the United States Code), 


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1 (B) an organization recognized under State 

2 law as a health maintenance organization, or 

3 (C) a similar organization regulated under 

4 State law for solvency in the same manner and 

5 to the same extent as such a health mainte6 nance organization. 

7 (4) MANUFACTURER.—The term ‘‘manufac8 turer’’ means anyone who is engaged in manufac9 turing, preparing, propagating, compounding, proc10 essing, packaging, repackaging, or labeling of a pre11 scription drug. 

12 (5) PRESCRIPTION DRUG.—The term ‘‘prescrip13 tion drug’’ means any human drug required by Fed14 eral law or regulation to be dispensed only by a pre15 scription, including finished dosage forms and active 

16 ingredients subject to section 503(b) of the Federal 

17 Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)). 

18 (c) EFFECTIVE DATE.—This section shall take effect 

19 on the date of the enactment of this Act but shall not 

20 apply with respect to conduct that occurs before such date. 

21 SEC. 353. BIOLOGICAL PRODUCT INNOVATION. 

22 Section 351(j) of the Public Health Service Act (42 

23 U.S.C. 262(j)) is amended— 

24 (1) by striking ‘‘except that a product’’ and in25 serting ‘‘except that— 


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1 ‘‘(1) a product’’; 

2 (2) by striking ‘‘Act.’’ and inserting ‘‘Act; and’’; 

3 and 

4 (3) by adding at the end the following: 

5 ‘‘(2) no requirement under such Act regarding 

6 an official compendium (as defined in section 201(j) 

7 of such Act), or other reference in such Act to an 

8 official compendium (as so defined), shall apply with 

9 respect to a biological product subject to regulation 

10 under this section.’’. 

11 SEC. 354. CLARIFYING THE MEANING OF NEW CHEMICAL 

12 ENTITY. 

13 (a) IN GENERAL.—Chapter V of the Federal Food, 

14 Drug, and Cosmetic Act is amended— 

15 (1) in section 505 (21 U.S.C. 355)— 

16 (A) in subsection (c)(3)(E), by striking 

17 ‘‘active ingredient (including any ester or salt of 

18 the active ingredient)’’ each place it appears 

19 and inserting ‘‘active moiety (as defined by the 

20 Secretary in section 314.3 of title 21, Code of 

21 Federal Regulations (or any successor regula22 tions))’’; 

23 (B) in subsection (j)(5)(F), by striking 

24 ‘‘active ingredient (including any ester or salt of 

25 the active ingredient)’’ each place it appears 


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1 and inserting ‘‘active moiety (as defined by the 

2 Secretary in section 314.3 of title 21, Code of 

3 Federal Regulations (or any successor regula4 tions))’’; 

5 (C) in subsection (l)(2)(A)— 

6 (i) by amending clause (i) to read as 

7 follows: 

8 ‘‘(i) not later than 30 days after the date 

9 of approval of such applications— 

10 ‘‘(I) for a drug, no active moiety (as 

11 defined by the Secretary in section 314.3 

12 of title 21, Code of Federal Regulations (or 

13 any successor regulations)) of which has 

14 been approved in any other application 

15 under this section; or 

16 ‘‘(II) for a biological product, no ac17 tive ingredient of which has been approved 

18 in any other application under section 351 

19 of the Public Health Service Act; and’’; 

20 and 

21 (ii) in clause (ii), by inserting ‘‘or bio22 logical product’’ before the period; 

23 (D) by amending subsection (s) to read as 

24 follows: 


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1 ‘‘(s) REFERRAL TO ADVISORY COMMITTEE.—The 

2 Secretary shall— 

3 ‘‘(1) refer a drug or biological product to a 

4 Food and Drug Administration advisory committee 

5 for review at a meeting of such advisory committee 

6 prior to the approval of such drug or biological if it 

7 is— 

8 ‘‘(A) a drug, no active moiety (as defined 

9 by the Secretary in section 314.3 of title 21, 

10 Code of Federal Regulations (or any successor 

11 regulations)) of which has been approved in any 

12 other application under this section; or 

13 ‘‘(B) a biological product, no active ingre14 dient of which has been approved in any other 

15 application under section 351 of the Public 

16 Health Service Act; or 

17 ‘‘(2) if the Secretary does not refer a drug or 

18 biological product described in paragraph (1) to a 

19 Food and Drug Administration advisory committee 

20 prior to such approval, provide in the action letter 

21 on the application for the drug or biological product 

22 a summary of the reasons why the Secretary did not 

23 refer the drug or biological product to an advisory 

24 committee prior to approval.’’; and 


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1 (E) in subsection (u)(1), in the matter pre2 ceding subparagraph (A)— 

3 (i) by striking ‘‘active ingredient (in4 cluding any ester or salt of the active in5 gredient)’’ and inserting ‘‘active moiety (as 

6 defined by the Secretary in section 314.3 

7 of title 21, Code of Federal Regulations (or 

8 any successor regulations))’’; and 

9 (ii) by striking ‘‘same active ingre10 dient’’ and inserting ‘‘same active moiety’’; 

11 (2) in section 512(c)(2)(F) (21 U.S.C. 

12 360b(c)(2)(F)), by striking ‘‘active ingredient (in13 cluding any ester or salt of the active ingredient)’’ 

14 each place it appears and inserting ‘‘active moiety 

15 (as defined by the Secretary in section 314.3 of title 

16 21, Code of Federal Regulations (or any successor 

17 regulations))’’; 

18 (3) in section 524(a)(4) (21 U.S.C. 

19 360n(a)(4)), by amending subparagraph (C) to read 

20 as follows: 

21 ‘‘(C) is for— 

22 ‘‘(i) a human drug, no active moiety 

23 (as defined by the Secretary in section 

24 314.3 of title 21, Code of Federal Regula25 tions (or any successor regulations)) of 


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1 which has been approved in any other ap2 plication under section 505(b)(1); or 

3 ‘‘(ii) a biological product, no active in4 gredient of which has been approved in any 

5 other application under section 351 of the 

6 Public Health Service Act.’’; 

7 (4) in section 529(a)(4) (21 U.S.C. 

8 360ff(a)(4)), by striking subparagraphs (A) and (B) 

9 and inserting the following: 

10 ‘‘(A) is for a drug or biological product 

11 that is for the prevention or treatment of a rare 

12 pediatric disease; 

13 ‘‘(B)(i) is for such a drug— 

14 ‘‘(I) that contains no active moiety (as 

15 defined by the Secretary in section 314.3 

16 of title 21, Code of Federal Regulations (or 

17 any successor regulations)) that has been 

18 previously approved in any other applica19 tion under subsection (b)(1), (b)(2), or (j) 

20 of section 505; and 

21 ‘‘(II) that is the subject of an applica22 tion submitted under section 505(b)(1); or 

23 ‘‘(ii) or is for such a biological product— 

24 ‘‘(I) that contains no active ingredient 

25 that has been previously approved in any 


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1 other application under section 351(a) or 

2 351(k) of the Public Health Service Act; 

3 and 

4 ‘‘(II) that is the subject of an applica5 tion submitted under section 351(a) of the 

6 Public Health Service Act;’’; and 

7 (5) in section 565A(a)(4) (21 U.S.C. 360bbb– 

8 4a(a)(4)), by amending subparagraph (D) to read as 

9 follows: 

10 ‘‘(D) is for— 

11 ‘‘(i) a human drug, no active moiety 

12 (as defined by the Secretary in section 

13 314.3 of title 21, Code of Federal Regula14 tions (or any successor regulations)) of 

15 which has been approved in any other ap16 plication under section 505(b)(1); or 

17 ‘‘(ii) a biological product, no active in18 gredient of which has been approved in any 

19 other application under section 351 of the 

20 Public Health Service Act.’’. 

21 (b) TECHNICAL CORRECTIONS.—Chapter V of the 

22 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 

23 et seq.) is amended— 

24 (1) in section 505 (21 U.S.C. 355)— 


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1 (A) in subsection (c)(3)(E), by repealing 

2 clause (i); and 

3 (B) in subsection (j)(5)(F), by repealing 

4 clause (i); and 

5 (2) in section 505A(c)(1)(A)(i)(II) (21 U.S.C. 

6 355a(c)(1)(A)(i)), by striking ‘‘(c)(3)(D)’’ and in7 serting ‘‘(c)(3)(E)’’. 

8 SEC. 355. PROMPT APPROVAL OF DRUGS RELATED TO 

9 SAFETY INFORMATION. 

10 Section 505 of the Federal Food, Drug, and Cosmetic 

11 Act (21 U.S.C. 355) is amended by adding at the end the 

12 following: 

13 ‘‘(z) PROMPT APPROVAL OF DRUGS WHEN SAFETY

14 INFORMATION IS ADDED TO LABELING.— 

15 ‘‘(1) GENERAL RULE.—A drug for which an ap16 plication has been submitted or approved under sub17 section (b)(2) or (j) shall not be considered ineligible 

18 for approval under this section or misbranded under 

19 section 502 on the basis that the labeling of the 

20 drug omits safety information, including contra21 indications, warnings, precautions, dosing, adminis22 tration, or other information pertaining to safety, 

23 when the omitted safety information is protected by 

24 exclusivity under clause (iii) or (iv) of subsection 

25 (j)(5)(F), clause (iii) or (iv) of subsection (c)(3)(E), 


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1 or section 527(a), or by an extension of such exclu2 sivity under section 505A or 505E. 

3 ‘‘(2) LABELING.—Notwithstanding clauses (iii) 

4 and (iv) of subsection (j)(5)(F), clauses (iii) and (iv) 

5 of subsection (c)(3)(E), or section 527, the Sec6 retary shall require that the labeling of a drug ap7 proved pursuant to an application submitted under 

8 subsection (b)(2) or (j) that omits safety information 

9 described in paragraph (1) include a statement of 

10 any appropriate safety information that the Sec11 retary considers necessary to assure safe use. 

12 ‘‘(3) AVAILABILITY AND SCOPE OF EXCLU13 SIVITY.—This subsection does not affect— 

14 ‘‘(A) the availability or scope of exclusivity 

15 or an extension of exclusivity described in sub16 paragraph (A) or (B) of section 505A(o)(3); 

17 ‘‘(B) the question of the eligibility for ap18 proval under this section of any application de19 scribed in subsection (b)(2) or (j) that omits 

20 any other aspect of labeling protected by exclu21 sivity under— 

22 ‘‘(i) clause (iii) or (iv) of subsection 

23 (j)(5)(F); 

24 ‘‘(ii) clause (iii) or (iv) of subsection 

25 (c)(3)(E); or 


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1 ‘‘(iii) section 527(a); or 

2 ‘‘(C) except as expressly provided in para3 graphs (1) and (2), the operation of this section 

4 or section 527.’’. 

5 SEC. 356. CONDITIONS OF USE FOR BIOSIMILAR BIOLOGI6 CAL PRODUCTS. 

7 Section 351(k)(2)(A)(iii) of the Public Health Service 

8 Act (42 U.S.C. 262(k)(2)(A)(iii)) is amended— 

9 (1) in subclause (I), by striking ‘‘; and’’ and in10 serting a semicolon; 

11 (2) in subclause (II), by striking the period and 

12 inserting ‘‘; and’’; and 

13 (3) by adding at the end the following: 

14 ‘‘(III) may include information to 

15 show that the conditions of use pre16 scribed, recommended, or suggested in 

17 the labeling proposed for the biological 

18 product have been previously approved 

19 for the reference product.’’. 

20 SEC. 357. EDUCATION ON BIOLOGICAL PRODUCTS. 

21 Subpart 1 of part F of title III of the Public Health 

22 Service Act (42 U.S.C. 262 et seq.) is amended by adding 

23 at the end the following: 

24 ‘‘SEC. 352A. EDUCATION ON BIOLOGICAL PRODUCTS. 

25 ‘‘(a) INTERNET WEBSITE.— 


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1 ‘‘(1) IN GENERAL.—The Secretary may main2 tain and operate an internet website to provide edu3 cational materials for health care providers, patients, 

4 and caregivers, regarding the meaning of the terms, 

5 and the standards for review and licensing of, bio6 logical products, including biosimilar biological prod7 ucts and interchangeable biosimilar biological prod8 ucts. 

9 ‘‘(2) CONTENT.—Educational materials pro10 vided under paragraph (1) may include— 

11 ‘‘(A) explanations of key statutory and 

12 regulatory terms, including ‘biosimilar’ and 

13 ‘interchangeable’, and clarification regarding 

14 the use of interchangeable biosimilar biological 

15 products; 

16 ‘‘(B) information related to development 

17 programs for biological products, including bio18 similar biological products and interchangeable 

19 biosimilar biological products and relevant clin20 ical considerations for prescribers, which may 

21 include, as appropriate and applicable, informa22 tion related to the comparability of such biologi23 cal products; 

24 ‘‘(C) an explanation of the process for re25 porting adverse events for biological products, 


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1 including biosimilar biological products and 

2 interchangeable biosimilar biological products; 

3 and 

4 ‘‘(D) an explanation of the relationship be5 tween biosimilar biological products and inter6 changeable biosimilar biological products li7 censed under section 351(k) and reference 

8 products (as defined in section 351(i)), includ9 ing the standards for review and licensing of 

10 each such type of biological product. 

11 ‘‘(3) FORMAT.—The educational materials pro12 vided under paragraph (1) may be— 

13 ‘‘(A) in formats such as webinars, con14 tinuing medical education modules, videos, fact 

15 sheets, infographics, stakeholder toolkits, or 

16 other formats as appropriate and applicable; 

17 and 

18 ‘‘(B) tailored for the unique needs of 

19 health care providers, patients, caregivers, and 

20 other audiences, as the Secretary determines 

21 appropriate. 

22 ‘‘(4) OTHER INFORMATION.—In addition to the 

23 information described in paragraph (2), the Sec24 retary shall continue to publish the following infor25 mation: 


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1 ‘‘(A) The action package of each biological 

2 product licensed under subsection (a) or (k). 

3 ‘‘(B) The summary review of each biologi4 cal product licensed under subsection (a) or (k). 

5 ‘‘(5) CONFIDENTIAL AND TRADE SECRET IN6 FORMATION.—This subsection does not authorize 

7 the disclosure of any trade secret, confidential com8 mercial or financial information, or other matter de9 scribed in section 552(b) of title 5. 

10 ‘‘(b) CONTINUING EDUCATION.—The Secretary shall 

11 advance education and awareness among health care pro12 viders regarding biological products, including biosimilar 

13 biological products and interchangeable biosimilar biologi14 cal products, as appropriate, including by developing or 

15 improving continuing medical education programs that ad16 vance the education of such providers on the prescribing 

17 of, and relevant clinical considerations with respect to, bio18 logical products, including biosimilar biological products 

19 and interchangeable biosimilar biological products.’’. 

20 SEC. 358. CONGRESSIONAL REVIEW OF THE FOOD AND 

21 DRUG ADMINISTRATION RULEMAKING. 

22 (a) CONGRESSIONAL REVIEW.—Part I of title 5, 

23 United States Code, is amended by adding at the end the 

24 following: 


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1 ‘‘CHAPTER 10—CONGRESSIONAL REVIEW 

2 OF FOOD AND DRUG ADMINISTRATION 

3 RULEMAKING 

‘‘Sec. 

‘‘920. Applicability. 

‘‘921. Congressional review. 

‘‘922. Congressional approval procedure for major rules. 

‘‘923. Congressional disapproval procedure for nonmajor rules. 

‘‘924. Definitions. 

‘‘925. Judicial review. 

‘‘926. Exemption for monetary policy. 

‘‘927. Effective date of certain rules. 

‘‘928. Regulatory cut-go requirement. 

‘‘929. Review of rules currently in effect. 

4 ‘‘§ 920. Applicability 

5 ‘‘This chapter applies in lieu of chapter 8 with respect 

6 to the Food and Drug Administration. 

7 ‘‘§ 921. Congressional review 

8 ‘‘(a)(1)(A) Before a rule may take effect, the Food 

9 and Drug Administration shall satisfy the requirements 

10 of section 928 and shall publish in the Federal Register 

11 a list of information on which the rule is based, including 

12 data, scientific and economic studies, and cost-benefit 

13 analyses, and identify how the public can access such in14 formation online, and shall submit to each House of the 

15 Congress and to the Comptroller General a report con16 taining— 

17 ‘‘(i) a copy of the rule; 

18 ‘‘(ii) a concise general statement relating to the 

19 rule; 


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1 ‘‘(iii) a classification of the rule as a major or 

2 nonmajor rule, including an explanation of the clas3 sification specifically addressing each criteria for a 

4 major rule contained within sections 924(2)(A), 

5 924(2)(B), and 924(2)(C); 

6 ‘‘(iv) a list of any other related regulatory ac7 tions intended to implement the same statutory pro8 vision or regulatory objective as well as the indi9 vidual and aggregate economic effects of those ac10 tions; and 

11 ‘‘(v) the proposed effective date of the rule. 

12 ‘‘(B) On the date of the submission of the report 

13 under subparagraph (A), the Food and Drug Administra14 tion shall submit to the Comptroller General and make 

15 available to each House of Congress— 

16 ‘‘(i) a complete copy of the cost-benefit analysis 

17 of the rule, if any, including an analysis of any jobs 

18 added or lost, differentiating between public and pri19 vate sector jobs; 

20 ‘‘(ii) the Food and Drug Administration’s ac21 tions pursuant to sections 603, 604, 605, 607, and 

22 609 of this title; 

23 ‘‘(iii) the Food and Drug Administration’s ac24 tions pursuant to sections 202, 203, 204, and 205 

25 of the Unfunded Mandates Reform Act of 1995; and 


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1 ‘‘(iv) any other relevant information or require2 ments under any other Act and any relevant Execu3 tive orders. 

4 ‘‘(C) Upon receipt of a report submitted under sub5 paragraph (A), each House shall provide copies of the re6 port to the chairman and ranking member of each stand7 ing committee with jurisdiction under the rules of the 

8 House of Representatives or the Senate to report a bill 

9 to amend the provision of law under which the rule is 

10 issued. 

11 ‘‘(2)(A) The Comptroller General shall provide a re12 port on each major rule to the committees of jurisdiction 

13 by the end of 15 calendar days after the submission or 

14 publication date. The report of the Comptroller General 

15 shall include an assessment of the Food and Drug Admin16 istration’s compliance with procedural steps required by 

17 paragraph (1)(B) and an assessment of whether the major 

18 rule imposes any new limits or mandates on private-sector 

19 activity. 

20 ‘‘(B) The Food and Drug Administration shall co21 operate with the Comptroller General by providing infor22 mation relevant to the Comptroller General’s report under 

23 subparagraph (A). 

24 ‘‘(3) A major rule relating to a report submitted 

25 under paragraph (1) shall take effect upon enactment of 


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1 a joint resolution of approval described in section 922 or 

2 as provided for in the rule following enactment of a joint 

3 resolution of approval described in section 922, whichever 

4 is later. 

5 ‘‘(4) A nonmajor rule shall take effect as provided 

6 by section 923 after submission to Congress under para7 graph (1). 

8 ‘‘(5) If a joint resolution of approval relating to a 

9 major rule is not enacted within the period provided in 

10 subsection (b)(2), then a joint resolution of approval relat11 ing to the same rule may not be considered under this 

12 chapter in the same Congress by either the House of Rep13 resentatives or the Senate. 

14 ‘‘(b)(1) A major rule shall not take effect unless the 

15 Congress enacts a joint resolution of approval described 

16 under section 922. 

17 ‘‘(2) If a joint resolution described in subsection (a) 

18 is not enacted into law by the end of 70 session days or 

19 legislative days, as applicable, beginning on the date on 

20 which the report referred to in section 921(a)(1)(A) is re21 ceived by Congress (excluding days either House of Con22 gress is adjourned for more than 3 days during a session 

23 of Congress), then the rule described in that resolution 

24 shall be deemed not to be approved and such rule shall 

25 not take effect. 


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1 ‘‘(c)(1) Notwithstanding any other provision of this 

2 section (except subject to paragraph (3)), a major rule 

3 may take effect for one 90-calendar-day period if the 

4 President makes a determination under paragraph (2) and 

5 submits written notice of such determination to the Con6 gress. 

7 ‘‘(2) Paragraph (1) applies to a determination made 

8 by the President by Executive order that the major rule 

9 should take effect because such rule is— 

10 ‘‘(A) necessary because of an imminent threat 

11 to health or safety or other emergency; 

12 ‘‘(B) necessary for the enforcement of criminal 

13 laws; 

14 ‘‘(C) necessary for national security; or 

15 ‘‘(D) issued pursuant to any statute imple16 menting an international trade agreement. 

17 ‘‘(3) An exercise by the President of the authority 

18 under this subsection shall have no effect on the proce19 dures under section 922. 

20 ‘‘(d)(1) In addition to the opportunity for review oth21 erwise provided under this chapter, in the case of any rule 

22 for which a report was submitted in accordance with sub23 section (a)(1)(A) during the period beginning on the date 

24 occurring— 


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1 ‘‘(A) in the case of the Senate, 60 session days; 

2 or 

3 ‘‘(B) in the case of the House of Representa4 tives, 60 legislative days, 

5 before the date the Congress is scheduled to adjourn a 

6 session of Congress through the date on which the same 

7 or succeeding Congress first convenes its next session, sec8 tions 922 and 923 shall apply to such rule in the suc9 ceeding session of Congress. 

10 ‘‘(2)(A) In applying sections 922 and 923 for pur11 poses of such additional review, a rule described under 

12 paragraph (1) shall be treated as though— 

13 ‘‘(i) such rule were published in the Federal 

14 Register on— 

15 ‘‘(I) in the case of the Senate, the 15th 

16 session day; or 

17 ‘‘(II) in the case of the House of Rep18 resentatives, the 15th legislative day, 

19 after the succeeding session of Congress first con20 venes; and 

21 ‘‘(ii) a report on such rule were submitted to 

22 Congress under subsection (a)(1) on such date. 

23 ‘‘(B) Nothing in this paragraph shall be construed 

24 to affect the requirement under subsection (a)(1) that a 


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1 report shall be submitted to Congress before a rule can 

2 take effect. 

3 ‘‘(3) A rule described under paragraph (1) shall take 

4 effect as otherwise provided by law (including other sub5 sections of this section). 

6 ‘‘§ 922. Congressional approval procedure for major 

7 rules 

8 ‘‘(a)(1) For purposes of this section, the term ‘joint 

9 resolution’ means only a joint resolution addressing a re10 port classifying a rule as major pursuant to section 

11 921(a)(1)(A)(iii) that— 

12 ‘‘(A) bears no preamble; 

13 ‘‘(B) bears the following title (with blanks filled 

14 as appropriate): ‘Approving the rule submitted by 

15 lll relating to lll.’; 

16 ‘‘(C) includes after its resolving clause only the 

17 following (with blanks filled as appropriate): ‘That 

18 Congress approves the rule submitted by lll re19 lating to lll.’; and 

20 ‘‘(D) is introduced pursuant to paragraph (2). 

21 ‘‘(2) After a House of Congress receives a report 

22 classifying a rule as major pursuant to section 

23 921(a)(1)(A)(iii), the majority leader of that House (or 

24 his or her respective designee) shall introduce (by request, 


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1 if appropriate) a joint resolution described in paragraph 

2 (1)— 

3 ‘‘(A) in the case of the House of Representa4 tives, within 3 legislative days; and 

5 ‘‘(B) in the case of the Senate, within 3 session 

6 days. 

7 ‘‘(3) A joint resolution described in paragraph (1) 

8 shall not be subject to amendment at any stage of pro9 ceeding. 

10 ‘‘(b) A joint resolution described in subsection (a) 

11 shall be referred in each House of Congress to the commit12 tees having jurisdiction over the provision of law under 

13 which the rule is issued. 

14 ‘‘(c) In the Senate, if the committee or committees 

15 to which a joint resolution described in subsection (a) has 

16 been referred have not reported it at the end of 15 session 

17 days after its introduction, such committee or committees 

18 shall be automatically discharged from further consider19 ation of the resolution and it shall be placed on the cal20 endar. A vote on final passage of the resolution shall be 

21 taken on or before the close of the 15th session day after 

22 the resolution is reported by the committee or committees 

23 to which it was referred, or after such committee or com24 mittees have been discharged from further consideration 

25 of the resolution. 


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1 ‘‘(d)(1) In the Senate, when the committee or com2 mittees to which a joint resolution is referred have re3 ported, or when a committee or committees are discharged 

4 (under subsection (c)) from further consideration of a 

5 joint resolution described in subsection (a), it is at any 

6 time thereafter in order (even though a previous motion 

7 to the same effect has been disagreed to) for a motion 

8 to proceed to the consideration of the joint resolution, and 

9 all points of order against the joint resolution (and against 

10 consideration of the joint resolution) are waived. The mo11 tion is not subject to amendment, or to a motion to post12 pone, or to a motion to proceed to the consideration of 

13 other business. A motion to reconsider the vote by which 

14 the motion is agreed to or disagreed to shall not be in 

15 order. If a motion to proceed to the consideration of the 

16 joint resolution is agreed to, the joint resolution shall re17 main the unfinished business of the Senate until disposed 

18 of. 

19 ‘‘(2) In the Senate, debate on the joint resolution, 

20 and on all debatable motions and appeals in connection 

21 therewith, shall be limited to not more than 2 hours, which 

22 shall be divided equally between those favoring and those 

23 opposing the joint resolution. A motion to further limit 

24 debate is in order and not debatable. An amendment to, 

25 or a motion to postpone, or a motion to proceed to the 


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1 consideration of other business, or a motion to recommit 

2 the joint resolution is not in order. 

3 ‘‘(3) In the Senate, immediately following the conclu4 sion of the debate on a joint resolution described in sub5 section (a), and a single quorum call at the conclusion of 

6 the debate if requested in accordance with the rules of the 

7 Senate, the vote on final passage of the joint resolution 

8 shall occur. 

9 ‘‘(4) Appeals from the decisions of the Chair relating 

10 to the application of the rules of the Senate to the proce11 dure relating to a joint resolution described in subsection 

12 (a) shall be decided without debate. 

13 ‘‘(e) In the House of Representatives, if any com14 mittee to which a joint resolution described in subsection 

15 (a) has been referred has not reported it to the House 

16 at the end of 15 legislative days after its introduction, 

17 such committee shall be discharged from further consider18 ation of the joint resolution, and it shall be placed on the 

19 appropriate calendar. On the second and fourth Thursdays 

20 of each month it shall be in order at any time for the 

21 Speaker to recognize a Member who favors passage of a 

22 joint resolution that has appeared on the calendar for at 

23 least 5 legislative days to call up that joint resolution for 

24 immediate consideration in the House without intervention 

25 of any point of order. When so called up a joint resolution 


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1 shall be considered as read and shall be debatable for 1 

2 hour equally divided and controlled by the proponent and 

3 an opponent, and the previous question shall be considered 

4 as ordered to its passage without intervening motion. It 

5 shall not be in order to reconsider the vote on passage. 

6 If a vote on final passage of the joint resolution has not 

7 been taken by the third Thursday on which the Speaker 

8 may recognize a Member under this subsection, such vote 

9 shall be taken on that day. 

10 ‘‘(f)(1) If, before passing a joint resolution described 

11 in subsection (a), one House receives from the other a 

12 joint resolution having the same text, then— 

13 ‘‘(A) the joint resolution of the other House 

14 shall not be referred to a committee; and 

15 ‘‘(B) the procedure in the receiving House shall 

16 be the same as if no joint resolution had been re17 ceived from the other House until the vote on pas18 sage, when the joint resolution received from the 

19 other House shall supplant the joint resolution of 

20 the receiving House. 

21 ‘‘(2) This subsection shall not apply to the House of 

22 Representatives if the joint resolution received from the 

23 Senate is a revenue measure. 

24 ‘‘(g) If either House has not taken a vote on final 

25 passage of the joint resolution by the last day of the period 


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1 described in section 921(b)(2), then such vote shall be 

2 taken on that day. 

3 ‘‘(h) This section and section 923 are enacted by 

4 Congress— 

5 ‘‘(1) as an exercise of the rulemaking power of 

6 the Senate and House of Representatives, respec7 tively, and as such is deemed to be part of the rules 

8 of each House, respectively, but applicable only with 

9 respect to the procedure to be followed in that 

10 House in the case of a joint resolution described in 

11 subsection (a) and superseding other rules only 

12 where explicitly so; and 

13 ‘‘(2) with full recognition of the Constitutional 

14 right of either House to change the rules (so far as 

15 they relate to the procedure of that House) at any 

16 time, in the same manner and to the same extent as 

17 in the case of any other rule of that House. 

18 ‘‘§ 923. Congressional disapproval procedure for 

19 nonmajor rules 

20 ‘‘(a) For purposes of this section, the term ‘joint res21 olution’ means only a joint resolution introduced in the 

22 period beginning on the date on which the report referred 

23 to in section 921(a)(1)(A) is received by Congress and 

24 ending 60 days thereafter (excluding days either House 

25 of Congress is adjourned for more than 3 days during a 


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1 session of Congress), the matter after the resolving clause 

2 of which is as follows: ‘That Congress disapproves the 

3 nonmajor rule submitted by the lll relating to 

4 lll, and such rule shall have no force or effect.’ (The 

5 blank spaces being appropriately filled in). 

6 ‘‘(b) A joint resolution described in subsection (a) 

7 shall be referred to the committees in each House of Con8 gress with jurisdiction. 

9 ‘‘(c) In the Senate, if the committee to which is re10 ferred a joint resolution described in subsection (a) has 

11 not reported such joint resolution (or an identical joint 

12 resolution) at the end of 15 session days after the date 

13 of introduction of the joint resolution, such committee may 

14 be discharged from further consideration of such joint res15 olution upon a petition supported in writing by 30 Mem16 bers of the Senate, and such joint resolution shall be 

17 placed on the calendar. 

18 ‘‘(d)(1) In the Senate, when the committee to which 

19 a joint resolution is referred has reported, or when a com20 mittee is discharged (under subsection (c)) from further 

21 consideration of a joint resolution described in subsection 

22 (a), it is at any time thereafter in order (even though a 

23 previous motion to the same effect has been disagreed to) 

24 for a motion to proceed to the consideration of the joint 

25 resolution, and all points of order against the joint resoluVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00342 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 tion (and against consideration of the joint resolution) are 

2 waived. The motion is not subject to amendment, or to 

3 a motion to postpone, or to a motion to proceed to the 

4 consideration of other business. A motion to reconsider the 

5 vote by which the motion is agreed to or disagreed to shall 

6 not be in order. If a motion to proceed to the consideration 

7 of the joint resolution is agreed to, the joint resolution 

8 shall remain the unfinished business of the Senate until 

9 disposed of. 

10 ‘‘(2) In the Senate, debate on the joint resolution, 

11 and on all debatable motions and appeals in connection 

12 therewith, shall be limited to not more than 10 hours, 

13 which shall be divided equally between those favoring and 

14 those opposing the joint resolution. A motion to further 

15 limit debate is in order and not debatable. An amendment 

16 to, or a motion to postpone, or a motion to proceed to 

17 the consideration of other business, or a motion to recom18 mit the joint resolution is not in order. 

19 ‘‘(3) In the Senate, immediately following the conclu20 sion of the debate on a joint resolution described in sub21 section (a), and a single quorum call at the conclusion of 

22 the debate if requested in accordance with the rules of the 

23 Senate, the vote on final passage of the joint resolution 

24 shall occur. 


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1 ‘‘(4) Appeals from the decisions of the Chair relating 

2 to the application of the rules of the Senate to the proce3 dure relating to a joint resolution described in subsection 

4 (a) shall be decided without debate. 

5 ‘‘(e) In the Senate, the procedure specified in sub6 section (c) or (d) shall not apply to the consideration of 

7 a joint resolution respecting a nonmajor rule— 

8 ‘‘(1) after the expiration of the 60 session days 

9 beginning with the applicable submission or publica10 tion date; or 

11 ‘‘(2) if the report under section 921(a)(1)(A) 

12 was submitted during the period referred to in sec13 tion 921(d)(1), after the expiration of the 60 session 

14 days beginning on the 15th session day after the 

15 succeeding session of Congress first convenes. 

16 ‘‘(f) If, before the passage by one House of a joint 

17 resolution of that House described in subsection (a), that 

18 House receives from the other House a joint resolution 

19 described in subsection (a), then the following procedures 

20 shall apply: 

21 ‘‘(1) The joint resolution of the other House 

22 shall not be referred to a committee. 

23 ‘‘(2) With respect to a joint resolution described 

24 in subsection (a) of the House receiving the joint 

25 resolution— 


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1 ‘‘(A) the procedure in that House shall be 

2 the same as if no joint resolution had been re3 ceived from the other House; but 

4 ‘‘(B) the vote on final passage shall be on 

5 the joint resolution of the other House. 

6 ‘‘§ 924. Definitions 

7 ‘‘For purposes of this chapter: 

8 ‘‘(1) The term ‘major rule’ means any rule of 

9 the Food and Drug Administration, including an in10 terim final rule, that the Administrator of the Office 

11 of Information and Regulatory Affairs of the Office 

12 of Management and Budget finds has resulted in or 

13 is likely to result in— 

14 ‘‘(A) an annual cost on the economy of 

15 $100,000,000 or more, adjusted annually for 

16 inflation; 

17 ‘‘(B) a major increase in costs or prices for 

18 consumers, individual industries, Federal, 

19 State, or local government agencies, or geo20 graphic regions; or 

21 ‘‘(C) significant adverse effects on competi22 tion, employment, investment, productivity, in23 novation, or on the ability of United States24 based enterprises to compete with foreign-based 

25 enterprises in domestic and export markets. 


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1 ‘‘(2) The term ‘nonmajor rule’ means any rule 

2 of the Food and Drug Administration that is not a 

3 major rule. 

4 ‘‘(3) The term ‘rule’ has the meaning given 

5 such term in section 551, except that such term does 

6 not include— 

7 ‘‘(A) any rule of particular applicability; 

8 ‘‘(B) any rule relating to agency manage9 ment or personnel; or 

10 ‘‘(C) any rule of agency organization, pro11 cedure, or practice that does not substantially 

12 affect the rights or obligations of non-agency 

13 parties. 

14 ‘‘(4) The term ‘submission date or publication 

15 date’, except as otherwise provided in this chapter, 

16 means— 

17 ‘‘(A) in the case of a major rule, the date 

18 on which the Congress receives the report sub19 mitted under section 921(a)(1); and 

20 ‘‘(B) in the case of a nonmajor rule, the 

21 later of— 

22 ‘‘(i) the date on which the Congress 

23 receives the report submitted under section 

24 921(a)(1); and 


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1 ‘‘(ii) the date on which the nonmajor 

2 rule is published in the Federal Register, if 

3 so published. 

4 ‘‘§ 925. Judicial review 

5 ‘‘(a) No determination, finding, action, or omission 

6 under this chapter shall be subject to judicial review. 

7 ‘‘(b) Notwithstanding subsection (a), a court may de8 termine whether the Food and Drug Administration has 

9 completed the necessary requirements under this chapter 

10 for a rule to take effect. 

11 ‘‘(c) The enactment of a joint resolution of approval 

12 under section 922 shall not be interpreted to serve as a 

13 grant or modification of statutory authority by Congress 

14 for the promulgation of a rule, shall not extinguish or af15 fect any claim, whether substantive or procedural, against 

16 any alleged defect in a rule, and shall not form part of 

17 the record before the court in any judicial proceeding con18 cerning a rule except for purposes of determining whether 

19 or not the rule is in effect. 

20 ‘‘§ 926. Exemption for monetary policy 

21 ‘‘Nothing in this chapter shall apply to rules that con22 cern monetary policy proposed or implemented by the 

23 Board of Governors of the Federal Reserve System or the 

24 Federal Open Market Committee. 


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1 ‘‘§ 927. Effective date of certain rules 

2 ‘‘Notwithstanding section 921, any rule other than a 

3 major rule which the Food and Drug Administration for 

4 good cause finds (and incorporates the finding and a brief 

5 statement of reasons therefore in the rule issued) that no6 tice and public procedure thereon are impracticable, un7 necessary, or contrary to the public interest, shall take ef8 fect at such time as the Food and Drug Administration 

9 determines. 

10 ‘‘§ 928. Regulatory cut-go requirement 

11 ‘‘In making any new rule, the Food and Drug Admin12 istration shall identify a rule or rules that may be amend13 ed or repealed to completely offset any annual costs of 

14 the new rule to the United States economy. Before the 

15 new rule may take effect, the Food and Drug Administra16 tion shall make each such repeal or amendment. In mak17 ing such an amendment or repeal, the Food and Drug Ad18 ministration shall comply with the requirements of sub19 chapter II of chapter 5, but the Food and Drug Adminis20 tration may consolidate proceedings under subchapter II 

21 (of chapter 5) with proceedings on the new rule. 

22 ‘‘§ 929. Review of rules currently in effect 

23 ‘‘(a) ANNUAL REVIEW.—Beginning on the date that 

24 is 6 months after the date of enactment of this section 

25 and annually thereafter for the 9 years following, the Food 

26 and Drug Administration shall designate not less than 10 


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1 percent of eligible rules made by the Food and Drug Ad2 ministration for review, and shall submit a report includ3 ing each such eligible rule in the same manner as a report 

4 under section 921(a)(1). Section 921, section 922, and 

5 section 923 shall apply to each such rule, subject to sub6 section (c) of this section. No eligible rule previously des7 ignated may be designated again. 

8 ‘‘(b) SUNSET FOR ELIGIBLE RULES NOT EX9 TENDED.—Beginning after the date that is 10 years after 

10 the date of enactment of this section, if Congress has not 

11 enacted a joint resolution of approval for that eligible rule, 

12 that eligible rule shall not continue in effect. 

13 ‘‘(c) CONSOLIDATION; SEVERABILITY.—In applying 

14 sections 921, 922, and 923 to eligible rules under this sec15 tion, the following shall apply: 

16 ‘‘(1) The words ‘take effect’ shall be read as 

17 ‘continue in effect’. 

18 ‘‘(2) Except as provided in paragraph (3), a 

19 single joint resolution of approval shall apply to all 

20 eligible rules in a report designated for a year, and 

21 the matter after the resolving clause of that joint 

22 resolution is as follows: ‘That Congress approves the 

23 rules submitted by the ll for the year ll.’ (The 

24 blank spaces being appropriately filled in). 


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1 ‘‘(3) It shall be in order to consider any amend2 ment that provides for specific conditions on which 

3 the approval of a particular eligible rule included in 

4 the joint resolution is contingent. 

5 ‘‘(4) A member of either House may move that 

6 a separate joint resolution be required for a specified 

7 rule. 

8 ‘‘(d) DEFINITION.—In this section, the term ‘eligible 

9 rule’ means a rule that is in effect as of the date of enact10 ment of this section.’’. 

11 (b) BUDGETARY EFFECTS OF RULES SUBJECT TO

12 SECTION 922 OF TITLE 5, UNITED STATES CODE.—Sec13 tion 257(b)(2) of the Balanced Budget and Emergency 

14 Deficit Control Act of 1985 is amended by adding at the 

15 end the following new subparagraph: 

16 ‘‘(E) BUDGETARY EFFECTS OF RULES

17 SUBJECT TO SECTION 922 OF TITLE 5, UNITED

18 STATES CODE.—Any rules subject to the con19 gressional approval procedure set forth in sec20 tion 922 of chapter 8 of title 5, United States 

21 Code, affecting budget authority, outlays, or re22 ceipts shall be assumed to be effective unless it 

23 is not approved in accordance with such sec24 tion.’’. 


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1 (c) GOVERNMENT ACCOUNTABILITY OFFICE STUDY

2 OF RULES.— 

3 (1) IN GENERAL.—The Comptroller General of 

4 the United States shall conduct a study to deter5 mine, as of the date of the enactment of this Act— 

6 (A) how many rules (as such term is de7 fined in section 924 of title 5, United States 

8 Code) of the Food and Drug Administration 

9 were in effect; 

10 (B) how many major rules (as such term 

11 is defined in section 924 of title 5, United 

12 States Code) of the Food and Drug Administra13 tion were in effect; and 

14 (C) the total estimated economic cost im15 posed by all such rules. 

16 (2) REPORT.—Not later than 1 year after the 

17 date of the enactment of this Act, the Comptroller 

18 General of the United States shall submit a report 

19 to Congress that contains the findings of the study 

20 conducted under paragraph (1). 

21 (d) EFFECTIVE DATE.—Subsections (a) and (b), and 

22 the amendments made by such sections, shall take effect 

23 beginning on the date that is 1 year after the date of en24 actment of this Act. 


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1 SEC. 359. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

2 OF RULES. 

3 (a) IN GENERAL.—The Comptroller General of the 

4 United States shall conduct a study to determine, as of 

5 the date of the enactment of this Act— 

6 (1) how many rules (as such term is defined in 

7 section 804 of title 5, United States Code) were in 

8 effect; 

9 (2) how many major rules (as such term is de10 fined in section 804 of title 5, United States Code) 

11 were in effect; and 

12 (3) the total estimated economic cost imposed 

13 by all such rules. 

14 (b) REPORT.—Not later than 1 year after the date 

15 of the enactment of this Act, the Comptroller General of 

16 the United States shall submit a report to Congress that 

17 contains the findings of the study conducted under sub18 section (a). 

19 Subtitle D—Prescription Drug and 

20 Pharmacy Benefit Manager 

21 Transparency 

22 SEC. 361. PATENT DISCLOSURE REQUIREMENTS. 

23 (a) IN GENERAL.—Section 351 of the Public Health 

24 Service Act (42 U.S.C. 262) is amended by adding at the 

25 end the following: 


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1 ‘‘(o) ADDITIONAL REQUIREMENTS WITH RESPECT

2 TO PATENTS.— 

3 ‘‘(1) APPROVED APPLICATION HOLDER LISTING

4 REQUIREMENTS.— 

5 ‘‘(A) IN GENERAL.—Beginning on the date 

6 of enactment of this subsection, within 30 days 

7 of approval of an application under subsection 

8 (a) or (k), the holder of such approved applica9 tion shall submit to the Secretary a list of each 

10 patent required to be disclosed (as described in 

11 paragraph (3)). 

12 ‘‘(B) PREVIOUSLY APPROVED OR LI13 CENSED BIOLOGICAL PRODUCTS.— 

14 ‘‘(i) PRODUCTS APPROVED UNDER

15 SECTION 351 OF THE PHSA.—Not later 

16 than 30 days after the date of enactment 

17 of the Fair Care Act of 2020, the holder 

18 of a biological product license that was ap19 proved under subsection (a) or (k) before 

20 the date of enactment of such Act shall 

21 submit to the Secretary a list of each pat22 ent required to be disclosed (as described 

23 in paragraph (3)). 

24 ‘‘(ii) PRODUCTS APPROVED UNDER

25 SECTION 505 OF THE FFDCA.—Not later 


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1 than 30 days after March 23, 2021, the 

2 holder of an approved application for a bio3 logical product under section 505 of the 

4 Federal Food, Drug, and Cosmetic Act 

5 that is deemed to be a license for the bio6 logical product under this section on 

7 March 23, 2021, shall submit a list of each 

8 patent required to be disclosed (as de9 scribed in paragraph (3)). 

10 ‘‘(C) UPDATES.—The holder of a biological 

11 product license approved under subsection (a) 

12 or (k) shall submit to the Secretary a list that 

13 includes— 

14 ‘‘(i) any patent first required to be 

15 disclosed (as described in paragraph (3)) 

16 after the submission under subparagraph 

17 (A) or (B), as applicable, within 30 days of 

18 the earlier of— 

19 ‘‘(I) the date of issuance of such 

20 patent by the United States Patent 

21 and Trademark Office; or 

22 ‘‘(II) the date of approval of a 

23 supplemental application for the bio24 logical product; and 


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1 ‘‘(ii) any patent, or any claim with re2 spect to a patent, included on the list pur3 suant to this paragraph with respect to the 

4 biological product subsequently determined 

5 to be invalid or unenforceable, within 30 

6 days of a determination of patent inva7 lidity. 

8 ‘‘(2) PUBLICATION OF INFORMATION.— 

9 ‘‘(A) IN GENERAL.—Within 1 year of the 

10 date of enactment of the Fair Care Act of 

11 2020, the Secretary shall publish and make 

12 available to the public a single, easily search13 able, list that includes— 

14 ‘‘(i) the official and proprietary name 

15 of each biological product licensed under 

16 subsection (a) or (k), and of each biological 

17 product application approved under section 

18 505 of the Federal Food, Drug, and Cos19 metic Act and deemed to be a license for 

20 the biological product under this section on 

21 March 23, 2021; 

22 ‘‘(ii) with respect to each biological 

23 product described in clause (i), each patent 

24 submitted in accordance with paragraph 

25 (1); 


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1 ‘‘(iii) the date of licensure and appli2 cation number for each such biological 

3 product; 

4 ‘‘(iv) the marketing status, dosage 

5 form, route of administration, strength, 

6 and, if applicable, reference product, for 

7 each such biological product; 

8 ‘‘(v) the licensure status for each such 

9 biological product, including whether the li10 cense at the time of listing is approved, 

11 withdrawn, or revoked; 

12 ‘‘(vi) any period of any exclusivity 

13 under subsection (k)(7)(A) or subsection 

14 (k)(7)(B) of this section or section 527 of 

15 the Federal Food, Drug, and Cosmetic 

16 Act, and any extension of such period in 

17 accordance with subsection (m) of this sec18 tion with respect to each such biological 

19 product, and the date on which such exclu20 sivity expires; 

21 ‘‘(vii) information regarding any de22 termination related to biosimilarity or 

23 interchangeability for each such biological 

24 product; and 


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1 ‘‘(viii) information regarding approved 

2 indications for each such biological prod3 uct, in such manner as the Secretary de4 termines appropriate. 

5 ‘‘(B) UPDATES.—Every 30 days after the 

6 publication of the first list under subparagraph 

7 (A), the Secretary shall revise the list to in8 clude— 

9 ‘‘(i)(I) each biological product licensed 

10 under subsection (a) or (k) during the 30- 

11 day period; and 

12 ‘‘(II) with respect to each biological 

13 product described in subclause (I), the in14 formation described in clauses (i) through 

15 (viii) of subparagraph (A); and 

16 ‘‘(ii) any updates to information pre17 viously published in accordance with sub18 paragraph (A). 

19 ‘‘(3) PATENTS REQUIRED TO BE DISCLOSED.— 

20 In this section, a ‘patent required to be disclosed’ is 

21 any patent for which the holder of a biological prod22 uct license approved under subsection (a) or (k), or 

23 a biological product application approved under sec24 tion 505 of the Federal Food, Drug, and Cosmetic 

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1 uct under this section on March 23, 2021, believes 

2 a claim of patent infringement could reasonably be 

3 asserted by the holder, or by a patent owner that 

4 has granted an exclusive license to the holder with 

5 respect to the biological product that is the subject 

6 of such license, if a person not licensed by the holder 

7 engaged in the making, using, offering to sell, sell8 ing, or importing into the United States of the bio9 logical product that is the subject of such license.’’. 

10 (b) DISCLOSURE OF PATENTS.—Section 

11 351(l)(3)(A)(i) of the Public Health Service Act (42 

12 U.S.C. 262(l)(3)(A)(i)) is amended by inserting ‘‘included 

13 in the list provided by the reference product sponsor under 

14 subsection (o)(1)’’ after ‘‘a list of patents’’. 

15 (c) RESTRICTION ON CLAIMS OF PATENT INFRINGE16 MENT.—Section 271(e) of title 35, United States Code, 

17 is amended by adding at the end the following: 

18 ‘‘(7) The owner of a patent that should have 

19 been included in the list described in section 

20 351(o)(1) of the Public Health Service Act (42 

21 U.S.C. 262(o)(1)), including any updates required 

22 under subparagraph (C) of that section, but was not 

23 timely included in such list, may not bring an action 

24 under this section for infringement of the patent.’’. 


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1 (d) REGULATIONS.—The Secretary of Health and 

2 Human Services may promulgate regulations to carry out 

3 subsection (o) of section 351 of the Public Health Service 

4 Act (42 U.S.C. 262), as added by subsection (a). 

5 (e) RULE OF CONSTRUCTION.—Nothing in this Act, 

6 including an amendment made by this Act, shall be con7 strued to require or allow the Secretary of Health and 

8 Human Services to delay the licensing of a biological prod9 uct under section 351 of the Public Health Service Act 

10 (42 U.S.C. 262). 

11 SEC. 362. BIOLOGICAL PRODUCT PATENT TRANSPARENCY. 

12 (a) IN GENERAL.—Section 351 of the Public Health 

13 Service Act (42 U.S.C. 262) is amended by adding at the 

14 end the following: 

15 ‘‘(o) ADDITIONAL REQUIREMENTS WITH RESPECT

16 TO PATENTS.— 

17 ‘‘(1) APPROVED APPLICATION HOLDER LISTING

18 REQUIREMENTS.— 

19 ‘‘(A) IN GENERAL.—Beginning on the date 

20 of enactment of the Fair Care Act of 2020, 

21 within 60 days of approval of an application 

22 under subsection (a) or (k), the holder of such 

23 approved application shall submit to the Sec24 retary a list of each patent required to be dis25 closed (as described in paragraph (3)). 


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1 ‘‘(B) PREVIOUSLY APPROVED OR LI2 CENSED BIOLOGICAL PRODUCTS.— 

3 ‘‘(i) PRODUCTS LICENSED UNDER

4 SECTION 351 OF THE PHSA.—Not later 

5 than 30 days after the date of enactment 

6 of the Fair Care Act of 2020, the holder 

7 of a biological product license that was ap8 proved under subsection (a) or (k) before 

9 the date of enactment of such Act shall 

10 submit to the Secretary a list of each pat11 ent required to be disclosed (as described 

12 in paragraph (3)). 

13 ‘‘(ii) PRODUCTS APPROVED UNDER

14 SECTION 505 OF THE FFDCA.—Not later 

15 than 30 days after March 23, 2020, the 

16 holder of an approved application for a bio17 logical product under section 505 of the 

18 Federal Food, Drug, and Cosmetic Act 

19 that is deemed to be a license for the bio20 logical product under this section on 

21 March 23, 2020, shall submit to the Sec22 retary a list of each patent required to be 

23 disclosed (as described in paragraph (3)). 

24 ‘‘(C) UPDATES.—The holder of a biological 

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1 tion under subsection (a) or (k) shall submit to 

2 the Secretary a list that includes— 

3 ‘‘(i) any patent not previously re4 quired to be disclosed (as described in 

5 paragraph (3)) under subparagraph (A) or 

6 (B), as applicable, within 30 days of the 

7 earlier of— 

8 ‘‘(I) the date of issuance of such 

9 patent by the United States Patent 

10 and Trademark Office; or 

11 ‘‘(II) the date of approval of a 

12 supplemental application for the bio13 logical product; and 

14 ‘‘(ii) any patent, or any claim with re15 spect to a patent, included on the list pur16 suant to this paragraph, that the Patent 

17 Trial and Appeal Board of the United 

18 States Patent and Trademark Office deter19 mines in a written decision to cancel as 

20 unpatentable, within 30 days of such deci21 sion. 

22 ‘‘(2) PUBLICATION OF INFORMATION.— 

23 ‘‘(A) IN GENERAL.—Within 1 year of the 

24 date of enactment of the Fair Care Act of 

25 2020, the Secretary shall publish and make 


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1 available to the public a single, easily searchable 

2 list that includes— 

3 ‘‘(i) the official and proprietary name 

4 of each biological product licensed, or 

5 deemed to be licensed, under subsection (a) 

6 or (k); 

7 ‘‘(ii) with respect to each biological 

8 product described in clause (i), each patent 

9 submitted in accordance with paragraph 

10 (1); 

11 ‘‘(iii) the date of licensure and appli12 cation number for each such biological 

13 product; 

14 ‘‘(iv) the marketing status, dosage 

15 form, route of administration, strength, 

16 and, if applicable, reference product, for 

17 each such biological product; 

18 ‘‘(v) the licensure status for each such 

19 biological product, including whether the li20 cense at the time of listing is approved, 

21 withdrawn, or revoked; 

22 ‘‘(vi) with respect to each such bio23 logical product, any period of exclusivity 

24 under paragraph (6), (7)(A), or (7)(B) of 

25 subsection (k) of this section or section 


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1 527 of the Federal Food, Drug, and Cos2 metic Act, and any extension of such pe3 riod in accordance with subsection (m) of 

4 this section, for which the Secretary has 

5 determined such biological product to be 

6 eligible, and the date on which such exclu7 sivity expires; 

8 ‘‘(vii) any determination of biosimi9 larity or interchangeability for each such 

10 biological product; and 

11 ‘‘(viii) information regarding approved 

12 indications for each such biological prod13 uct, in such manner as the Secretary de14 termines appropriate. 

15 ‘‘(B) UPDATES.—Every 30 days after the 

16 publication of the first list under subparagraph 

17 (A), the Secretary shall revise the list to in18 clude— 

19 ‘‘(i)(I) each biological product licensed 

20 under subsection (a) or (k) during the 30- 

21 day period; and 

22 ‘‘(II) with respect to each biological 

23 product described in subclause (I), the in24 formation described in clauses (i) through 

25 (viii) of subparagraph (A); and 


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1 ‘‘(ii) any updates to information pre2 viously published in accordance with sub3 paragraph (A). 

4 ‘‘(C) NONCOMPLIANCE.—Beginning 18 

5 months after the date of enactment of the Fair 

6 Care Act of 2020, the Secretary, in consultation 

7 with the Director of the United States Patent 

8 and Trademark Office, shall publish and make 

9 available to the public a list of any holders of 

10 biological product licenses, and the cor11 responding biological product or products, that 

12 failed to submit information as required under 

13 paragraph (1), including any updates required 

14 under paragraph (1)(C), in such manner and 

15 format as the Secretary determines appropriate. 

16 If information required under paragraph (1) is 

17 submitted following publication of such list, the 

18 Secretary shall remove such holders of such bio19 logical product licenses from the public list in a 

20 reasonable period of time. 

21 ‘‘(3) PATENTS REQUIRED TO BE DISCLOSED.— 

22 In this section, a ‘patent required to be disclosed’ is 

23 any patent for which the holder of a biological prod24 uct license approved under subsection (a) or (k), or 

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1 tion 505 of the Federal Food, Drug, and Cosmetic 

2 Act and deemed to be a license for a biological prod3 uct under this section on March 23, 2020, believes 

4 a claim of patent infringement could reasonably be 

5 asserted by the holder, or by a patent owner that 

6 has granted an exclusive license to the holder with 

7 respect to the biological product that is the subject 

8 of such license, if a person not licensed by the owner 

9 engaged in the making, using, offering to sell, sell10 ing, or importing into the United States of the bio11 logical product that is the subject of such license.’’. 

12 (b) DISCLOSURE OF PATENTS.—Section 

13 351(l)(3)(A)(i) of the Public Health Service Act (42 

14 U.S.C. 262(l)(3)(A)(i)) is amended by inserting ‘‘included 

15 in the list provided by the reference product sponsor under 

16 subsection (o)(1)’’ after ‘‘a list of patents’’. 

17 (c) REVIEW AND REPORT ON NONCOMPLIANCE.— 

18 Not later than 30 months after the date of enactment of 

19 this Act, the Secretary shall— 

20 (1) solicit public comments regarding appro21 priate remedies, in addition to the publication of the 

22 list under subsection (o)(2)(C) of section 351 of the 

23 Public Health Service Act (42 U.S.C. 262), as added 

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1 mation as required under subsection (o)(1) of such 

2 section 351, including any updates required under 

3 subparagraph (C) of such subsection (o)(1); and 

4 (2) submit to Congress an evaluation of com5 ments received under paragraph (1) and the rec6 ommendations of the Secretary concerning appro7 priate remedies. 

8 (d) REGULATIONS.—The Secretary of Health and 

9 Human Services may promulgate regulations to carry out 

10 subsection (o) of section 351 of the Public Health Service 

11 Act (42 U.S.C. 262), as added by subsection (a). 

12 (e) RULE OF CONSTRUCTION.—Nothing in this Act, 

13 including an amendment made by this Act, shall be con14 strued to require or allow the Secretary of Health and 

15 Human Services to delay the licensing of a biological prod16 uct under section 351 of the Public Health Service Act 

17 (42 U.S.C. 262). 

18 SEC. 363. ORANGE BOOK MODERNIZATION. 

19 (a) SUBMISSION OF PATENT INFORMATION FOR

20 BRAND NAME DRUGS.— 

21 (1) IN GENERAL.—Paragraph (1) of section 

22 505(b) of the Federal Food, Drug, and Cosmetic Act 

23 (21 U.S.C. 355(b)) is amended to read as follows: 

24 ‘‘(b)(1)(A) Any person may file with the Secretary 

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1 visions of subsection (a). Such persons shall submit to the 

2 Secretary as part of the application— 

3 ‘‘(i) full reports of investigations which have 

4 been made to show whether or not such drug is safe 

5 for use and whether such drug is effective in use; 

6 ‘‘(ii) a full list of the articles used as compo7 nents of such drug; 

8 ‘‘(iii) a full statement of the composition of 

9 such drug; 

10 ‘‘(iv) a full description of the methods used in, 

11 and the facilities and controls used for, the manufac12 ture, processing, and packing of such drug; 

13 ‘‘(v) such samples of such drug and of the arti14 cles used as components thereof as the Secretary 

15 may require; 

16 ‘‘(vi) specimens of the labeling proposed to be 

17 used for such drug; 

18 ‘‘(vii) any assessments required under section 

19 505B; and 

20 ‘‘(viii) the patent number and expiration date, 

21 of each patent for which a claim of patent infringe22 ment could reasonably be asserted if a person not li23 censed by the owner engaged in the manufacture, 

24 use, or sale of the drug, and that— 


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1 ‘‘(I) claims the drug for which the appli2 cant submitted the application and is a drug 

3 substance patent or a drug product patent; or 

4 ‘‘(II) claims the method of using the drug 

5 for which approval is sought or has been grant6 ed in the application. 

7 ‘‘(B) If an application is filed under this subsection 

8 for a drug, and a patent of the type described in subpara9 graph (A)(viii) that claims such drug or a method of using 

10 such drug is issued after the filing date, the applicant shall 

11 amend the application to include such patent informa12 tion.’’. 

13 (2) GUIDANCE.—The Secretary of Health and 

14 Human Services shall, in consultation with the Di15 rector of the National Institutes of Health and with 

16 representatives of the drug manufacturing industry, 

17 review and develop guidance, as appropriate, on the 

18 inclusion of women and minorities in clinical trials 

19 required under subsection (b)(1)(A)(i) of section 505 

20 of the Federal Food, Drug, and Cosmetic Act (21 

21 U.S.C. 355), as amended by paragraph (1). 

22 (b) CONFORMING CHANGES TO REQUIREMENTS FOR

23 SUBSEQUENT SUBMISSION OF PATENT INFORMATION.— 

24 Section 505(c)(2) of the Federal Food, Drug, and Cos25 metic Act (21 U.S.C. 355(c)(2)) is amended— 


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1 (1) by inserting before the first sentence the 

2 following: ‘‘Not later than 30 days after the date of 

3 approval of an application under subsection (b), the 

4 holder of the approved application shall file with the 

5 Secretary the patent number and the expiration date 

6 of any patent described in subclause (I) or (II) of 

7 subsection (b)(1)(A)(viii), except that a patent that 

8 is identified as claiming a method of using such 

9 drug shall be filed only if the patent claims a meth10 od of use approved in the application. The holder of 

11 the approved application shall file with the Secretary 

12 the patent number and the expiration date of any 

13 patent described in subclause (I) or (II) of sub14 section (b)(1)(A)(viii) that is issued after the date of 

15 approval of the application, not later than 30 days 

16 after the date of issuance of the patent, except that 

17 a patent that claims a method of using such drug 

18 shall be filed only if approval for such use has been 

19 granted in the application.’’; 

20 (2) by inserting after ‘‘the patent number and 

21 the expiration date of any patent which’’ the fol22 lowing: ‘‘fulfills the criteria in subsection (b) and’’; 

23 (3) by inserting after the third sentence (as 

24 amended by paragraph (1)) the following: ‘‘Patent 

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1 tion required by subsection (b)(1)(A)(viii) shall not 

2 be submitted under this paragraph.’’; and 

3 (4) by inserting after ‘‘could not file patent in4 formation under subsection (b) because no patent’’ 

5 the following: ‘‘of the type required to be submitted 

6 in subsection (b)(1)(A)(viii)’’. 

7 (c) LISTING OF EXCLUSIVITIES.—Subparagraph (A) 

8 of section 505(j)(7) of the Federal Food, Drug, and Cos9 metic Act (21 U.S.C. 355(j)(7)) is amended by adding at 

10 the end the following: 

11 ‘‘(iv) For each drug included on the list, the Sec12 retary shall specify any exclusivity period that is applica13 ble, for which the Secretary has determined the expiration 

14 date, and for which such period has not yet expired 

15 under— 

16 ‘‘(I) clause (ii), (iii), or (iv) of subsection 

17 (c)(3)(E) of this section; 

18 ‘‘(II) clause (iv) or (v) of paragraph (5)(B) of 

19 this subsection; 

20 ‘‘(III) clause (ii), (iii), or (iv) of paragraph 

21 (5)(F) of this subsection; 

22 ‘‘(IV) section 505A; 

23 ‘‘(V) section 505E; 

24 ‘‘(VI) section 527(a); or 

25 ‘‘(VII) subsection (u)’’. 


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1 (d) ORANGE BOOK UPDATES WITH RESPECT TO IN2 VALIDATED PATENTS.— 

3 (1) IN GENERAL.— 

4 (A) AMENDMENTS.—Section 505(j)(7)(A) 

5 of the Federal Food, Drug, and Cosmetic Act 

6 (21 U.S.C. 355(j)(7)(A)), as amended by sub7 section (c), is further amended by adding at the 

8 end the following: 

9 ‘‘(v) In the case of a listed drug for which the 

10 list under clause (i) includes a patent for such drug, 

11 and where the Under Secretary of Commerce for In12 tellectual Property and Director of the United States 

13 Patent and Trademark Office have cancelled any 

14 claim of the patent pursuant to a decision by the 

15 Patent Trial and Appeal Board in an inter partes 

16 review conducted under chapter 31 of title 35, 

17 United States Code, or a post-grant review con18 ducted under chapter 32 of that title, and from 

19 which no appeal has been taken, or can be taken, 

20 the holder of the applicable approved application 

21 shall notify the Secretary, in writing, within 14 days 

22 of such cancellation, and, if the patent has been 

23 deemed wholly inoperative or invalid, or if a patent 

24 claim has been cancelled, the revisions required 

25 under clause (iii) shall include striking the patent or 


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1 information regarding such patent claim from the 

2 list with respect to such drug, as applicable, except 

3 that the Secretary shall not remove a patent from 

4 the list before the expiration of any 180-day exclu5 sivity period under paragraph (5)(B)(iv) that relies 

6 on a certification described in paragraph 

7 (2)(A)(vii)(IV) with respect to such patent.’’. 

8 (B) APPLICATION.—The amendment made 

9 by subparagraph (A) shall not apply with re10 spect to any determination with respect to a 

11 patent or patent claim that is made prior to the 

12 date of enactment of this Act. 

13 (2) NO EFFECT ON FIRST APPLICANT EXCLU14 SIVITY PERIOD.—Section 505(j)(5)(B)(iv)(I), as 

15 amended by the preceding sections, is amended by 

16 adding at the end the following: ‘‘This subclause 

17 shall apply even if a patent is stricken from the list 

18 under paragraph (7)(A), pursuant to paragraph 

19 (7)(A)(v), provided that, at the time that the first 

20 applicant submitted an application under this sub21 section containing a certification described in para22 graph (2)(A)(vii)(IV), the patent that was the sub23 ject of such certification was included in such list 

24 with respect to the listed drug.’’. 


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1 SEC. 364. MODERNIZING THE LABELING OF CERTAIN GE2 NERIC DRUGS. 

3 Chapter V of the Federal Food, Drug, and Cosmetic 

4 Act (21 U.S.C. 351 et seq.) is amended by inserting after 

5 section 503C the following: 

6 ‘‘SEC. 503D. PROCESS TO UPDATE LABELING FOR CERTAIN 

7 DRUGS. 

8 ‘‘(a) DEFINITIONS.—For purposes of this section: 

9 ‘‘(1) The term ‘covered drug’ means a drug ap10 proved under section 505(c)— 

11 ‘‘(A) for which there are no unexpired pat12 ents included in the list under section 505(j)(7) 

13 and no unexpired period of exclusivity; 

14 ‘‘(B) for which the approval of the applica15 tion has been withdrawn for reasons other than 

16 safety or effectiveness; and 

17 ‘‘(C) for which, with respect to the label18 ing— 

19 ‘‘(i) new scientific evidence is available 

20 regarding the conditions of use of the 

21 drug; 

22 ‘‘(ii) there is a relevant accepted use 

23 in clinical practice that is not reflected in 

24 the approved labeling; or 


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1 ‘‘(iii) the labeling of such drug does 

2 not reflect current legal and regulatory re3 quirements. 

4 ‘‘(2) The term ‘period of exclusivity’, with re5 spect to a drug approved under section 505(c), 

6 means any period of exclusivity under clause (ii), 

7 (iii), or (iv) of section 505(c)(3)(E), clause (ii), (iii), 

8 or (iv) of section 505(j)(5)(F), or section 505A, 

9 505E, or 527. 

10 ‘‘(3) The term ‘generic version’ means a drug 

11 approved under section 505(j) whose reference drug 

12 is a covered drug. 

13 ‘‘(4) The term ‘relevant accepted use’ means a 

14 use for a drug in clinical practice that is supported 

15 by scientific evidence that appears to the Secretary 

16 to meet the standards for approval under section 

17 505. 

18 ‘‘(5) The term ‘selected drug’ means a covered 

19 drug for which the Secretary has determined 

20 through the process under subsection (c) that the la21 beling should be changed. 

22 ‘‘(b) IDENTIFICATION OF COVERED DRUGS.—The 

23 Secretary may identify covered drugs for which labeling 

24 updates would provide a public health benefit. To assist 


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1 in identifying covered drugs, the Secretary may do one or 

2 both of the following: 

3 ‘‘(1) Enter into cooperative agreements or con4 tracts with public or private entities to review the 

5 available scientific evidence concerning such drugs. 

6 ‘‘(2) Seek public input concerning such drugs, 

7 including input on whether there is a relevant ac8 cepted use in clinical practice that is not reflected in 

9 the approved labeling of such drugs or whether new 

10 scientific evidence is available regarding the condi11 tions of use for such drug, by— 

12 ‘‘(A) holding one or more public meetings; 

13 ‘‘(B) opening a public docket for the sub14 mission of public comments; or 

15 ‘‘(C) other means, as the Secretary deter16 mines appropriate. 

17 ‘‘(c) SELECTION OF DRUGS FOR UPDATING.—If the 

18 Secretary determines, with respect to a covered drug, that 

19 the available scientific evidence meets the standards under 

20 section 505 for adding or modifying information to the 

21 labeling or providing supplemental information to the la22 beling regarding the use of the covered drug, the Secretary 

23 may initiate the process under subsection (d). 

24 ‘‘(d) INITIATION OF THE PROCESS OF UPDATING.— 

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1 propriate for a selected drug pursuant to subsection (c), 

2 the Secretary shall provide notice to the holders of ap3 proved applications for a generic version of such drug 

4 that— 

5 ‘‘(1) summarizes the findings supporting the 

6 determination of the Secretary that the available sci7 entific evidence meets the standards under section 

8 505 for adding or modifying information or pro9 viding supplemental information to the labeling of 

10 the covered drug pursuant to subsection (c); 

11 ‘‘(2) provides a clear statement regarding the 

12 additional, modified, or supplemental information for 

13 such labeling, according to the determination by the 

14 Secretary (including, as applicable, modifications to 

15 add the relevant accepted use to the labeling of the 

16 drug as an additional indication for the drug); and 

17 ‘‘(3) states whether the statement under para18 graph (2) applies to the selected drug as a class of 

19 covered drugs or only to a specific drug product. 

20 ‘‘(e) RESPONSE TO NOTIFICATION.—Within 30 days 

21 of receipt of notification provided by the Secretary pursu22 ant to subsection (d), the holder of an approved applica23 tion for a generic version of the selected drug shall— 

24 ‘‘(1) agree to change the approved labeling to 

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1 formation the Secretary has determined to be appro2 priate; or 

3 ‘‘(2) notify the Secretary that the holder of the 

4 approved application does not believe that the re5 quested labeling changes are warranted and submit 

6 a statement detailing the reasons why such changes 

7 are not warranted. 

8 ‘‘(f) REVIEW OF APPLICATION HOLDER’S RE9 SPONSE.— 

10 ‘‘(1) IN GENERAL.—Upon receipt of the appli11 cation holder’s response, the Secretary shall prompt12 ly review each statement received under subsection 

13 (e)(2) and determine which labeling changes pursu14 ant to the Secretary’s notice under subsection (d) 

15 are appropriate, if any. If the Secretary disagrees 

16 with the reasons why such labeling changes are not 

17 warranted, the Secretary shall provide opportunity 

18 for discussions with the application holders to reach 

19 agreement on whether the labeling for the covered 

20 drug should be updated to reflect current scientific 

21 evidence, and if so, the content of such labeling 

22 changes. 

23 ‘‘(2) CHANGES TO LABELING.—After consid24 ering all responses from the holder of an approved 

25 application under paragraph (1) or (2) of subsection 


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1 (e), and any discussion under paragraph (1), the 

2 Secretary may order such holder to make the label3 ing changes the Secretary determines are appro4 priate. Such holder of an approved application 

5 shall— 

6 ‘‘(A) update its paper labeling for the drug 

7 at the next printing of that labeling; 

8 ‘‘(B) update any electronic labeling for the 

9 drug within 30 days; and 

10 ‘‘(C) submit the revised labeling through 

11 the form, ‘Supplement—Changes Being Ef12 fected’. 

13 ‘‘(g) VIOLATION.—If the holder of an approved appli14 cation for the generic version of the selected drug does 

15 not comply with the requirements of subsection (f)(2), 

16 such generic version of the selected drug shall be deemed 

17 to be misbranded under section 502. 

18 ‘‘(h) LIMITATIONS; GENERIC DRUGS.— 

19 ‘‘(1) IN GENERAL.—With respect to any label20 ing change required under this section, the generic 

21 version shall be deemed to have the same conditions 

22 of use and the same labeling as a reference drug for 

23 purposes of clauses (i) and (v) of section 

24 505(j)(2)(A). Any labeling change so required shall 

25 not have any legal effect for the applicant that is 


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1 different than the legal effect that would have re2 sulted if a supplemental application had been sub3 mitted and approved to conform the labeling of the 

4 generic version to a change in the labeling of the ref5 erence drug. 

6 ‘‘(2) SUPPLEMENTAL APPLICATIONS.—Changes 

7 to labeling made in accordance with this paragraph 

8 shall not be eligible for an exclusivity period under 

9 this Act. 

10 ‘‘(i) DRUG PRODUCT CLASSES.—In the case of a se11 lected drug for which the labeling changes ordered by the 

12 Secretary under subsection (d)(2) are required for a class 

13 of covered drugs, such labeling changes shall be made for 

14 generic versions of such drug in that class. 

15 ‘‘(j) RULES OF CONSTRUCTION.— 

16 ‘‘(1) APPROVAL STANDARDS.—This section 

17 shall not be construed as altering the applicability of 

18 the standards for approval of an application under 

19 section 505. No order shall be issued under this sub20 section unless the evidence supporting the changed 

21 labeling meets the standards for approval applicable 

22 to any change to labeling under section 505. 

23 ‘‘(2) REMOVAL OF INFORMATION.—Nothing in 

24 this section shall be construed to give the Secretary 

25 additional authority to remove approved indications 


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1 for drugs, other than the authority described in this 

2 section. 

3 ‘‘(k) REPORTS.—Not later than 4 years after the 

4 date of the enactment of the Fair Care Act of 2020 and 

5 every 4 years thereafter, the Secretary shall prepare and 

6 submit to the Committee on Health, Education, Labor, 

7 and Pensions of the Senate and the Committee on Energy 

8 and Commerce of the House of Representatives, a report 

9 that— 

10 ‘‘(1) describes the actions of the Secretary 

11 under this section, including— 

12 ‘‘(A) the number of covered drugs and de13 scription of the types of drugs the Secretary 

14 has selected for labeling changes and the ra15 tionale for such recommended changes; and 

16 ‘‘(B) the number of times the Secretary 

17 entered into discussions concerning a disagree18 ment with an application holder or holders and 

19 a summary of the decision regarding a labeling 

20 change, if any; and 

21 ‘‘(2) includes any recommendations of the Sec22 retary for modifying the program under this sec23 tion.’’. 


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1 SEC. 365. REQUIREMENTS WITH RESPECT TO PRESCRIP2 TION DRUG BENEFITS. 

3 (a) IN GENERAL.—Subpart II of part A of title 

4 XXVII of the Public Health Service Act (42 U.S.C. 

5 300gg–11 et seq.) is amended by adding at the end the 

6 following: 

7 ‘‘SEC. 2729A. REQUIREMENTS WITH RESPECT TO PRESCRIP8 TION DRUG BENEFITS. 

9 ‘‘A group health plan or a health insurance issuer of10 fering group or individual health insurance coverage shall 

11 not, and shall ensure that any entity that provides phar12 macy benefits management services under a contract with 

13 any such health plan or health insurance coverage does 

14 not, receive from a drug manufacturer a reduction in price 

15 or other remuneration with respect to any prescription 

16 drug received by an enrollee in the plan or coverage and 

17 covered by the plan or coverage, unless— 

18 ‘‘(1) any such reduction in price is reflected at 

19 the point of sale to the enrollee; and 

20 ‘‘(2) any such other remuneration is a flat fee21 based service fee that a manufacturer of prescription 

22 drugs pays to a pharmacy benefit manager for serv23 ices rendered to the manufacturer that relate to ar24 rangements by the pharmacy benefit manager to 

25 provide pharmacy benefit management services to a 

26 health plan or health insurance issuer, if certain 


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1 conditions established by the Secretary are met, in2 cluding requirements that the fees are transparent 

3 to the health plan or health insurance issuer.’’. 

4 (b) EFFECTIVE DATE.—Section 2729A of the Public 

5 Health Service Act, as added by subsection (a), shall take 

6 effect on January 1, 2021. 

7 SEC. 366. PBM TRANSPARENCY AND ELIMINATION OF DIR 

8 FEES. 

9 (a) PROHIBITING MEDICARE PDP SPONSORS AND

10 MA–PD ORGANIZATIONS FROM RETROACTIVELY REDUC11 ING PAYMENT ON CLEAN CLAIMS SUBMITTED BY PHAR12 MACIES.— 

13 (1) IN GENERAL.—Section 1860D–12(b)(4)(A) 

14 of the Social Security Act (42 U.S.C. 1395w– 

15 112(b)(4)(A)) is amended by adding at the end the 

16 following new clause: 

17 ‘‘(iv) PROHIBITING RETROACTIVE RE18 DUCTIONS IN PAYMENTS ON CLEAN

19 CLAIMS.—Each contract entered into with 

20 a PDP sponsor under this part with re21 spect to a prescription drug plan offered 

22 by such sponsor shall provide that after 

23 the date of receipt of a clean claim sub24 mitted by a pharmacy, the PDP sponsor 

25 (or an agent of the PDP sponsor) may not 


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1 retroactively reduce payment on such claim 

2 directly or indirectly through aggregated 

3 effective rate or otherwise except in the 

4 case such claim is found to not be a clean 

5 claim (such as in the case of a claim lack6 ing required substantiating documentation) 

7 during the course of a routine audit as 

8 permitted pursuant to written agreement 

9 between the PDP sponsor (or such an 

10 agent) and such pharmacy. The previous 

11 sentence shall not prohibit any retroactive 

12 increase in payment to a pharmacy pursu13 ant to a written agreement between a PDP 

14 sponsor (or an agent of such sponsor) and 

15 such pharmacy.’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by subsection (a) shall apply with respect to con18 tracts entered into on or after January 1, 2021. 

19 (b) ELIMINATION OF DIR FEES.— 

20 (1) PHARMACY BENEFITS MANAGER STAND21 ARDS UNDER THE MEDICARE PROGRAM FOR PRE22 SCRIPTION DRUG PLANS AND MA–PD PLANS.— 

23 (A) IN GENERAL.—Section 1860D–12(b) 

24 of the Social Security Act (42 U.S.C. 1395w– 


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1 112(b)) is amended by adding at the end the 

2 following new paragraph: 

3 ‘‘(7) PHARMACY BENEFITS MANAGER TRANS4 PARENCY REQUIREMENTS.—Each contract entered 

5 into with a PDP sponsor under this part with re6 spect to a prescription drug plan offered by such 

7 sponsor or with an MA organization offering an 

8 MA–PD plan under part C shall provide that the 

9 sponsor or organization, respectively, may not enter 

10 into a contract with any pharmacy benefits manager 

11 (referred to in this paragraph as a ‘PBM’) to man12 age the prescription drug coverage provided under 

13 such plan, or to control the costs of the prescription 

14 drug coverage under such plan, unless the PBM ad15 heres to the following criteria when handling person16 ally identifiable utilization and claims data or other 

17 sensitive patient data: 

18 ‘‘(A) The PBM may not transmit any per19 sonally identifiable utilization, protected health 

20 information, or claims data, with respect to a 

21 plan enrollee, to a pharmacy owned by a PBM 

22 if the plan enrollee has not voluntarily elected 

23 in writing or via secure electronic means to fill 

24 that particular prescription at the PBM-owned 

25 pharmacy. 


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1 ‘‘(B) The PBM may not require that a 

2 plan enrollee use a retail pharmacy, mail order 

3 pharmacy, specialty pharmacy, or other phar4 macy entity providing pharmacy services in 

5 which the PBM has an ownership interest or 

6 that has an ownership interest in the PBM, or 

7 provide an incentive to a plan enrollee to en8 courage the enrollee to use a retail pharmacy, 

9 mail order pharmacy, specialty pharmacy, or 

10 other pharmacy entity providing pharmacy serv11 ices in which the PBM has an ownership inter12 est or that has an ownership interest in the 

13 PBM, if the incentive is applicable only to such 

14 pharmacies.’’. 

15 (B) REGULAR UPDATE OF PRESCRIPTION

16 DRUG PRICING STANDARD.—Paragraph (6) of 

17 section 1860D–12(b) of the Social Security Act 

18 (42 U.S.C. 1395w–112(b)) is amended to read 

19 as follows: 

20 ‘‘(6) REGULAR UPDATE OF PRESCRIPTION

21 DRUG PRICING STANDARD.— 

22 ‘‘(A) IN GENERAL.—If the PDP sponsor of 

23 a prescription drug plan (or MA organization 

24 offering an MA–PD plan) uses a standard for 

25 reimbursement (as described in subparagraph 


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1 (B)) of pharmacies based on the cost of a drug, 

2 each contract entered into with such sponsor 

3 under this part (or organization under part C) 

4 with respect to the plan shall provide that the 

5 sponsor (or organization) shall— 

6 ‘‘(i) update such standard not less fre7 quently than once every 7 days, beginning 

8 with an initial update on January 1 of 

9 each year, to accurately reflect the market 

10 price of acquiring the drug; 

11 ‘‘(ii) disclose to applicable pharmacies 

12 and the contracting entities of such phar13 macies the sources used for making any 

14 such update immediately without require15 ment of request; 

16 ‘‘(iii) if the source for such a standard 

17 for reimbursement is not publicly available, 

18 disclose to the applicable pharmacies and 

19 the respective contracting entities of such 

20 pharmacies all individual drug prices to be 

21 so updated in advance of the use of such 

22 prices for the reimbursement of claims; 

23 ‘‘(iv) establish a process to appeal, in24 vestigate, and resolve disputes regarding 

25 individual drug prices that are less than 


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1 the pharmacy acquisition price for such 

2 drug, which must be adjudicated within 7 

3 days of the pharmacy filing its appeal; and 

4 ‘‘(v) provide all such pricing data in 

5 an .xml spreadsheet format or a com6 parable easily accessible and complete 

7 spreadsheet format. 

8 ‘‘(B) PRESCRIPTION DRUG PRICING

9 STANDARD DEFINED.—For purposes of sub10 paragraph (A), a standard for reimbursement 

11 of a pharmacy is any methodology or formula 

12 for varying the pricing of a drug or drugs dur13 ing the term of the pharmacy reimbursement 

14 contract that is based on the cost of the drug 

15 involved, including drug pricing references and 

16 amounts that are based upon average wholesale 

17 price, wholesale average cost, average manufac18 turer price, average sales price, maximum al19 lowable cost (MAC), or other costs, whether 

20 publicly available or not.’’. 

21 (C) EFFECTIVE DATE.—The amendments 

22 made by this section shall apply to plan years 

23 beginning on or after January 1, 2021. 

24 (2) REGULAR UPDATE OF PRESCRIPTION DRUG

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1 MACY PROGRAM.—Section 1074g(d) of title 10, 

2 United States Code, is amended by adding at the 

3 end the following new paragraph: 

4 ‘‘(3) To the extent practicable, with respect to the 

5 TRICARE retail pharmacy program described in sub6 section (a)(2)(E)(ii), the Secretary shall ensure that a con7 tract entered into with a TRICARE managed care support 

8 contractor includes requirements described in section 

9 1860D–12(b)(6) of the Social Security Act (42 U.S.C. 

10 1395w–112(b)(6)) to ensure the provision of information 

11 regarding the pricing standard for prescription drugs.’’. 

12 (3) PRESCRIPTION DRUG TRANSPARENCY IN

13 THE FEDERAL EMPLOYEES HEALTH BENEFITS PRO14 GRAM.— 

15 (A) IN GENERAL.—Section 8902 of title 5, 

16 United States Code, is amended by adding at 

17 the end the following new subsections: 

18 ‘‘(p) A contract may not be made or a plan approved 

19 under this chapter under which a carrier has an agree20 ment with a pharmacy benefits manager (in this sub21 section referred to as a ‘PBM’) to manage prescription 

22 drug coverage or to control the costs of the prescription 

23 drug coverage unless the carrier and PBM adhere to the 

24 following criteria: 


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1 ‘‘(1) The PBM may not transmit any personally 

2 identifiable utilization, protected health information, 

3 or claims data with respect to an individual enrolled 

4 under such contract or plan to a pharmacy owned by 

5 the PBM if the individual has not voluntarily elected 

6 in writing or via secure electronic means to fill that 

7 particular prescription at such a pharmacy. 

8 ‘‘(2) The PBM may not require that an indi9 vidual enrolled under such contract or plan use a re10 tail pharmacy, mail order pharmacy, specialty phar11 macy, or other pharmacy entity providing pharmacy 

12 services in which the PBM has an ownership interest 

13 or that has an ownership interest in the PBM or 

14 provide an incentive to a plan enrollee to encourage 

15 the enrollee to use a retail pharmacy, mail order 

16 pharmacy, specialty pharmacy, or other pharmacy 

17 entity providing pharmacy services in which the 

18 PBM has an ownership interest or that has an own19 ership interest in the PBM, if the incentive is appli20 cable only to such pharmacies. 

21 ‘‘(q)(1) If a contract made or plan approved under 

22 this chapter provides for a standard for reimbursement 

23 (as described in paragraph (2)) with respect to a prescrip24 tion drug plan, such contract or plan shall provide that 

25 the applicable carrier— 


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1 ‘‘(A) update such standard not less frequently 

2 than once every 7 days, beginning with an initial up3 date on January 1 of each year, to accurately reflect 

4 the market price of acquiring the drug; 

5 ‘‘(B) disclose to applicable pharmacies and the 

6 contracting entities of such pharmacies the sources 

7 used for making any such update immediately with8 out requirement of request; 

9 ‘‘(C) if the source for such a standard for reim10 bursement is not publicly available, disclose to the 

11 applicable pharmacies and contracting entities of 

12 such pharmacies all individual drug prices to be so 

13 updated in advance of the use of such prices for the 

14 reimbursement of claims; 

15 ‘‘(D) establish a process to appeal, investigate, 

16 and resolve disputes regarding individual drug prices 

17 that are less than the pharmacy acquisition price for 

18 such drug, which must be adjudicated within 7 days 

19 of the pharmacy filing its appeal; and 

20 ‘‘(E) provide all such pricing data in an .xml 

21 spreadsheet format or a comparable easily accessible 

22 and complete spreadsheet format. 

23 ‘‘(2) For purposes of paragraph (1), a standard for 

24 reimbursement of a pharmacy is any methodology or for25 mula for varying the pricing of a drug or drugs during 


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1 the term of the pharmacy reimbursement contract that is 

2 based on the cost of the drug involved, including drug pric3 ing references and amounts that are based upon average 

4 wholesale price, wholesale average cost, average manufac5 turer price, average sales price, maximum allowable cost, 

6 or other costs, whether publicly available or not.’’. 

7 (B) APPLICATION.—The amendment made 

8 by subparagraph (A) shall apply to any contract 

9 entered into under section 8902 of title 5, 

10 United States Code, on or after the date of en11 actment of this section. 

12 SEC. 367. HEALTH PLAN OVERSIGHT OF PHARMACY BEN13 EFIT MANAGER SERVICES. 

14 Subpart II of part A of title XXVII of the Public 

15 Health Service Act (42 U.S.C. 300gg–11 et seq.), as 

16 amended by the preceding sections, is further amended by 

17 adding at the end the following: 

18 ‘‘SEC. 2729E. HEALTH PLAN OVERSIGHT OF PHARMACY 

19 BENEFIT MANAGER SERVICES. 

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

21 insurance issuer offering group health insurance coverage 

22 or an entity or subsidiary providing pharmacy benefits 

23 management services shall not enter into a contract with 

24 a drug manufacturer, distributor, wholesaler, subcon25 tractor, rebate aggregator, or any associated third party 


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1 that limits the disclosure of information to plan sponsors 

2 in such a manner that prevents the plan or coverage, or 

3 an entity or subsidiary providing pharmacy benefits man4 agement services on behalf of a plan or coverage from 

5 making the reports described in subsection (b). 

6 ‘‘(b) REPORTS TO GROUP PLAN SPONSORS.— 

7 ‘‘(1) IN GENERAL.—Beginning with the first 

8 plan year that begins after the date of enactment of 

9 the Fair Care Act of 2020, not less frequently than 

10 once every 6 months, a health insurance issuer offer11 ing group health insurance coverage or an entity 

12 providing pharmacy benefits management services 

13 on behalf of a group health plan shall submit to the 

14 plan sponsor (as defined in section 3(16)(B) of the 

15 Employee Retirement Income Security Act of 1974) 

16 of such group health plan or health insurance cov17 erage a report in accordance with this subsection 

18 and make such report available to the plan sponsor 

19 in a machine-readable format. Each such report 

20 shall include, with respect to the applicable group 

21 health plan or health insurance coverage— 

22 ‘‘(A) information collected from drug man23 ufacturers by such issuer or entity on the total 

24 amount of copayment assistance dollars paid, or 

25 copayment cards applied, that were funded by 


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1 the drug manufacturer with respect to the en2 rollees in such plan or coverage; 

3 ‘‘(B) a list of each covered drug dispensed 

4 during the reporting period, including, with re5 spect to each such drug during the reporting 

6 period— 

7 ‘‘(i) the brand name, chemical entity, 

8 and National Drug Code; 

9 ‘‘(ii) the number of enrollees for 

10 whom the drug was filled during the plan 

11 year, the total number of prescription fills 

12 for the drug (including original prescrip13 tions and refills), and the total number of 

14 dosage units of the drug dispensed across 

15 the plan year, including whether the dis16 pensing channel was by retail, mail order, 

17 or specialty pharmacy; 

18 ‘‘(iii) the wholesale acquisition cost, 

19 listed as cost per days supply and cost per 

20 pill, or in the case of a drug in another 

21 form, per dose; 

22 ‘‘(iv) the total out-of-pocket spending 

23 by enrollees on such drug, including en24 rollee spending through copayments, coin25 surance, and deductibles; and 


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1 ‘‘(v) for any drug for which gross 

2 spending of the group health plan or 

3 health insurance coverage exceeded 

4 $10,000 during the reporting period— 

5 ‘‘(I) a list of all other available 

6 drugs in the same therapeutic cat7 egory or class, including brand name 

8 drugs and biological products and ge9 neric drugs or biosimilar biological 

10 products that are in the same thera11 peutic category or class; and 

12 ‘‘(II) the rationale for preferred 

13 formulary placement of a particular 

14 drug or drugs in that therapeutic cat15 egory or class; 

16 ‘‘(C) a list of each therapeutic category or 

17 class of drugs that were dispensed under the 

18 health plan or health insurance coverage during 

19 the reporting period, and, with respect to each 

20 such therapeutic category or class of drugs, 

21 during the reporting period— 

22 ‘‘(i) total gross spending by the plan, 

23 before manufacturer rebates, fees, or other 

24 manufacturer remuneration; 


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1 ‘‘(ii) the number of enrollees who 

2 filled a prescription for a drug in that cat3 egory or class; 

4 ‘‘(iii) if applicable to that category or 

5 class, a description of the formulary tiers 

6 and utilization mechanisms (such as prior 

7 authorization or step therapy) employed 

8 for drugs in that category or class; 

9 ‘‘(iv) the total out-of-pocket spending 

10 by enrollees, including enrollee spending 

11 through copayments, coinsurance, and 

12 deductibles; and 

13 ‘‘(v) for each therapeutic category or 

14 class under which 3 or more drugs are in15 cluded on the formulary of such plan or 

16 coverage— 

17 ‘‘(I) the amount received, or ex18 pected to be received, from drug man19 ufacturers in rebates, fees, alternative 

20 discounts, or other remuneration— 

21 ‘‘(aa) to be paid by drug 

22 manufacturers for claims in23 curred during the reporting pe24 riod; or 


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1 ‘‘(bb) that is related to utili2 zation of drugs, in such thera3 peutic category or class; 

4 ‘‘(II) the total net spending, after 

5 deducting rebates, price concessions, 

6 alternative discounts or other remu7 neration from drug manufacturers, by 

8 the health plan or health insurance 

9 coverage on that category or class of 

10 drugs; and 

11 ‘‘(III) the net price per course of 

12 treatment or 30-day supply incurred 

13 by the health plan or health insurance 

14 coverage and its enrollees, after man15 ufacturer rebates, fees, and other re16 muneration for drugs dispensed within 

17 such therapeutic category or class 

18 during the reporting period; 

19 ‘‘(D) total gross spending on prescription 

20 drugs by the plan or coverage during the re21 porting period, before rebates and other manu22 facturer fees or remuneration; 

23 ‘‘(E) total amount received, or expected to 

24 be received, by the health plan or health insur25 ance coverage in drug manufacturer rebates, 


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1 fees, alternative discounts, and all other remu2 neration received from the manufacturer or any 

3 third party, other than the plan sponsor, re4 lated to utilization of drug or drug spending 

5 under that health plan or health insurance cov6 erage during the reporting period; 

7 ‘‘(F) the total net spending on prescription 

8 drugs by the health plan or health insurance 

9 coverage during the reporting period; and 

10 ‘‘(G) amounts paid directly or indirectly in 

11 rebates, fees, or any other type of remuneration 

12 to brokers, consultants, advisors, or any other 

13 individual or firm who referred the group health 

14 plan’s or health insurance issuer’s business to 

15 the pharmacy benefit manager. 

16 ‘‘(2) PRIVACY REQUIREMENTS.—Health insur17 ance issuers offering group health insurance cov18 erage and entities providing pharmacy benefits man19 agement services on behalf of a group health plan 

20 shall provide information under paragraph (1) in a 

21 manner consistent with the privacy, security, and 

22 breach notification regulations promulgated under 

23 section 264(c) of the Health Insurance Portability 

24 and Accountability Act of 1996 (or successor regula25 tions), and shall restrict the use and disclosure of 


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1 such information according to such privacy regula2 tions. 

3 ‘‘(3) DISCLOSURE AND REDISCLOSURE.— 

4 ‘‘(A) LIMITATION TO BUSINESS ASSOCI5 ATES.—A group health plan receiving a report 

6 under paragraph (1) may disclose such informa7 tion only to business associates of such plan as 

8 defined in section 160.103 of title 45, Code of 

9 Federal Regulations (or successor regulations). 

10 ‘‘(B) CLARIFICATION REGARDING PUBLIC

11 DISCLOSURE OF INFORMATION.—Nothing in 

12 this section prevents a health insurance issuer 

13 offering group health insurance coverage or an 

14 entity providing pharmacy benefits management 

15 services on behalf of a group health plan from 

16 placing reasonable restrictions on the public dis17 closure of the information contained in a report 

18 described in paragraph (1), except that such 

19 issuer or entity may not restrict disclosure of 

20 such report to governmental agencies pursuant 

21 to an investigation or enforcement action. 

22 ‘‘(C) LIMITED FORM OF REPORT.—The 

23 Secretary shall define through rulemaking a 

24 limited form of the report under paragraph (1) 

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1 facturers, drug wholesalers, or other direct par2 ticipants in the drug supply chain, in order to 

3 prevent anti-competitive behavior. 

4 ‘‘(c) LIMITATIONS ON SPREAD PRICING.— 

5 ‘‘(1) PRESCRIPTION DRUG TRANSACTIONS WITH

6 PHARMACIES INDEPENDENT OF THE ISSUER OR

7 PHARMACY BENEFITS MANAGER.—If the pharmacy 

8 that dispenses a prescription drug to an enrollee in 

9 a group health plan or group or individual health in10 surance coverage is not wholly or partially owned by 

11 such plan, such issuer, or an entity providing phar12 macy benefit management services under such plan 

13 or coverage, such plan, issuer, or entity shall not 

14 charge the plan, issuer, or enrollee a price for such 

15 prescription drug that exceeds the price paid to the 

16 pharmacy. 

17 ‘‘(2) INTRA-COMPANY PRESCRIPTION DRUG

18 TRANSACTIONS.—If the mail order, specialty, or re19 tail pharmacy that dispenses a prescription drug to 

20 an enrollee in a group health plan or health insur21 ance coverage is wholly or partially owned by, and 

22 submits claims to, such health insurance issuer or 

23 an entity providing pharmacy benefit management 

24 services under a group health plan or group or indi25 vidual health insurance coverage, the price charged 


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1 for such drug by such pharmacy to such group 

2 health plan or health insurance issuer offering group 

3 or individual health insurance coverage may not ex4 ceed the lesser of— 

5 ‘‘(A) the amount paid to the pharmacy for 

6 acquisition of the drug; or 

7 ‘‘(B) the median price charged to the 

8 group health plan or health insurance issuer 

9 when the same drug is dispensed to enrollees in 

10 the plan or coverage by other similarly situated 

11 pharmacies not wholly or partially owned by the 

12 health insurance issuer or entity providing 

13 pharmacy benefits management services, as de14 scribed in paragraph (1). 

15 ‘‘(3) SUPPLEMENTARY REPORTING FOR INTRA16 COMPANY PRESCRIPTION DRUG TRANSACTIONS.—A 

17 health insurance issuer of group health insurance 

18 coverage or an entity providing pharmacy benefits 

19 management services under a group health plan or 

20 group health insurance coverage that conducts 

21 transactions with a wholly or partially owned phar22 macy, as described in paragraph (2), shall submit, 

23 together with the report under subsection (b), a sup24 plementary report every 6 months to the plan spon25 sor that includes— 


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1 ‘‘(A) an explanation of any benefit design 

2 parameters that encourage enrollees in the plan 

3 or coverage to fill prescriptions at mail order, 

4 specialty, or retail pharmacies that are wholly 

5 or partially owned by that issuer or entity; 

6 ‘‘(B) the percentage of total prescriptions 

7 charged to the plan, coverage, or enrollees in 

8 the plan or coverage, that were dispensed by 

9 mail order, specialty, or retail pharmacies that 

10 are wholly or partially owned by the issuer or 

11 entity providing pharmacy benefits management 

12 services; and 

13 ‘‘(C) a list of all drugs dispensed by such 

14 wholly or partially owned pharmacy and 

15 charged to the plan or coverage, or enrollees of 

16 the plan or coverage, during the applicable 

17 quarter, and, with respect to each drug— 

18 ‘‘(i) the amount charged per course of 

19 treatment or 30-day supply with respect to 

20 enrollees in the plan or coverage, including 

21 amounts charged to the plan or coverage 

22 and amounts charged to the enrollee; 

23 ‘‘(ii) the median amount charged to 

24 the plan or coverage, per course of treat25 ment or 30-day supply, including amounts 


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1 paid by the enrollee, when the same drug 

2 is dispensed by other pharmacies that are 

3 not wholly or partially owned by the issuer 

4 or entity and that are included in the 

5 pharmacy network of that plan or cov6 erage; 

7 ‘‘(iii) the interquartile range of the 

8 costs, per course of treatment or 30-day 

9 supply, including amounts paid by the en10 rollee, when the same drug is dispensed by 

11 other pharmacies that are not wholly or 

12 partially owned by the issuer or entity and 

13 that are included in the pharmacy network 

14 of that plan or coverage; and 

15 ‘‘(iv) the lowest cost per course of 

16 treatment or 30-day supply, for such drug, 

17 including amounts charged to the plan or 

18 issuer and enrollee, that is available from 

19 any pharmacy included in the network of 

20 the plan or coverage. 

21 ‘‘(d) FULL REBATE PASS-THROUGH TO PLAN.— 

22 ‘‘(1) IN GENERAL.—A pharmacy benefits man23 ager, a third-party administrator of a group health 

24 plan, a health insurance issuer offering group health 

25 insurance coverage, or an entity providing pharmacy 


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1 benefits management services under such health 

2 plan or health insurance coverage shall remit 100 

3 percent of rebates, fees, alternative discounts, and 

4 all other remuneration received from a pharma5 ceutical manufacturer, distributor or any other third 

6 party, that are related to utilization of drugs under 

7 such health plan or health insurance coverage, to the 

8 group health plan. 

9 ‘‘(2) FORM AND MANNER OF REMITTANCE.— 

10 Such rebates, fees, alternative discounts, and other 

11 remuneration shall be— 

12 ‘‘(A) remitted to the group health plan in 

13 a timely fashion after the period for which such 

14 rebates, fees, or other remuneration is cal15 culated, and in no case later than 90 days after 

16 the end of such period; 

17 ‘‘(B) fully disclosed and enumerated to the 

18 group health plan sponsor, as described in 

19 (b)(1); 

20 ‘‘(C) available for audit by the plan spon21 sor, or a third party designated by a plan spon22 sor no less than once per plan year; and 

23 ‘‘(D) returned to the issuer or entity pro24 viding pharmaceutical benefit management 

25 services by the group health plan if audits by 


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1 such issuer or entity indicate that the amounts 

2 received are incorrect after such amounts have 

3 been paid to the group health plan. 

4 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A phar5 macy benefits manager, a third-party administrator 

6 of a group health plan, a health insurance issuer of7 fering group health insurance coverage, or an entity 

8 providing pharmacy benefits management services 

9 under such health plan or health insurance coverage 

10 shall make rebate contracts with drug manufactur11 ers available for audit by such plan sponsor or des12 ignated third party, subject to confidentiality agree13 ments to prevent re-disclosure of such contracts. 

14 ‘‘(e) ENFORCEMENT.— 

15 ‘‘(1) IN GENERAL.—The Secretary, in consulta16 tion with the Secretary of Labor and the Secretary 

17 of the Treasury, shall enforce this section. 

18 ‘‘(2) FAILURE TO PROVIDE TIMELY INFORMA19 TION.—A health insurance issuer or an entity pro20 viding pharmacy benefit management services that 

21 violates subsection (a), fails to provide information 

22 required under subsection (b), engages in spread 

23 pricing as defined in subsection (c), or fails to com24 ply with the requirements of subsection (d), or a 

25 drug manufacturer that fails to provide information 


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1 under subsection (b)(1)(A), in a timely manner shall 

2 be subject to a civil monetary penalty in the amount 

3 of $10,000 for each day during which such violation 

4 continues or such information is not disclosed or re5 ported. 

6 ‘‘(3) FALSE INFORMATION.—A health insurance 

7 issuer, entity providing pharmacy benefit manage8 ment services, or drug manufacturer that knowingly 

9 provides false information under this section shall be 

10 subject to a civil money penalty in an amount not 

11 to exceed $100,000 for each item of false informa12 tion. Such civil money penalty shall be in addition to 

13 other penalties as may be prescribed by law. 

14 ‘‘(4) PROCEDURE.—The provisions of section 

15 1128A of the Social Security Act, other than sub16 section (a) and (b) and the first sentence of sub17 section (c)(1) of such section shall apply to civil 

18 monetary penalties under this subsection in the 

19 same manner as such provisions apply to a penalty 

20 or proceeding under section 1128A of the Social Se21 curity Act. 

22 ‘‘(5) SAFE HARBOR.—The Secretary may waive 

23 penalties under paragraph (2), or extend the period 

24 of time for compliance with a requirement of this 

25 section, for an entity in violation of this section that 


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1 has made a good-faith effort to comply with this sec2 tion. 

3 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec4 tion shall be construed to prohibit payments to entities 

5 offering pharmacy benefits management services for bona 

6 fide services using a fee structure not contemplated by this 

7 section, provided that such fees are transparent to group 

8 health plans and health insurance issuers. 

9 ‘‘(g) DEFINITIONS.—In this section— 

10 ‘‘(1) the term ‘similarly situated pharmacy’ 

11 means, with respect to a particular pharmacy, an12 other pharmacy that is approximately the same size 

13 (as measured by the number of prescription drugs 

14 dispensed), and that serves patients in the same geo15 graphical area, whether through physical locations or 

16 mail order; and 

17 ‘‘(2) the term ‘wholesale acquisition cost’ has 

18 the meaning given such term in section 

19 1847A(c)(6)(B) of the Social Security Act.’’. 

20 SEC. 368. STUDY BY COMPTROLLER GENERAL OF UNITED 

21 STATES. 

22 (a) IN GENERAL.—The Comptroller General of the 

23 United States (referred to in this section as the ‘‘Comp24 troller General’’) shall, in consultation with appropriate 


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1 stakeholders, conduct a study on the role of pharmacy 

2 benefit managers. 

3 (b) PERMISSIBLE EXAMINATION.—In conducting the 

4 study required under subsection (a), the Comptroller Gen5 eral may examine various qualitative and quantitative as6 pects of the role of pharmacy benefit managers, such as 

7 the following: 

8 (1) The role that pharmacy benefit managers 

9 play in the pharmaceutical supply chain. 

10 (2) The state of competition among pharmacy 

11 benefit managers, including the market share for the 

12 Nation’s largest pharmacy benefit managers. 

13 (3) The use of rebates and fees by pharmacy 

14 benefit managers, including— 

15 (A) the extent to which rebates are passed 

16 on to health plans and whether such rebates are 

17 passed on to individuals enrolled in such plans; 

18 (B) the extent to which rebates are kept by 

19 such pharmacy benefit managers; and 

20 (C) the role of any fees charged by such 

21 pharmacy benefit managers. 

22 (4) Whether pharmacy benefit managers struc23 ture their formularies in favor of high-rebate pre24 scription drugs over lower-cost, lower-rebate alter25 natives. 


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1 (5) The average prior authorization approval 

2 time for pharmacy benefit managers. 

3 (6) Factors affecting the use of step therapy by 

4 pharmacy benefit managers. 

5 (c) REPORT.—Not later than 3 years after the date 

6 of enactment of this Act, the Comptroller General shall 

7 submit to the Secretary of Health and Human Services, 

8 the Committee on Health, Education, Labor, and Pen9 sions of the Senate, and the Committee on Energy and 

10 Commerce of the House of Representatives a report con11 taining the results of the study conducted under sub12 section (a), including policy recommendations. 

13 Subtitle E—Medicare and Medicaid 

14 Prescription Drug Reforms 

15 SEC. 371. MEDICARE PART B REBATE BY MANUFACTURERS 

16 FOR DRUGS OR BIOLOGICALS WITH PRICES 

17 INCREASING FASTER THAN INFLATION. 

18 (a) IN GENERAL.—Section 1847A of the Social Secu19 rity Act (42 U.S.C. 1395w–3a) is amended by adding at 

20 the end the following new subsection: 

21 ‘‘(h) REBATE BY MANUFACTURERS FOR DRUGS OR

22 BIOLOGICALS WITH PRICES INCREASING FASTER THAN

23 INFLATION.— 

24 ‘‘(1) REQUIREMENTS.— 


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1 ‘‘(A) SECRETARIAL PROVISION OF INFOR2 MATION.—Not later than 6 months after the 

3 end of each rebate period (as defined in para4 graph (2)(A)) beginning on or after January 1, 

5 2021, the Secretary shall, for each rebatable 

6 drug (as defined in paragraph (2)(B)), report 

7 to each manufacturer of such rebatable drug 

8 the following for such rebate period: 

9 ‘‘(i) Information on the total number 

10 of units of the billing and payment code 

11 described in subparagraph (A)(i) of para12 graph (3) with respect to such rebatable 

13 drug and rebate period. 

14 ‘‘(ii) Information on the amount (if 

15 any) of the excess average sales price in16 crease described in subparagraph (A)(ii) of 

17 such paragraph for such rebatable drug 

18 and rebate period. 

19 ‘‘(iii) The rebate amount specified 

20 under such paragraph for such rebatable 

21 drug and rebate period. 

22 ‘‘(B) MANUFACTURER REBATE.— 

23 ‘‘(i) IN GENERAL.—Subject to clause 

24 (ii), for each rebate period beginning on or 

25 after January 1, 2021, the manufacturer 


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1 of a rebatable drug shall, for such drug, 

2 not later than 30 days after the date of re3 ceipt from the Secretary of the information 

4 and rebate amount pursuant to subpara5 graph (A) for such rebate period, provide 

6 to the Secretary a rebate that is equal to 

7 the amount specified in paragraph (3) for 

8 such drug for such rebate period. 

9 ‘‘(ii) EXEMPTION FOR SHORTAGES.— 

10 The Secretary may reduce or waive the re11 bate under this subparagraph with respect 

12 to a rebatable drug that is listed on the 

13 drug shortage list maintained by the Food 

14 and Drug Administration pursuant to sec15 tion 506E of the Federal Food, Drug, and 

16 Cosmetic Act. 

17 ‘‘(C) REQUEST FOR RECONSIDERATION.— 

18 The Secretary shall establish procedures under 

19 which a manufacturer of a rebatable drug may 

20 request a reconsideration by the Secretary of 

21 the rebate amount specified under paragraph 

22 (3) for such rebatable drug and rebate period, 

23 as reported to the manufacturer pursuant to 

24 subparagraph (A)(iii). 


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1 ‘‘(2) REBATE PERIOD AND REBATABLE DRUG

2 DEFINED.—In this subsection: 

3 ‘‘(A) REBATE PERIOD.—The term ‘rebate 

4 period’ means a calendar quarter beginning on 

5 or after January 1, 2021. 

6 ‘‘(B) REBATABLE DRUG.—The term 

7 ‘rebatable drug’ means a single source drug or 

8 biological (other than a biosimilar biological 

9 product)— 

10 ‘‘(i) described in section 

11 1842(o)(1)(C) for which the payment 

12 amount is provided under this section; or 

13 ‘‘(ii) for which payment is made sepa14 rately under section 1833(i) or section 

15 1833(t) and for which the payment 

16 amount is calculated based on the payment 

17 amount under this section. 

18 ‘‘(3) REBATE AMOUNT.— 

19 ‘‘(A) IN GENERAL.—For purposes of para20 graph (1)(B), the amount specified in this para21 graph for a rebatable drug assigned to a billing 

22 and payment code for a rebate period is, subject 

23 to paragraph (4), the amount equal to the prod24 uct of— 


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1 ‘‘(i) subject to subparagraph (B), the 

2 total number of units of the billing and 

3 payment code for such rebatable drug fur4 nished during the rebate period; and 

5 ‘‘(ii) the amount (if any) by which— 

6 ‘‘(I) the amount determined 

7 under subsection (b)(4) for such 

8 rebatable drug during the rebate pe9 riod; exceeds 

10 ‘‘(II) the inflation-adjusted base 

11 payment amount determined under 

12 subparagraph (C) of this paragraph 

13 for such rebatable drug during the re14 bate period. 

15 ‘‘(B) EXCLUDED UNITS.—For purposes of 

16 subparagraph (A)(i), the total number of units 

17 of the billing and payment code for rebatable 

18 drugs furnished during a rebate period shall not 

19 include units with respect to which the manu20 facturer provides a discount under the program 

21 under section 340B of the Public Health Serv22 ice Act or a rebate under section 1927. 

23 ‘‘(C) DETERMINATION OF INFLATION-AD24 JUSTED PAYMENT AMOUNT.—The inflation-ad25 justed payment amount determined under this 


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1 subparagraph for a rebatable drug for a rebate 

2 period is— 

3 ‘‘(i) the amount determined under 

4 subsection (b)(4) for such rebatable drug 

5 in the payment amount benchmark quarter 

6 (as defined in subparagraph (D)); in7 creased by 

8 ‘‘(ii) the percentage by which the re9 bate period CPI–U (as defined in subpara10 graph (F)) for the rebate period exceeds 

11 the benchmark period CPI–U (as defined 

12 in subparagraph (E)). 

13 ‘‘(D) PAYMENT AMOUNT BENCHMARK

14 QUARTER.—The term ‘payment amount bench15 mark quarter’ means the calendar quarter be16 ginning July 1, 2019. 

17 ‘‘(E) BENCHMARK PERIOD CPI–U.—The 

18 term ‘benchmark period CPI–U’ means the con19 sumer price index for all urban consumers 

20 (United States city average) for July 2019. 

21 ‘‘(F) REBATE PERIOD CPI–U.—The term 

22 ‘rebate period CPI–U’ means, with respect to a 

23 rebate period, the consumer price index for all 

24 urban consumers (United States city average) 

25 for the last month of the calendar quarter that 


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1 is two calendar quarters prior to the rebate pe2 riod. 

3 ‘‘(4) APPLICATION TO NEW DRUGS.—In the 

4 case of a rebatable drug first approved or licensed 

5 by the Food and Drug Administration after July 1, 

6 2019, the following shall apply: 

7 ‘‘(A) DURING INITIAL PERIOD.—For quar8 ters during the initial period in which the pay9 ment amount for such drug is determined using 

10 the methodology described in subsection 

11 (c)(4)— 

12 ‘‘(i) clause (ii)(I) of paragraph (3)(A) 

13 shall be applied as if the reference to ‘the 

14 amount determined under subsection 

15 (b)(4),’ were a reference to ‘the wholesale 

16 acquisition cost applicable under subsection 

17 (c)(4)’; 

18 ‘‘(ii) clause (i) of paragraph (3)(C) 

19 shall be applied— 

20 ‘‘(I) as if the reference to ‘the 

21 amount determined under subsection 

22 (b)(4),’ were a reference to ‘the whole23 sale acquisition cost applicable under 

24 subsection (c)(4)’; and 


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1 ‘‘(II) as if the term ‘payment 

2 amount benchmark quarter’ were de3 fined under paragraph (3)(D) as the 

4 first full calendar quarter after the 

5 day on which the drug was first mar6 keted; and 

7 ‘‘(iii) clause (ii) of paragraph (3)(C) 

8 shall be applied as if the term ‘benchmark 

9 period CPI–U’ were defined under para10 graph (4)(E) as if the reference to ‘July 

11 2019’ under such paragraph were a ref12 erence to ‘the first month of the first full 

13 calendar quarter after the day on which 

14 the drug was first marketed’. 

15 ‘‘(B) AFTER INITIAL PERIOD.—For quar16 ters beginning after such initial period— 

17 ‘‘(i) clause (i) of paragraph (3)(C) 

18 shall be applied as if the term ‘payment 

19 amount benchmark quarter’ were defined 

20 under paragraph (3)(D) as the first full 

21 calendar quarter for which the Secretary is 

22 able to compute an average sales price for 

23 the rebatable drug; and 

24 ‘‘(ii) clause (ii) of paragraph (3)(C) 

25 shall be applied as if the term ‘benchmark 


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1 period CPI–U’ were defined under para2 graph (4)(E) as if the reference to ‘July 

3 2019’ under such paragraph were a ref4 erence to ‘the first month of the first full 

5 calendar quarter for which the Secretary is 

6 able to compute an average sales price for 

7 the rebatable drug’. 

8 ‘‘(5) REBATE DEPOSITS.—Amounts paid as re9 bates under paragraph (1)(B) shall be deposited into 

10 the Federal Supplementary Medical Insurance Trust 

11 Fund established under section 1841. 

12 ‘‘(6) ENFORCEMENT.— 

13 ‘‘(A) CIVIL MONEY PENALTY.— 

14 ‘‘(i) IN GENERAL.—The Secretary 

15 shall impose a civil money penalty on a 

16 manufacturer that fails to comply with the 

17 requirements under paragraph (1)(B) with 

18 respect to providing a rebate for a 

19 rebatable drug for a rebate period for each 

20 such failure in an amount equal to the sum 

21 of— 

22 ‘‘(I) the rebate amount specified 

23 pursuant to paragraph (3) for such 

24 drug for such rebate period; and 

25 ‘‘(II) 25 percent of such amount. 


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1 ‘‘(ii) APPLICATION.—The provisions 

2 of section 1128A (other than subsections 

3 (a) (with respect to amounts of penalties 

4 or additional assessments) and (b)) shall 

5 apply to a civil money penalty under this 

6 subparagraph in the same manner as such 

7 provisions apply to a penalty or proceeding 

8 under section 1128A(a). 

9 ‘‘(B) NO PAYMENT FOR MANUFACTURERS

10 WHO FAIL TO PAY PENALTY.—If the manufac11 turer of a rebatable drug fails to pay a civil 

12 money penalty under subparagraph (A) with re13 spect to the failure to provide a rebate for a 

14 rebatable drug for a rebate period by a date 

15 specified by the Secretary after the imposition 

16 of such penalty, no payment shall be available 

17 under this part for such rebatable drug for cal18 endar quarters beginning on or after such date 

19 until the Secretary determines the manufac20 turer has paid the penalty due under such sub21 paragraph.’’. 

22 (b) IMPLEMENTATION.—Section 1847A(g) of the So23 cial Security Act (42 U.S.C. 1395w–3(g)) is amended— 

24 (1) in paragraph (4), by striking ‘‘and’’ at the 

25 end; 


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1 (2) in paragraph (5), by striking the period at 

2 the end and inserting ‘‘; and’’; and 

3 (3) by adding at the end the following new 

4 paragraph: 

5 ‘‘(6) determination of the rebate amount for a 

6 rebatable drug under paragraph (3) of subsection 

7 (h), including with respect to a new drug pursuant 

8 to paragraph (4) of such subsection, including— 

9 ‘‘(A) a decision by the Secretary with re10 spect to a request for reconsideration under 

11 paragraph (1)(C); and 

12 ‘‘(B) the determination of— 

13 ‘‘(i) the total number of units of the 

14 billing and payment code under paragraph 

15 (3)(A)(i); and 

16 ‘‘(ii) the inflation-adjusted payment 

17 amount under paragraph (3)(C).’’. 

18 (c) CONFORMING AMENDMENT TO PART B ASP CAL19 CULATION.—Section 1847A(c)(3) of the Social Security 

20 Act (42 U.S.C. 1395w–3a(c)(3)) is amended by inserting 

21 ‘‘or subsection (h)’’ after ‘‘section 1927’’. 

22 SEC. 372. MARKET BASED PART B PRICING INDEX. 

23 Notwithstanding any provision of part B of title 

24 XVIII of the Social Security Act, the Secretary of Health 

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1 able under such part based on an international pricing 

2 index. In using such an index, the Secretary shall take 

3 into account whether the market of each country included 

4 in such index is a price-controlled or free market and give 

5 more weight under such index to countries with market6 based drug policies. 

7 SEC. 373. INNOVATION MODEL TESTING OF MEDICARE 

8 DRUG PAYMENTS. 

9 Notwithstanding any provision of section 1115A, the 

10 Secretary of Health and Human Services may, under such 

11 section, test a model to integrate benefits provided for 

12 drugs under parts A, B, and D of title XVIII of the Social 

13 Security Act. 

14 SEC. 374. MODIFICATION OF MAXIMUM REBATE AMOUNT 

15 UNDER MEDICAID DRUG REBATE PROGRAM. 

16 (a) IN GENERAL.—Subparagraph (D) of section 

17 1927(c)(2) of the Social Security Act (42 U.S.C. 1396r– 

18 8(c)(2)) is amended to read as follows: 

19 ‘‘(D) MAXIMUM REBATE AMOUNT.— 

20 ‘‘(i) IN GENERAL.—Except as pro21 vided in clause (ii), in no case shall the 

22 sum of the amounts applied under para23 graph (1)(A)(ii) and this paragraph with 

24 respect to each dosage form and strength 

25 of a single source drug or an innovator 


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1 multiple source drug for a rebate period 

2 exceed— 

3 ‘‘(I) for rebate periods beginning 

4 after December 31, 2009, and before 

5 September 30, 2022, 100 percent of 

6 the average manufacturer price of the 

7 drug; and 

8 ‘‘(II) for rebate periods beginning 

9 on or after October 1, 2022, 125 per10 cent of the average manufacturer 

11 price of the drug. 

12 ‘‘(ii) NO MAXIMUM AMOUNT FOR

13 DRUGS IF AMP INCREASES OUTPACE IN14 FLATION.— 

15 ‘‘(I) IN GENERAL.—If the aver16 age manufacturer price with respect 

17 to each dosage form and strength of 

18 a single source drug or an innovator 

19 multiple source drug increases on or 

20 after October 1, 2021, and such in21 creased average manufacturer price 

22 exceeds the inflation-adjusted average 

23 manufacturer price determined with 

24 respect to such drug under subclause 

25 (II) for the rebate period, clause (i) 


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1 shall not apply and there shall be no 

2 limitation on the sum of the amounts 

3 applied under paragraph (1)(A)(ii) 

4 and this paragraph for the rebate pe5 riod with respect to each dosage form 

6 and strength of the single source drug 

7 or innovator multiple source drug. 

8 ‘‘(II) INFLATION-ADJUSTED AV9 ERAGE MANUFACTURER PRICE DE10 FINED.—In this clause, the term ‘in11 flation-adjusted average manufacturer 

12 price’ means, with respect to a single 

13 source drug or an innovator multiple 

14 source drug and a rebate period, the 

15 average manufacturer price for each 

16 dosage form and strength of the drug 

17 for the calendar quarter beginning 

18 July 1, 1990 (without regard to 

19 whether or not the drug has been sold 

20 or transferred to an entity, including 

21 a division or subsidiary of the manu22 facturer, after the 1st day of such 

23 quarter), increased by the percentage 

24 by which the consumer price index for 

25 all urban consumers (United States 


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1 city average) for the month before the 

2 month in which the rebate period be3 gins exceeds such index for September 

4 1990.’’. 

5 (b) TREATMENT OF SUBSEQUENTLY APPROVED

6 DRUGS.—Section 1927(c)(2)(B) of the Social Security Act 

7 (42 U.S.C. 1396r–8(c)(2)(B)) is amended by inserting 

8 ‘‘and clause (ii)(II) of subparagraph (D)’’ after ‘‘clause 

9 (ii)(II) of subparagraph (A)’’. 

10 (c) TECHNICAL AMENDMENTS.—Section 

11 1927(c)(3)(C)(ii)(IV) of the Social Security Act (42 

12 U.S.C. 1396r–9(c)(3)(C)(ii)(IV)) is amended— 

13 (1) by striking ‘‘subparagraph (A)’’ and insert14 ing ‘‘paragraph (3)(A)’’; and 

15 (2) by striking ‘‘this subparagraph’’ and insert16 ing ‘‘paragraph (3)(C)’’. 

17 Subtitle F—Medical Malpractice 

18 Reform 

19 SEC. 381. DEFINITIONS. 

20 In this Act: 

21 (1) ALTERNATIVE DISPUTE RESOLUTION SYS22 TEM; ADR.—The term ‘‘alternative dispute resolution 

23 system’’ or ‘‘ADR’’ means a system that provides 

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1 ner other than through a civil action brought in a 

2 State or Federal court. 

3 (2) CLAIMANT.—The term ‘‘claimant’’ means 

4 any person who brings a health care lawsuit, includ5 ing a person who asserts or claims a right to legal 

6 or equitable contribution, indemnity, or subrogation, 

7 arising out of a health care liability claim or action, 

8 and any person on whose behalf such a claim is as9 serted or such an action is brought, whether de10 ceased, incompetent, or a minor. 

11 (3) COLLATERAL SOURCE BENEFITS.—The 

12 term ‘‘collateral source benefits’’ means any amount 

13 paid or reasonably likely to be paid in the future to 

14 or on behalf of the claimant, or any service, product, 

15 or other benefit provided or reasonably likely to be 

16 provided in the future to or on behalf of the claim17 ant, as a result of the injury or wrongful death, pur18 suant to— 

19 (A) any State or Federal health, sickness, 

20 income-disability, accident, or workers’ com21 pensation law; 

22 (B) any health, sickness, income-disability, 

23 or accident insurance that provides health bene24 fits or income-disability coverage; 


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1 (C) any contract or agreement of any 

2 group, organization, partnership, or corporation 

3 to provide, pay for, or reimburse the cost of 

4 medical, hospital, dental, or income-disability 

5 benefits; and 

6 (D) any other publicly or privately funded 

7 program. 

8 (4) CONTINGENT FEE.—The term ‘‘contingent 

9 fee’’ includes all compensation to any person or per10 sons which is payable only if a recovery is effected 

11 on behalf of one or more claimants. 

12 (5) ECONOMIC DAMAGES.—The term ‘‘economic 

13 damages’’ means objectively verifiable monetary 

14 losses incurred as a result of the provision or use of 

15 (or failure to provide or use) health care services or 

16 medical products, such as past and future medical 

17 expenses, loss of past and future earnings, cost of 

18 obtaining domestic services, loss of employment, and 

19 loss of business or employment opportunities, unless 

20 otherwise defined under applicable State law. In no 

21 circumstances shall damages for health care services 

22 or medical products exceed the amount actually paid 

23 or incurred by or on behalf of the claimant. 

24 (6) FUTURE DAMAGES.—The term ‘‘future 

25 damages’’ means any damages that are incurred 


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1 after the date of judgment, settlement, or other reso2 lution (including mediation, or any other form of al3 ternative dispute resolution). 

4 (7) HEALTH CARE LAWSUIT.—The term 

5 ‘‘health care lawsuit’’ means any health care liability 

6 claim concerning the provision of goods or services 

7 for which coverage was provided in whole or in part 

8 via a Federal program, subsidy or tax benefit, or 

9 any health care liability action concerning the provi10 sion of goods or services for which coverage was pro11 vided in whole or in part via a Federal program, 

12 subsidy or tax benefit, brought in a State or Federal 

13 court or pursuant to an alternative dispute resolu14 tion system, against a health care provider regard15 less of the theory of liability on which the claim is 

16 based, or the number of claimants, plaintiffs, de17 fendants, or other parties, or the number of claims 

18 or causes of action, in which the claimant alleges a 

19 health care liability claim. Such term does not in20 clude a claim or action which is based on criminal 

21 liability; which seeks civil fines or penalties paid to 

22 Federal, State, or local government; or which is 

23 grounded in antitrust. 

24 (8) HEALTH CARE LIABILITY ACTION.—The 

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1 tion brought in a State or Federal court or pursuant 

2 to an alternative dispute resolution system, against 

3 a health care provider regardless of the theory of li4 ability on which the claim is based, or the number 

5 of plaintiffs, defendants, or other parties, or the 

6 number of causes of action, in which the claimant al7 leges a health care liability claim. 

8 (9) HEALTH CARE LIABILITY CLAIM.—The 

9 term ‘‘health care liability claim’’ means a demand 

10 by any person, whether or not pursuant to ADR, 

11 against a health care provider, including, but not 

12 limited to, third-party claims, cross-claims, counter13 claims, or contribution claims, which are based upon 

14 the provision or use of (or the failure to provide or 

15 use) health care services or medical products, re16 gardless of the theory of liability on which the claim 

17 is based, or the number of plaintiffs, defendants, or 

18 other parties, or the number of causes of action. 

19 (10) HEALTH CARE PROVIDER.—The term 

20 ‘‘health care provider’’ means any person or entity 

21 required by State or Federal laws or regulations to 

22 be licensed, registered, or certified to provide health 

23 care services, and being either so licensed, reg24 istered, or certified, or exempted from such require25 ment by other statute or regulation, as well as any 


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1 other individual or entity defined as a health care 

2 provider, health care professional, or health care in3 stitution under State law. 

4 (11) HEALTH CARE SERVICES.—The term 

5 ‘‘health care services’’ means the provision of any 

6 goods or services (including safety, professional, or 

7 administrative services directly related to health 

8 care) by a health care provider, or by any individual 

9 working under the supervision of a health care pro10 vider, that relates to the diagnosis, prevention, or 

11 treatment of any human disease or impairment, or 

12 the assessment or care of the health of human 

13 beings. 

14 (12) MEDICAL PRODUCT.—The term ‘‘medical 

15 product’’ means a drug, device, or biological product 

16 intended for humans, and the terms ‘‘drug’’, ‘‘de17 vice’’, and ‘‘biological product’’ have the meanings 

18 given such terms in sections 201(g)(1) and 201(h) 

19 of the Federal Food, Drug and Cosmetic Act (21 

20 U.S.C. 321(g)(1) and (h)) and section 351(a) of the 

21 Public Health Service Act (42 U.S.C. 262(a)), re22 spectively, including any component or raw material 

23 used therein, but excluding health care services. 

24 (13) NONECONOMIC DAMAGES.—The term 

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1 ical and emotional pain, suffering, inconvenience, 

2 physical impairment, mental anguish, disfigurement, 

3 loss of enjoyment of life, loss of society and compan4 ionship, loss of consortium (other than loss of do5 mestic service), hedonic damages, injury to reputa6 tion, and all other nonpecuniary losses of any kind 

7 or nature incurred as a result of the provision or use 

8 of (or failure to provide or use) health care services 

9 or medical products, unless otherwise defined under 

10 applicable State law. 

11 (14) RECOVERY.—The term ‘‘recovery’’ means 

12 the net sum recovered after deducting any disburse13 ments or costs incurred in connection with prosecu14 tion or settlement of the claim, including all costs 

15 paid or advanced by any person. Costs of health care 

16 incurred by the plaintiff and the attorneys’ office 

17 overhead costs or charges for legal services are not 

18 deductible disbursements or costs for such purpose. 

19 (15) REPRESENTATIVE.—The term ‘‘represent20 ative’’ means a legal guardian, attorney, person des21 ignated to make decisions on behalf of a patient 

22 under a medical power of attorney, or any person 

23 recognized in law or custom as a patient’s agent. 

24 (16) STATE.—The term ‘‘State’’ means each of 

25 the several States, the District of Columbia, the 


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1 Commonwealth of Puerto Rico, the Virgin Islands, 

2 Guam, American Samoa, the Northern Mariana Is3 lands, the Trust Territory of the Pacific Islands, and 

4 any other territory or possession of the United 

5 States, or any political subdivision thereof. 

6 SEC. 382. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS. 

7 (a) STATUTE OF LIMITATIONS.— 

8 (1) IN GENERAL.—Except as provided in para9 graph (2), the time for the commencement of a 

10 health care lawsuit shall be, whichever occurs first of 

11 the following: 

12 (A) Three years after the date of the oc13 currence of the breach or tort. 

14 (B) Three years after the date the medical 

15 or health care treatment that is the subject of 

16 the claim is completed. 

17 (C) One year after the claimant discovers, 

18 or through the use of reasonable diligence 

19 should have discovered, the injury. 

20 (2) TOLLING.—In no event shall the time for 

21 commencement of a health care lawsuit exceed 3 

22 years after the date of the occurrence of the breach 

23 or tort or 3 years after the date the medical or 

24 health care treatment that is the subject of the claim 


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1 is completed (whichever occurs first) unless tolled 

2 for any of the following— 

3 (A) upon proof of fraud; 

4 (B) intentional concealment; or 

5 (C) the presence of a foreign body, which 

6 has no therapeutic or diagnostic purpose or ef7 fect, in the person of the injured person. 

8 (3) ACTIONS BY A MINOR.—Actions by a minor 

9 shall be commenced within 3 years after the date of 

10 the occurrence of the breach or tort or 3 years after 

11 the date of the medical or health care treatment that 

12 is the subject of the claim is completed (whichever 

13 occurs first) except that actions by a minor under 

14 the full age of 6 years shall be commenced within 3 

15 years after the date of the occurrence of the breach 

16 or tort, 3 years after the date of the medical or 

17 health care treatment that is the subject of the claim 

18 is completed, or 1 year after the injury is discovered, 

19 or through the use of reasonable diligence should 

20 have been discovered, or prior to the minor’s 8th 

21 birthday, whichever provides a longer period. Such 

22 time limitation shall be tolled for minors for any pe23 riod during which a parent or guardian and a health 

24 care provider have committed fraud or collusion in 


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1 the failure to bring an action on behalf of the in2 jured minor. 

3 (b) STATE FLEXIBILITY.—No provision of subsection 

4 (a) shall be construed to preempt any State law (whether 

5 effective before, on, or after the date of the enactment of 

6 this Act) that— 

7 (1) specifies a time period of less than 3 years 

8 after the date of injury or less than 1 year after the 

9 claimant discovers, or through the use of reasonable 

10 diligence should have discovered, the injury, for the 

11 filing of a health care lawsuit; 

12 (2) that specifies a different time period for the 

13 filing of lawsuits by a minor; 

14 (3) that triggers the time period based on the 

15 date of the alleged negligence; or 

16 (4) establishes a statute of repose for the filing 

17 of a health care lawsuit. 

18 SEC. 383. COMPENSATING PATIENT INJURY. 

19 (a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL

20 ECONOMIC LOSSES IN HEALTH CARE LAWSUITS.—In any 

21 health care lawsuit, nothing in this Act shall limit a claim22 ant’s recovery of the full amount of the available economic 

23 damages, notwithstanding the limitation in subsection (b). 

24 (b) ADDITIONAL NONECONOMIC DAMAGES.—In any 

25 health care lawsuit, the amount of noneconomic damages, 


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1 if available, shall not exceed $250,000, regardless of the 

2 number of parties against whom the action is brought or 

3 the number of separate claims or actions brought with re4 spect to the same injury. 

5 (c) NO DISCOUNT OF AWARD FOR NONECONOMIC

6 DAMAGES.—For purposes of applying the limitation in 

7 subsection (b), future noneconomic damages shall not be 

8 discounted to present value. The jury shall not be in9 formed about the maximum award for noneconomic dam10 ages. An award for noneconomic damages in excess of 

11 $250,000 shall be reduced either before the entry of judg12 ment, or by amendment of the judgment after entry of 

13 judgment, and such reduction shall be made before ac14 counting for any other reduction in damages required by 

15 law. If separate awards are rendered for past and future 

16 noneconomic damages and the combined awards exceed 

17 $250,000, the future noneconomic damages shall be re18 duced first. 

19 (d) FAIR SHARE RULE.—In any health care lawsuit, 

20 each party shall be liable for that party’s several share 

21 of any damages only and not for the share of any other 

22 person. Each party shall be liable only for the amount of 

23 damages allocated to such party in direct proportion to 

24 such party’s percentage of responsibility. Whenever a 

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1 rate judgment shall be rendered against each such party 

2 for the amount allocated to such party. For purposes of 

3 this section, the trier of fact shall determine the propor4 tion of responsibility of each party for the claimant’s 

5 harm. 

6 (e) STATE FLEXIBILITY.—No provision of this sec7 tion shall be construed to preempt any State law (whether 

8 effective before, on, or after the date of the enactment of 

9 this Act) that specifies a particular monetary amount of 

10 economic or noneconomic damages (or the total amount 

11 of damages) that may be awarded in a health care lawsuit, 

12 regardless of whether such monetary amount is greater 

13 or lesser than is provided for under this section. 

14 SEC. 384. MAXIMIZING PATIENT RECOVERY. 

15 (a) COURT SUPERVISION OF SHARE OF DAMAGES

16 ACTUALLY PAID TO CLAIMANTS.—In any health care law17 suit, the court shall supervise the arrangements for pay18 ment of damages to protect against conflicts of interest 

19 that may have the effect of reducing the amount of dam20 ages awarded that are actually paid to claimants. In par21 ticular, in any health care lawsuit in which the attorney 

22 for a party claims a financial stake in the outcome by vir23 tue of a contingent fee, the court shall have the power 

24 to restrict the payment of a claimant’s damage recovery 

25 to such attorney, and to redirect such damages to the 


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1 claimant based upon the interests of justice and principles 

2 of equity. In no event shall the total of all contingent fees 

3 for representing all claimants in a health care lawsuit ex4 ceed the following limits: 

5 (1) Forty percent of the first $50,000 recovered 

6 by the claimant(s). 

7 (2) Thirty-three and one-third percent of the 

8 next $50,000 recovered by the claimant(s). 

9 (3) Twenty-five percent of the next $500,000 

10 recovered by the claimant(s). 

11 (4) Fifteen percent of any amount by which the 

12 recovery by the claimant(s) is in excess of $600,000. 

13 (b) APPLICABILITY.—The limitations in this section 

14 shall apply whether the recovery is by judgment, settle15 ment, mediation, arbitration, or any other form of alter16 native dispute resolution. In a health care lawsuit involv17 ing a minor or incompetent person, a court retains the 

18 authority to authorize or approve a fee that is less than 

19 the maximum permitted under this section. The require20 ment for court supervision in the first two sentences of 

21 subsection (a) applies only in civil actions. 

22 (c) STATE FLEXIBILITY.—No provision of this sec23 tion shall be construed to preempt any State law (whether 

24 effective before, on, or after the date of the enactment of 

25 this Act) that specifies a lesser percentage or lesser total 


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1 value of damages which may be claimed by an attorney 

2 representing a claimant in a health care lawsuit. 

3 SEC. 385. AUTHORIZATION OF PAYMENT OF FUTURE DAM4 AGES TO CLAIMANTS IN HEALTH CARE LAW5 SUITS. 

6 (a) IN GENERAL.—In any health care lawsuit, if an 

7 award of future damages, without reduction to present 

8 value, equaling or exceeding $50,000 is made against a 

9 party with sufficient insurance or other assets to fund a 

10 periodic payment of such a judgment, the court shall, at 

11 the request of any party, enter a judgment ordering that 

12 the future damages be paid by periodic payments, in ac13 cordance with the Uniform Periodic Payment of Judg14 ments Act promulgated by the National Conference of 

15 Commissioners on Uniform State Laws. 

16 (b) APPLICABILITY.—This section applies to all ac17 tions which have not been first set for trial or retrial be18 fore the effective date of this Act. 

19 (c) STATE FLEXIBILITY.—No provision of this sec20 tion shall be construed to preempt any State law (whether 

21 effective before, on, or after the date of the enactment of 

22 this Act) that specifies periodic payments for future dam23 ages at any amount other than $50,000 or that mandates 

24 such payments absent the request of either party. 


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1 SEC. 386. PRODUCT LIABILITY FOR HEALTH CARE PRO2 VIDERS. 

3 A health care provider who prescribes, or who dis4 penses pursuant to a prescription, a medical product ap5 proved, licensed, or cleared by the Food and Drug Admin6 istration shall not be named as a party to a product liabil7 ity lawsuit involving such product and shall not be liable 

8 to a claimant in a class action lawsuit against the manu9 facturer, distributor, or seller of such product. 

10 SEC. 387. EFFECT ON OTHER LAWS. 

11 (a) VACCINE INJURY.— 

12 (1) To the extent that title XXI of the Public 

13 Health Service Act establishes a Federal rule of law 

14 applicable to a civil action brought for a vaccine-re15 lated injury or death— 

16 (A) this Act does not affect the application 

17 of the rule of law to such an action; and 

18 (B) any rule of law prescribed by this sub19 title in conflict with a rule of law of such title 

20 XXI shall not apply to such action. 

21 (2) If there is an aspect of a civil action 

22 brought for a vaccine-related injury or death to 

23 which a Federal rule of law under title XXI of the 

24 Public Health Service Act does not apply, then this 

25 subtitle or otherwise applicable law (as determined 


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1 under this subtitle) will apply to such aspect of such 

2 action. 

3 (b) OTHER FEDERAL LAW.—Except as provided in 

4 this section, nothing in this subtitle shall be deemed to 

5 affect any defense available to a defendant in a health care 

6 lawsuit or action under any other provision of Federal law. 

7 SEC. 388. LIMITATION ON EXPERT WITNESS TESTIMONY. 

8 (a) IN GENERAL.—No person in a health care profes9 sion requiring licensure under the laws of a State shall 

10 be competent to testify in any court of law to establish 

11 the following facts— 

12 (1) the recognized standard of acceptable pro13 fessional practice and the specialty thereof, if any, 

14 that the defendant practices, which shall be the type 

15 of acceptable professional practice recognized in the 

16 defendant’s community or in a community similar to 

17 the defendant’s community that was in place at the 

18 time the alleged injury or wrongful action occurred; 

19 (2) that the defendant acted with less than or 

20 failed to act with ordinary and reasonable care in ac21 cordance with the recognized standard; and 

22 (3) that as a proximate result of the defend23 ant’s negligent act or omission, the claimant suf24 fered injuries which would not otherwise have oc25 curred, 


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1 unless the person was licensed to practice, in the State 

2 or a contiguous bordering State, a profession or specialty 

3 which would make the person’s expert testimony relevant 

4 to the issues in the case and had practiced this profession 

5 or specialty in one of these States during the year pre6 ceding the date that the alleged injury or wrongful act 

7 occurred. 

8 (b) APPLICABILITY.—The requirements set forth in 

9 subsection (a) shall also apply to expert witnesses testi10 fying for the defendant as rebuttal witnesses. 

11 (c) WAIVER AUTHORITY.—The court may waive the 

12 requirements in this subsection if it determines that the 

13 appropriate witnesses otherwise would not be available. 

14 SEC. 389. EXPERT WITNESS QUALIFICATIONS. 

15 (a) IN GENERAL.—In any health care lawsuit, an in16 dividual shall not give expert testimony on the appropriate 

17 standard of practice or care involved unless the individual 

18 is licensed as a health professional in one or more States 

19 and the individual meets the following criteria: 

20 (1) If the party against whom or on whose be21 half the testimony is to be offered is or claims to be 

22 a specialist, the expert witness shall specialize at the 

23 time of the occurrence that is the basis for the law24 suit in the same specialty or claimed specialty as the 

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1 mony is to be offered. If the party against whom or 

2 on whose behalf the testimony is to be offered is or 

3 claims to be a specialist who is board certified, the 

4 expert witness shall be a specialist who is board cer5 tified in that specialty or claimed specialty. 

6 (2) During the 1-year period immediately pre7 ceding the occurrence of the action that gave rise to 

8 the lawsuit, the expert witness shall have devoted a 

9 majority of the individual’s professional time to one 

10 or more of the following: 

11 (A) The active clinical practice of the same 

12 health profession as the defendant and, if the 

13 defendant is or claims to be a specialist, in the 

14 same specialty or claimed specialty. 

15 (B) The instruction of students in an ac16 credited health professional school or accredited 

17 residency or clinical research program in the 

18 same health profession as the defendant and, if 

19 the defendant is or claims to be a specialist, in 

20 an accredited health professional school or ac21 credited residency or clinical research program 

22 in the same specialty or claimed specialty. 

23 (3) If the defendant is a general practitioner, 

24 the expert witness shall have devoted a majority of 

25 the witness’s professional time in the 1-year period 


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1 preceding the occurrence of the action giving rise to 

2 the lawsuit to one or more of the following: 

3 (A) Active clinical practice as a general 

4 practitioner. 

5 (B) Instruction of students in an accred6 ited health professional school or accredited 

7 residency or clinical research program in the 

8 same health profession as the defendant. 

9 (b) LAWSUITS AGAINST ENTITIES.—If the defendant 

10 in a health care lawsuit is an entity that employs a person 

11 against whom or on whose behalf the testimony is offered, 

12 the provisions of subsection (a) apply as if the person were 

13 the party or defendant against whom or on whose behalf 

14 the testimony is offered. 

15 (c) POWER OF COURT.—Nothing in this section shall 

16 limit the power of the trial court in a health care lawsuit 

17 to disqualify an expert witness on grounds other than the 

18 qualifications set forth under this subsection. 

19 (d) LIMITATION.—An expert witness in a health care 

20 lawsuit shall not be permitted to testify if the fee of the 

21 witness is in any way contingent on the outcome of the 

22 lawsuit. 

23 (e) STATE FLEXIBILITY.—No provision of this sec24 tion shall be construed to preempt any State law (whether 

25 effective before, on, or after the date of the enactment of 


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1 this Act) that places additional qualification requirements 

2 upon any individual testifying as an expert witness. 

3 SEC. 390. COMMUNICATIONS FOLLOWING UNANTICIPATED 

4 OUTCOME. 

5 (a) PROVIDER COMMUNICATIONS.—In any health 

6 care liability action, any and all statements, affirmations, 

7 gestures, or conduct expressing apology, fault, sympathy, 

8 commiseration, condolence, compassion, or a general sense 

9 of benevolence which are made by a health care provider 

10 or an employee of a health care provider to the patient, 

11 a relative of the patient, or a representative of the patient 

12 and which relate to the discomfort, pain, suffering, injury, 

13 or death of the patient as the result of the unanticipated 

14 outcome of medical care shall be inadmissible for any pur15 pose as evidence of an admission of liability or as evidence 

16 of an admission against interest. 

17 (b) STATE FLEXIBILITY.—No provision of this sec18 tion shall be construed to preempt any State law (whether 

19 effective before, on, or after the date of the enactment of 

20 this Act) that makes additional communications inadmis21 sible as evidence of an admission of liability or as evidence 

22 of an admission against interest. 

23 SEC. 391. AFFIDAVIT OF MERIT. 

24 (a) REQUIRED FILING.—Subject to subsection (b), 

25 the plaintiff in a health care lawsuit alleging negligence 


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1 or, if the plaintiff is represented by an attorney, the plain2 tiff’s attorney shall file simultaneously with the health 

3 care lawsuit an affidavit of merit signed by a health pro4 fessional who meets the requirements for an expert wit5 ness under section 242 of this Act. The affidavit of merit 

6 shall certify that the health professional has reviewed the 

7 notice and all medical records supplied to him or her by 

8 the plaintiff’s attorney concerning the allegations con9 tained in the notice and shall contain a statement of each 

10 of the following: 

11 (1) The applicable standard of practice or care. 

12 (2) The health professional’s opinion that the 

13 applicable standard of practice or care was breached 

14 by the health professional or health facility receiving 

15 the notice. 

16 (3) The actions that should have been taken or 

17 omitted by the health professional or health facility 

18 in order to have complied with the applicable stand19 ard of practice or care. 

20 (4) The manner in which the breach of the 

21 standard of practice or care was the proximate cause 

22 of the injury alleged in the notice. 

23 (5) A listing of the medical records reviewed. 

24 (b) FILING EXTENSION.—Upon motion of a party for 

25 good cause shown, the court in which the complaint is filed 


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1 may grant the plaintiff or, if the plaintiff is represented 

2 by an attorney, the plaintiff’s attorney an additional 28 

3 days in which to file the affidavit required under sub4 section (a). 

5 (c) STATE FLEXIBILITY.—No provision of this sec6 tion shall be construed to preempt any State law (whether 

7 effective before, on, or after the date of the enactment of 

8 this Act) that establishes additional requirements for the 

9 filing of an affidavit of merit or similar pre-litigation docu10 mentation. 

11 SEC. 392. NOTICE OF INTENT TO COMMENCE LAWSUIT. 

12 (a) ADVANCE NOTICE.—A person shall not com13 mence a health care lawsuit against a health care provider 

14 unless the person has given the health care provider 90 

15 days written notice before the action is commenced. 

16 (b) EXCEPTIONS.—A health care lawsuit against a 

17 health care provider filed within 6 months of the statute 

18 of limitations expiring as to any claimant, or within 1 year 

19 of the statute of repose expiring as to any claimant, shall 

20 be exempt from compliance with this section. 

21 (c) STATE FLEXIBILITY.—No provision of this sec22 tion shall be construed to preempt any State law (whether 

23 effective before, on, or after the date of the enactment of 

24 this Act) that establishes a different time period for the 

25 filing of written notice. 


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1 SEC. 393. LIMITATION ON LIABILITY FOR VOLUNTEER 

2 HEALTH CARE PROFESSIONALS. 

3 (a) IN GENERAL.—Title II of the Public Health Serv4 ice Act (42 U.S.C. 202 et seq.) is amended by inserting 

5 after section 224 the following: 

6 ‘‘SEC. 224A. LIMITATION ON LIABILITY FOR VOLUNTEER 

7 HEALTH CARE PROFESSIONALS. 

8 ‘‘(a) LIMITATION ON LIABILITY.—A physician shall 

9 not be liable under Federal or State law in any civil action 

10 for any harm caused by an act or omission of such physi11 cian, or attending medical personnel supporting such phy12 sician, if such act or omission— 

13 ‘‘(1) occurs in the course of furnishing qualified 

14 charity care (as such term is defined in section 

15 199B of the Internal Revenue Code of 1986); and 

16 ‘‘(2) was not grossly negligent. 

17 ‘‘(b) PREEMPTION.—This section preempts the laws 

18 of a State or any political subdivision of a State to the 

19 extent that such laws are inconsistent with this section, 

20 unless such laws provide greater protection from liability 

21 for a defendant. 

22 ‘‘(c) DEFINITIONS.—In this section: 

23 ‘‘(1) PHYSICIAN.—The term ‘physician’ has the 

24 meaning given such term by section 1861(r) of the 

25 Social Security Act. 


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•S 4796 IS

1 ‘‘(2) ATTENDING MEDICAL PERSONNEL.—The 

2 term ‘attending medical personnel’ means an indi3 vidual who is licensed to directly support a physician 

4 in furnishing medical services.’’. 

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

6 this section shall apply to any claim filed to the extent 

7 that it is with respect to acts or omissions occurring after 

8 the date of the enactment of this Act. 

9 SEC. 394. RULES OF CONSTRUCTION. 

10 (a) HEALTH CARE LAWSUITS.—Unless otherwise 

11 specified in this subtitle, the provisions governing health 

12 care lawsuits set forth in this subtitle preempt, subject to 

13 subsections (b) and (c), State law to the extent that State 

14 law prevents the application of any provisions of law estab15 lished by or under this subtitle. The provisions governing 

16 health care lawsuits set forth in this subtitle supersede 

17 chapter 171 of title 28, United States Code, to the extent 

18 that such chapter— 

19 (1) provides for a greater amount of damages 

20 or contingent fees, a longer period in which a health 

21 care lawsuit may be commenced, or a reduced appli22 cability or scope of periodic payment of future dam23 ages, than provided in this subtitle; or 

24 (2) prohibits the introduction of evidence re25 garding collateral source benefits, or mandates or 


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•S 4796 IS

1 permits subrogation or a lien on collateral source 

2 benefits. 

3 (b) PROTECTION OF STATES’ RIGHTS AND OTHER

4 LAWS.—Any issue that is not governed by any provision 

5 of law established by or under this subtitle (including 

6 State standards of negligence) shall be governed by other7 wise applicable State or Federal law. 

8 (c) STATE FLEXIBILITY.—No provision of this sub9 title shall be construed to preempt any defense available 

10 to a party in a health care lawsuit under any other provi11 sion of State or Federal law. 

12 SEC. 395. EFFECTIVE DATE. 

13 This subtitle shall apply to any health care lawsuit 

14 brought in a Federal or State court, or subject to an alter15 native dispute resolution system, that is initiated on or 

16 after the date of the enactment of this subtitle, except that 

17 any health care lawsuit arising from an injury occurring 

18 prior to the date of the enactment of this subtitle shall 

19 be governed by the applicable statute of limitations provi20 sions in effect at the time the cause of action accrued. 


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•S 4796 IS

1 TITLE IV—MEDICARE AND 

2 MEDICAID REFORMS 

3 Subtitle A—Medicaid Reforms 

4 SEC. 401. MEDICAID PAYMENT REFORM. 

5 (a) IN GENERAL.—Title XIX of the Social Security 

6 Act (42 U.S.C. 1396 et seq.) is amended by inserting after 

7 section 1903 the following section: 

8 ‘‘SEC. 1903A. REFORMED PAYMENT TO STATES. 

9 ‘‘(a) REFORMED PAYMENT SYSTEM.— 

10 ‘‘(1) IN GENERAL.—For quarters beginning on 

11 or after the implementation date (as defined in sub12 section (k)(1)), in the case of a State that elects (in 

13 a time and manner specified by the Secretary) to 

14 apply this section, in lieu of amounts otherwise pay15 able to such State under this title (including any 

16 payments attributable to section 1923), except as 

17 otherwise provided in this section, the amount pay18 able to such State shall be equal to the sum of the 

19 following: 

20 ‘‘(A) ADJUSTED AGGREGATE BENE21 FICIARY-BASED AMOUNT.—The aggregate bene22 ficiary-based amount specified in subsection (b) 

23 for the quarter and the State, adjusted under 

24 subsection (e). 


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1 ‘‘(B) CHRONIC CARE QUALITY BONUS.— 

2 The amount (if any) of the chronic care quality 

3 bonus payment specified in subsection (f) for 

4 the quarter for the State. 

5 ‘‘(2) REQUIREMENT OF STATE SHARE.— 

6 ‘‘(A) IN GENERAL.—A State shall make, 

7 from non-Federal funds, expenditures in an 

8 amount equal to its State share (as determined 

9 under subparagraph (B)) for a quarter for 

10 items, services, and other costs for which, but 

11 for paragraph (1), Federal funds would have 

12 been payable under this title. 

13 ‘‘(B) STATE SHARE.—The State share for 

14 a State for a quarter in a fiscal year is equal 

15 to the product of— 

16 ‘‘(i) the aggregate beneficiary-based 

17 amount specified in subsection (b) for the 

18 quarter and the State; and 

19 ‘‘(ii) the ratio of— 

20 ‘‘(I) the State percentage de21 scribed in subparagraph (D)(ii) for 

22 such State and fiscal year; to 

23 ‘‘(II) the Federal percentage de24 scribed in subparagraph (D)(i) for 

25 such State and fiscal year. 


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1 ‘‘(C) NONPAYMENT FOR FAILURE TO PAY

2 STATE SHARE.— 

3 ‘‘(i) IN GENERAL.—If a State fails to 

4 expend the amount required under sub5 paragraph (A) for a quarter in a fiscal 

6 year, the amount payable to the State 

7 under paragraph (1) shall be reduced by 

8 the product of the amount by which the 

9 State payment is less than the State share 

10 and the ratio of— 

11 ‘‘(I) the Federal percentage de12 scribed in subparagraph (D)(i) for 

13 such State and fiscal year; to 

14 ‘‘(II) the State percentage de15 scribed in subparagraph (D)(ii) for 

16 such State and fiscal year. 

17 ‘‘(ii) GRACE PERIOD.—A State shall 

18 not be considered to have failed to provide 

19 payment of its required State share for a 

20 quarter under subparagraph (A) if the ag21 gregate State payment towards the State’s 

22 required State share for the 4-quarter pe23 riod beginning with such quarter exceeds 

24 the required State share amount for such 

25 4-quarter period. 


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1 ‘‘(D) FEDERAL AND STATE PERCENT2 AGES.—In this paragraph, with respect to a 

3 State and a fiscal year: 

4 ‘‘(i) FEDERAL PERCENTAGE.—The 

5 Federal percentage described in this clause 

6 is 75 percent or, if higher, the Federal 

7 medical assistance percentage for such 

8 State for such fiscal year. 

9 ‘‘(ii) STATE PERCENTAGE.—The State 

10 percentage described in this clause is 100 

11 percent minus the Federal percentage de12 scribed in clause (i). 

13 ‘‘(E) RULES FOR CREDITING TOWARD

14 STATE SHARE.— 

15 ‘‘(i) GENERAL LIMITATION TO MATCH16 ABLE EXPENDITURES.—A payment for ex17 penditures shall not be counted toward the 

18 State share under subparagraph (A) unless 

19 Federal payments may be used for such 

20 expenditures consistent with paragraph 

21 (3)(B). 

22 ‘‘(ii) FURTHER LIMITATIONS ON AL23 LOWABLE EXPENDITURES.—A payment for 

24 expenditures shall not be counted towards 


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•S 4796 IS

1 the State share under subparagraph (A) if 

2 the expenditure is for any of the following: 

3 ‘‘(I) ABORTION.—Expenditures 

4 for an abortion. 

5 ‘‘(II) INTERGOVERNMENTAL

6 TRANSFERS.—An expenditure that is 

7 attributable to an intergovernmental 

8 transfer. 

9 ‘‘(III) CERTIFIED PUBLIC EX10 PENDITURES.—An expenditure that is 

11 attributable to certified public expend12 itures. 

13 ‘‘(iii) CREDITING FRAUD AND ABUSE

14 RECOVERIES.—Amounts recovered by a 

15 State through the operation of its Medicaid 

16 fraud and abuse control unit described in 

17 section 1903(q) shall be fully counted to18 ward the State share under subparagraph 

19 (A). 

20 ‘‘(F) CONSTRUCTION.—Nothing in the 

21 paragraph shall be construed as preventing a 

22 State from expending, from non-Federal funds, 

23 an amount under this title in excess of the 

24 amount of the State share. 


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1 ‘‘(G) DETERMINATION BASED UPON SUB2 MITTED CLAIMS.—In applying this paragraph 

3 with respect to expenditures of a State for a 

4 quarter, the determination of the expenditures 

5 for such State for such quarter shall be made 

6 after the end of the period (which, as of the 

7 date of the enactment of this section, is 2 

8 years) for which the Secretary accepts claims 

9 for payment under this title with respect to 

10 such quarter. 

11 ‘‘(3) USE OF FEDERAL PAYMENTS.— 

12 ‘‘(A) APPLICATION OF MEDICAID LIMITA13 TIONS.—A State may only use Federal pay14 ments received under subsection (a) for expend15 itures for which Federal funds would have been 

16 payable under this title but for this section. 

17 ‘‘(B) LIMITATION FOR CERTAIN ELIGI18 BLES.— 

19 ‘‘(i) APPLICATION OF 100 PERCENT

20 FEDERAL POVERTY LINE LIMIT ON ELIGI21 BILITY.—Subject to clause (iii), a State 

22 may not use such Federal payments to 

23 provide medical assistance for an indi24 vidual who has an income (as determined 

25 under clause (ii)) that exceeds 100 percent 


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•S 4796 IS

1 of the poverty line (as defined in section 

2 2110(c)(5)) applicable to a family of the 

3 size involved. 

4 ‘‘(ii) DETERMINATION OF INCOME

5 USING MODIFIED ADJUSTED GROSS IN6 COME WITHOUT ANY 5 PERCENT IN7 CREASE.—In determining income for pur8 poses of clause (i) under section 

9 1902(e)(14) (relating to modified adjusted 

10 gross income), the following rules shall 

11 apply: 

12 ‘‘(I) APPLICATION OF SPEND

13 DOWN.—The State shall take into ac14 count the costs incurred for medical 

15 care or for any other type of remedial 

16 care recognized under State law in the 

17 same manner and to the same extent 

18 that such State takes such costs into 

19 account for purposes of section 

20 1902(a)(17). 

21 ‘‘(II) DISREGARD OF 5 PERCENT

22 INCREASE.—Subparagraph (I) of sec23 tion 1902(e)(14) (relating to a 5 per24 cent reduction) shall not apply. 


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•S 4796 IS

1 ‘‘(iii) EXCEPTION.—Clause (i) shall 

2 not apply to an individual who is— 

3 ‘‘(I) a woman described in clause 

4 (i) of section 1903(v)(4)(A); 

5 ‘‘(II) a child who is an individual 

6 described in clause (i) of section 

7 1905(a); 

8 ‘‘(III) enrolled in a State plan 

9 under this title as of the date of the 

10 enactment of this section for the pe11 riod of continuous enrollment; or 

12 ‘‘(IV) described in section 

13 1902(e)(14)(D) (relating to modified 

14 adjusted gross income). 

15 ‘‘(iv) CLARIFICATION RELATED TO

16 COMMUNITY SPOUSE.—Nothing in this 

17 subparagraph shall supersede the applica18 tion of section 1924 (related to community 

19 spouse income and assets). 

20 ‘‘(4) EXCEPTIONS FOR PASS-THROUGH PAY21 MENTS.— 

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

23 not apply, and amounts shall continue to be 

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•S 4796 IS

1 ments (and related administrative costs and ex2 penditures): 

3 ‘‘(i) PAYMENTS TO TERRITORIES.— 

4 Payments to a State other than the 50 

5 States and the District of Columbia. 

6 ‘‘(ii) MEDICARE COST-SHARING.— 

7 Payments attributable to Medicare cost8 sharing under section 1905(p). 

9 ‘‘(iii) PEDIATRIC VACCINES.—Pay10 ments attributable to section 1928. 

11 ‘‘(iv) EMERGENCY SERVICES FOR CER12 TAIN INDIVIDUALS.—Payments for treat13 ment of emergency medical conditions at14 tributable to the application of section 

15 1903(v)(2). 

16 ‘‘(v) INDIAN HEALTH CARE FACILI17 TIES.—Payments for medical assistance 

18 described in the third sentence of section 

19 1905(b). 

20 ‘‘(vi) EMPLOYER-SPONSORED INSUR21 ANCE (ESI).—Payments for medical assist22 ance attributable to payments to employers 

23 for employer-sponsored health benefits cov24 erage. 


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•S 4796 IS

1 ‘‘(vii) OTHER POPULATIONS WITH

2 LIMITED BENEFIT COVERAGE.—Other pay3 ments that are determined by the Sec4 retary to be related to a specified popu5 lation for which the medical assistance 

6 under this title is limited and does not in7 clude any inpatient, nursing facility, or 

8 long-term care services. 

9 ‘‘(B) CERTAIN EXPENSES.—Paragraph (1) 

10 shall not apply, and amounts shall continue to 

11 be payable under this title (and not under sub12 section (a)), in the case of the following: 

13 ‘‘(i) ADMINISTRATION OF MEDICARE

14 PRESCRIPTION DRUG BENEFIT.—Expendi15 tures described in section 1935(b) (relating 

16 to administration of the Medicare prescrip17 tion drug benefit). 

18 ‘‘(ii) PAYMENTS FOR HIT BONUSES.— 

19 Payments under section 1903(a)(3)(F) (re20 lating to payments to encourage the adop21 tion and use of certified EHR technology). 

22 ‘‘(iii) PAYMENTS FOR DESIGN, DEVEL23 OPMENT, AND INSTALLATION OF MMIS AND

24 ELIGIBILITY SYSTEMS.—Payments under 

25 subparagraphs (A)(i) and (H)(i) of section 


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•S 4796 IS

1 1903(a)(3) for expenditures for design, de2 velopment, and installation of the Medicaid 

3 management information systems and 

4 mechanized verification and information 

5 retrieval systems (related to eligibility). 

6 ‘‘(5) PAYMENT OF AMOUNTS.— 

7 ‘‘(A) IN GENERAL.—Except as the Sec8 retary may otherwise provide, amounts shall be 

9 payable to a State under subsection (a) in the 

10 same manner as amounts are payable under 

11 subsection (d) of section 1903 to a State under 

12 subsection (a) of such section. 

13 ‘‘(B) INFORMATION AND FORMS.— 

14 ‘‘(i) SUBMISSION.—As a condition of 

15 receiving payment under subsection (a), a 

16 State shall submit such information, in 

17 such form, and manner, as the Secretary 

18 shall specify, including information nec19 essary to make the computations under 

20 subsections (c)(2)(C) and (e). 

21 ‘‘(ii) UNIFORM REPORTING.—The 

22 Secretary shall develop such forms as may 

23 be needed to assure a system of uniform 

24 reporting of such information across 

25 States. 


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•S 4796 IS

1 ‘‘(C) REQUIRED REPORTING OF INFORMA2 TION ON MEDICAL LOSS RATIOS FOR MANAGED

3 CARE.—The information required to be reported 

4 under subparagraph (B)(i) shall include infor5 mation on the medical loss ratio with respect to 

6 coverage provided under each Medicaid man7 aged care plan with a contract with the State 

8 under section 1903(m) or 1932. 

9 ‘‘(b) AGGREGATE BENEFICIARY-BASED AMOUNT.— 

10 ‘‘(1) IN GENERAL.—The aggregate beneficiary11 based amount specified in this subsection for a State 

12 for a quarter is equal to the sum of the products, 

13 for each of the categories of Medicaid beneficiaries 

14 specified in paragraph (2), of the following: 

15 ‘‘(A) BENEFICIARY-BASED QUARTERLY

16 AMOUNT.—The beneficiary-based quarterly 

17 amount for such category computed under sub18 section (c) for such State for such quarter. 

19 ‘‘(B) NUMBER OF INDIVIDUALS IN CAT20 EGORY.—Subject to subsection (d), the average 

21 number of Medicaid beneficiaries enrolled in 

22 such category in the State in such quarter. 

23 ‘‘(2) CATEGORIES.—The categories specified in 

24 this paragraph are the following: 


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•S 4796 IS

1 ‘‘(A) ELDERLY.—A category of Medicaid 

2 beneficiaries who are 65 years of age or older. 

3 ‘‘(B) BLIND OR DISABLED.—A category of 

4 Medicaid beneficiaries not described in subpara5 graph (A) who are described in section 

6 1937(a)(2)(B)(ii). 

7 ‘‘(C) CHILDREN.—A category of Medicaid 

8 beneficiaries not described in subparagraph (B) 

9 who are under 21 years of age. 

10 ‘‘(D) OTHER ADULTS.—A category of any 

11 Medicaid beneficiaries who are not described in 

12 a previous subparagraph of this paragraph. 

13 ‘‘(c) COMPUTATION OF PER BENEFICIARY, PER CAT14 EGORY QUARTERLY AMOUNT.— 

15 ‘‘(1) IN GENERAL.—For a State, for each cat16 egory of beneficiary for a quarter— 

17 ‘‘(A) FIRST REFORM YEAR.—For quarters 

18 in the first reform year (as defined in sub19 section (k)(2)), the beneficiary-based quarterly 

amount is equal to 1 20 ⁄4 of the base average per 

21 beneficiary Federal payments for such State for 

22 such category determined under paragraph (2), 

23 increased by a factor that reflects the sum of 

24 the following: 


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•S 4796 IS

1 ‘‘(i) HISTORICAL MEDICAL CARE COM2 PONENT OF CPI THROUGH PREVIOUS RE3 FORM YEAR.—The percentage increase in 

4 the historical medical care component of 

5 the Consumer Price Index for all urban 

6 consumers (U.S. city average) from the 

7 midpoint of the base fiscal year (as defined 

8 in paragraph (6)) to the midpoint of the 

9 fiscal year preceding the first reform year. 

10 ‘‘(ii) PROJECTED MEDICAL CARE COM11 PONENT OF CPI FOR THE FIRST REFORM

12 YEAR.—The percentage increase in the 

13 projected medical care component of the 

14 Consumer Price Index for all urban con15 sumers (U.S. city average) from the mid16 point of the previous fiscal year referred to 

17 in clause (i) to the midpoint of the first re18 form year. 

19 ‘‘(B) SECOND AND THIRD REFORM

20 YEARS.—The beneficiary-based quarterly 

21 amount for a State for a category for quarters 

22 in the second reform year or the third reform 

23 year is equal to the beneficiary-based quarterly 

24 amount under this paragraph for such State 

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•S 4796 IS

1 creased by the per beneficiary percentage in2 crease (as defined in subparagraph (E)) for 

3 such category and reform year. 

4 ‘‘(C) FOURTH THROUGH TENTH REFORM

5 YEARS.—The beneficiary-based quarterly 

6 amount for a State for a category for quarters 

7 in a reform year beginning with the fourth re8 form year and ending with the tenth reform 

9 year is— 

10 ‘‘(i) in the case of a State that is a 

11 high per beneficiary State or a low per 

12 beneficiary State (as defined in paragraph 

13 (4)(B)(iii)) for the category, the amount 

14 determined under clause (i) or (ii) of para15 graph (4)(B) for such State, category, and 

16 reform year; or 

17 ‘‘(ii) in the case of any other State, 

18 the beneficiary-based quarterly amount 

19 under this paragraph for such State and 

20 category for the previous reform year in21 creased by the per beneficiary percentage 

22 increase for such category and reform 

23 year. 

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•S 4796 IS

1 based quarterly amount for a State for a cat2 egory for quarters in a reform year beginning 

3 with the eleventh reform year is equal to the 

4 beneficiary-based quarterly amount under this 

5 paragraph for such State and category for the 

6 previous reform year increased by the per bene7 ficiary percentage increase for such category 

8 and reform year. 

9 ‘‘(E) ANNUAL PERCENTAGE INCREASE BE10 GINNING WITH SECOND REFORM YEAR.—For 

11 purposes of this subsection, the term ‘per bene12 ficiary percentage increase’ means, for a reform 

13 year, the sum of— 

14 ‘‘(i) the projected percentage change 

15 in nominal gross domestic product from 

16 the midpoint of the previous reform year to 

17 the midpoint of the reform year for which 

18 the percentage increase is being applied; 

19 and 

20 ‘‘(ii) one percentage point. 

21 ‘‘(2) BASE PER BENEFICIARY, PER CATEGORY

22 AMOUNT FOR EACH STATE.— 

23 ‘‘(A) AVERAGE PER CATEGORY.— 

24 ‘‘(i) IN GENERAL.—The Secretary 

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•S 4796 IS

1 graph and paragraph (3), a base per bene2 ficiary, per category amount for each of 

3 the 50 States and the District of Columbia 

4 equal to the average amount, per Medicaid 

5 beneficiary, of Federal payments under 

6 this title, including payments attributable 

7 to disproportionate share hospital pay8 ments under section 1923, for each of the 

9 categories of beneficiaries under subsection 

10 (b)(2) for the base fiscal year for each of 

11 the 50 States and the District of Colum12 bia. 

13 ‘‘(ii) BEST AVAILABLE DATA.—The 

14 determination under clause (i) shall ini15 tially be estimated by the Secretary, based 

16 upon the best available data at the time 

17 the determination is made. 

18 ‘‘(iii) UPDATES.—The determination 

19 under clause (i) shall be updated by the 

20 Secretary on an annual basis based upon 

21 improved data. The Secretary shall adjust 

22 the amounts under subsection (a)(1)(A) to 

23 reflect changes in the amounts so deter24 mined based on such updates. 


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•S 4796 IS

1 ‘‘(B) EXCLUSION OF PASS-THROUGH PAY2 MENTS.—In computing base per beneficiary, 

3 per category amounts under subparagraph 

4 (A)(i) the Secretary shall exclude payments de5 scribed in subsection (a)(4). 

6 ‘‘(C) STANDARDIZATION.— 

7 ‘‘(i) IN GENERAL.—In computing each 

8 such amount, the Secretary shall stand9 ardize the amount in order to remove the 

10 variation attributable to the following: 

11 ‘‘(I) RISK FACTORS.—Such risk 

12 factors as age, health and disability 

13 status (including high cost medical 

14 conditions), gender, institutional sta15 tus, and such other factors as the 

16 Secretary determines to be appro17 priate, so as to ensure actuarial 

18 equivalence. 

19 ‘‘(II) GEOGRAPHIC.—Variations 

20 in costs on a county-by-county basis. 

21 ‘‘(ii) METHOD OF STANDARDIZA22 TION.— 

23 ‘‘(I) CONSULTATION IN DEVEL24 OPMENT OF RISK STANDARDIZA25 TION.—In developing the methodology 


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•S 4796 IS

1 for risk standardization for purposes 

2 of clause (i)(I), the Secretary shall 

3 consult with the Medicaid and CHIP 

4 Payment and Access Commission, the 

5 Medicare Payment Advisory Commis6 sion, and the National Association of 

7 Medicaid Directors. 

8 ‘‘(II) METHOD FOR RISK STAND9 ARDIZATION.—In carrying out clause 

10 (i)(I), the Secretary may apply the 

11 hierarchal condition category method12 ology under section 1853(a)(1)(C). If 

13 the Secretary uses such methodology, 

14 the Secretary shall adjust the applica15 tion of such methodology to take into 

16 account the differences in services 

17 provided under this title compared to 

18 title XVIII, such as the coverage of 

19 long term care, pregnancy, and pedi20 atric services. 

21 ‘‘(III) METHOD FOR GEOGRAPHIC

22 STANDARDIZATION.—The Secretary 

23 shall apply the standardization under 

24 clause (i)(II) in a manner similar to 


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•S 4796 IS

1 that applied under section 

2 1853(c)(4)(A)(iii). 

3 ‘‘(iii) APPLICATION ON A NATIONAL, 

4 BUDGET NEUTRAL BASIS.—The standard5 ization under clause (i) shall be designed 

6 and implemented on a uniform national 

7 basis and shall be budget neutral so as to 

8 not result in any aggregate change in pay9 ments under subsection (a). 

10 ‘‘(iv) RESPONSE TO NEW RISK.—Sub11 ject to clause (iii), the Secretary may ad12 just the standardization under clause (i) to 

13 respond promptly to new instances of com14 municable diseases and other public health 

15 hazards. 

16 ‘‘(v) REFERENCE TO APPLICATION OF

17 RISK ADJUSTMENT.—For rules related to 

18 the application of risk adjustment to 

19 amounts under subsection (a)(1)(A), see 

20 subsection (e). 

21 ‘‘(D) ADJUSTMENT FOR TEMPORARY FMAP

22 INCREASES.—In computing each base per bene23 ficiary, per category amounts under subpara24 graph (A)(i) the Secretary shall disregard por25 tions of payments that are attributable to a 


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•S 4796 IS

1 temporary increase in the Federal matching 

2 rates, including those attributable to the fol3 lowing: 

4 ‘‘(i) PPACA DISASTER FMAP.—Sec5 tion 1905(aa). 

6 ‘‘(ii) ARRA.—Section 5001 of the 

7 American Recovery and Reinvestment Act 

8 of 2009 (42 U.S.C. 1396d note). 

9 ‘‘(iii) EXTRAORDINARY EMPLOYER

10 PENSION CONTRIBUTION.—Section 614 of 

11 the Children’s Health Insurance Program 

12 Reauthorization Act of 2009 (42 U.S.C. 

13 1396d note). 

14 ‘‘(3) ALLOCATION OF NONMEDICAL ASSISTANCE

15 PAYMENTS.—The Secretary shall establish rules for 

16 the allocation of payments under this title (other 

17 than those payments described in paragraph (1) or 

18 (5) of section 1903(a) and including such payments 

19 attributable to section 1923)— 

20 ‘‘(A) among different categories of bene21 ficiaries; and 

22 ‘‘(B) between payments included under 

23 subsection (a)(1) and payments described in 

24 subsection (a)(4). 


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•S 4796 IS

1 ‘‘(4) TRANSITION TO A CORRIDOR AROUND THE

2 NATIONAL AVERAGE.— 

3 ‘‘(A) DETERMINATION OF NATIONAL AVER4 AGE BASE PER BENEFICIARY, PER CATEGORY

5 AMOUNT.—Subject to subparagraph (C), the 

6 Secretary shall determine a national average 

7 base per beneficiary, per category amount equal 

8 to the average of the base per beneficiary, per 

9 category amounts for each of the 50 States and 

10 the District of Columbia determined under 

11 paragraph (2), weighted by the average number 

12 of beneficiaries in each such category and State 

13 as determined by the Secretary consistent with 

14 subsection (d) for the base fiscal year. 

15 ‘‘(B) TRANSITION ADJUSTMENT.— 

16 ‘‘(i) HIGH PER BENEFICIARY

17 STATES.—In the case of a high per bene18 ficiary State (as defined in clause (iii)(I)) 

19 for a category, the beneficiary-based quar20 terly amount for such State and category 

21 for a quarter in a reform year (beginning 

22 with the fourth reform year and ending 

23 with the tenth reform year) is equal to the 

24 sum of— 


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1 ‘‘(I) the product of the State-spe2 cific factor for such reform year (as 

3 defined in clause (iv)) and the bene4 ficiary-based quarterly amount that 

5 would otherwise be determined under 

6 paragraph (1) for such State and cat7 egory if the State were a State de8 scribed in clause (ii) of paragraph 

9 (1)(C), instead of a State described in 

10 clause (i) of such paragraph; and 

11 ‘‘(II) the product of 1 minus the 

12 State-specific factor for such reform 

13 year and the beneficiary-based quar14 terly amount that would otherwise be 

15 determined under paragraph (1) for a 

16 State and category if the base per 

17 beneficiary, per category amount de18 termined under paragraph (2) for the 

19 State and category were equal to 110 

20 percent of the national average base 

21 per beneficiary, per category amount 

22 determined under subparagraph (A) 

23 for such category. 

24 ‘‘(ii) LOW PER BENEFICIARY

25 STATES.—In the case of a low per beneVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00469 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 ficiary State (as defined in clause (iii)(II)) 

2 for a category, the beneficiary-based quar3 terly amount for such State and category 

4 for a quarter in a reform year (beginning 

5 with the fourth reform year and ending 

6 with the tenth reform year) is equal to the 

7 sum of— 

8 ‘‘(I) the product of the State-spe9 cific factor for such reform year and 

10 the beneficiary-based quarterly 

11 amount that would otherwise be deter12 mined under paragraph (1) for such 

13 State and category if the State were 

14 a State described in clause (ii) of 

15 paragraph (1)(C), instead of a State 

16 described in clause (i) of such para17 graph; and 

18 ‘‘(II) the product of 1 minus the 

19 State-specific factor for such reform 

20 year and the beneficiary-based quar21 terly amount that would otherwise be 

22 determined under paragraph (1) for a 

23 State and category if the base per 

24 beneficiary, per category amount de25 termined under paragraph (2) for the 


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1 State and category were equal to 90 

2 percent of the national average base 

3 per beneficiary, per category amount 

4 determined under subparagraph (A) 

5 for such category. 

6 ‘‘(iii) HIGH AND LOW PER BENE7 FICIARY STATES DEFINED.—In this sub8 paragraph: 

9 ‘‘(I) HIGH PER BENEFICIARY

10 STATE.—The term ‘high per bene11 ficiary State’ means, with respect to a 

12 category, a State for which the base 

13 per beneficiary, per category amount 

14 determined under paragraph (2) for 

15 such category is greater than 110 per16 cent of the national average base per 

17 beneficiary, per category amount de18 termined under subparagraph (A) for 

19 such category. 

20 ‘‘(II) LOW PER BENEFICIARY

21 STATE.—The term ‘low per bene22 ficiary State’ means, with respect to a 

23 category, a State for which the base 

24 per beneficiary, per category amount 

25 determined under paragraph (2) for 


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1 such category is less than 90 percent 

2 of the national average base per bene3 ficiary, per category amount deter4 mined under subparagraph (A) for 

5 such category. 

6 ‘‘(iv) STATE-SPECIFIC FACTOR.—In 

7 this subparagraph, the term ‘State-specific 

8 factor’ means— 

9 ‘‘(I) for the fourth reform year, 

7 10 ⁄8; and 

11 ‘‘(II) for a subsequent reform 

12 year, the State-specific factor under 

13 this clause for the previous reform 

year minus 1 14 ⁄8.

15 ‘‘(C) NO ADDITIONAL EXPENDITURES.— 

16 ‘‘(i) DETERMINATION OF INCREASE IN

17 FEDERAL EXPENDITURES.—For each cat18 egory for each reform year (beginning with 

19 the fourth reform year and ending with the 

20 tenth reform year), the Secretary shall de21 termine whether the application of this 

22 paragraph— 

23 ‘‘(I) to the category for the re24 form year will result in an aggregate 


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1 increase in the aggregate Federal ex2 penditures under subsection (a); and 

3 ‘‘(II) to all the categories for the 

4 reform year will result in a net aggre5 gate increase in the aggregate Federal 

6 expenditures under subsection (a). 

7 ‘‘(ii) ADJUSTMENT.—If the Secretary 

8 determines under clause (i)(II) that the 

9 application of this paragraph to all the cat10 egories for a reform year will result in a 

11 net aggregate increase in the aggregate 

12 Federal expenditures under subsection (a), 

13 the Secretary shall reduce the national av14 erage base per beneficiary, per category 

15 amount computed under subparagraph (A) 

16 for each of the categories determined 

17 under clause (i)(I) for which there will be 

18 an aggregate increase in the aggregate 

19 Federal expenditures under subsection (a) 

20 by such uniform percentage as will ensure 

21 that there is no net aggregate Federal ex22 penditure increase described in clause 

23 (i)(II) for the reform year. 

24 ‘‘(5) REPORTS ON PER BENEFICIARY RATES; 

25 APPEALS.— 


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1 ‘‘(A) REPORT TO STATES.—Not later than 

2 8 months after the date of the enactment of 

3 this section, the Secretary shall submit to each 

4 State the Secretary’s initial determination of— 

5 ‘‘(i) the base per beneficiary, per cat6 egory amounts under paragraph (2) for 

7 such State; and 

8 ‘‘(ii) the national average base per 

9 beneficiary, per category amounts under 

10 paragraph (4)(A). 

11 ‘‘(B) OPPORTUNITY TO APPEAL.—Not 

12 later than 3 months after the date a State re13 ceives notice of the Secretary’s initial deter14 mination of such base per beneficiary, per cat15 egory amounts for such State under subpara16 graph (A)(i), the State may file with the Sec17 retary, in a form and manner specified by the 

18 Secretary, an appeal of such determination. 

19 ‘‘(C) DETERMINATION ON APPEAL.—Not 

20 later than 3 months after receiving such an ap21 peal, the Secretary shall make a final deter22 mination on such amounts for such State. If no 

23 such appeal is received for a State, the Sec24 retary’s initial determination under subpara25 graph (A)(i) shall become final. 


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1 ‘‘(6) BASE FISCAL YEAR DEFINED.—In this 

2 section, the term ‘base fiscal year’ means the latest 

3 fiscal year, ending before the date of the enactment 

4 of this section, for which the Secretary determines 

5 that adequate data are available to make the com6 putations required under this subsection. 

7 ‘‘(d) NOT COUNTING INDIVIDUALS TO ACCOUNT FOR

8 EXCLUDED PAYMENTS.—Under rules specified by the 

9 Secretary, individuals shall not be counted as Medicaid 

10 beneficiaries for purposes of subsection (b)(1)(B) and sub11 section (c)(2)(A) to the extent that such individuals— 

12 ‘‘(1) are receiving medical assistance for which 

13 payments described under subsection (a)(4)(A) are 

14 made; or 

15 ‘‘(2) would not have been eligible to enroll 

16 under the State plan (or waiver of such plan) in the 

17 State in which such individual is so enrolled if the 

18 rules for eligibility for enrollment under such plan 

19 (or waiver) were the same as such rules for eligi20 bility in effect as of January 1, 2009. 

21 ‘‘(e) RISK ADJUSTMENT.— 

22 ‘‘(1) IN GENERAL.—The amount under sub23 section (a)(1)(A) shall be adjusted under this sub24 section in an appropriate manner, specified by the 


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1 Secretary and consistent with paragraph (2), to take 

2 into account— 

3 ‘‘(A) the factors described in subsection 

4 (c)(2)(C)(i)(I) within a category of bene5 ficiaries; and 

6 ‘‘(B) variations in costs on a county-by7 county basis for medical assistance and admin8 istrative expenses. 

9 ‘‘(2) METHOD OF ADJUSTMENT.— 

10 ‘‘(A) IN GENERAL.—The adjustments 

11 under paragraph (1) shall be made in a manner 

12 similar to the manner in which similar adjust13 ments are made under subsection (c)(2)(C) and 

14 consistent with the requirements of clause (iii) 

15 of such subsection and subparagraph (B). 

16 ‘‘(B) BIANNUAL UPDATE OF RISK ADJUST17 MENT METHODOLOGY.—In applying clause 

18 (i)(I) of subsection (c)(2)(C) for purposes of 

19 subparagraph (A), the Secretary shall, in con20 sultation with the entities described in clause 

21 (ii)(I) of such subsection, update the risk ad22 justment methodology applied as appropriate 

23 not less often than every 2 years. 

24 ‘‘(f) CHRONIC CARE QUALITY BONUS PAYMENTS.— 


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1 ‘‘(1) DETERMINATION OF BONUS PAYMENTS.— 

2 If the Secretary determines that, based on the re3 ports under paragraph (5), with respect to cat4 egories of chronic disease for which chronic care per5 formance targets had been established under para6 graph (3) for each category of Medicaid beneficiaries 

7 specified under subsection (b)(2) such targets have 

8 been met by a State for a reform year, the Secretary 

9 shall make an additional payment to such State in 

10 the amount specified in paragraph (6) for each quar11 ter in the succeeding reform year. Such payments 

12 shall be made in a manner specified by the Secretary 

13 and may only be used consistent with subsection 

14 (a)(3). 

15 ‘‘(2) IDENTIFICATION OF CATEGORIES OF

16 CHRONIC DISEASE.—The Secretary shall determine 

17 the categories of chronic disease for which bonus 

18 payments may be available under this subsection for 

19 each category of Medicaid beneficiaries. 

20 ‘‘(3) ADOPTION OF QUALITY MEASUREMENT

21 SYSTEM AND IDENTIFICATION OF PERFORMANCE

22 TARGETS.— 

23 ‘‘(A) SYSTEM AND DATA.—With respect to 

24 the categories of chronic disease under para25 graph (2), the Secretary shall adopt a quality 


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1 measurement system that uses data described 

2 in paragraph (4) and is similar to the Five-Star 

3 Quality Rating System used to indicate the per4 formance of Medicare Advantage plans under 

5 part C of title XVIII. 

6 ‘‘(B) TARGETS.—Using such system and 

7 data, the Secretary shall establish for each re8 form year the chronic care performance targets 

9 for purposes of the payments under paragraph 

10 (1). Such performance targets shall be estab11 lished in consultation with States, associations 

12 representing individuals with chronic illnesses, 

13 entities providing treatment to such individuals 

14 for such chronic illnesses, and other stake15 holders, including the National Association of 

16 Medicaid Directors and the National Governors 

17 Association. 

18 ‘‘(4) DATA TO BE USED.—The data to be used 

19 under paragraph (3) shall include— 

20 ‘‘(A) data collected through methods such 

21 as— 

22 ‘‘(i) the ‘Healthcare Effectiveness 

23 Data and Information Set’ (also known as 

24 ‘HEDIS’) (or an appropriate successor 

25 performance measurement tool); 


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1 ‘‘(ii) the ‘Consumer Assessment of 

2 Healthcare Providers and Systems’ (also 

3 known as ‘CAHPS’) (or an appropriate 

4 successor performance measurement tool); 

5 and 

6 ‘‘(iii) the ‘Health Outcomes Survey’ 

7 (also known as ‘HOS’) (or an appropriate 

8 successor performance measurement tool); 

9 and 

10 ‘‘(B) other data collected by the State. 

11 ‘‘(5) REPORTS.— 

12 ‘‘(A) IN GENERAL.—Each State shall col13 lect, analyze, and report to the Secretary, at a 

14 frequency and in a manner to be established by 

15 the Secretary, data described in paragraph (4) 

16 that permit the Secretary to monitor the State’s 

17 performance relative to the chronic care per18 formance targets established under paragraph 

19 (3). 

20 ‘‘(B) REVIEW AND VERIFICATION.—The 

21 Secretary may review the data collected by the 

22 State under subparagraph (A) to verify the 

23 State’s analysis of such data with respect to the 

24 performance targets under paragraph (3). 

25 ‘‘(6) AMOUNT OF BONUS PAYMENTS.— 


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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graphs (B) and (C), with respect to each cat3 egory of Medicaid beneficiaries, in the case of 

4 a State that the Secretary determines, based on 

5 the chronic care performance targets set under 

6 paragraph (3) for a reform year for such cat7 egory, performs— 

8 ‘‘(i) in the top five States in such cat9 egory, subject to subparagraph (C)(ii), the 

10 amount of the bonus for each quarter in 

11 the succeeding reform year shall be 10 per12 cent of the payment amount otherwise paid 

13 to the State under subsection (a) for indi14 viduals enrolled under the plan within such 

15 category; 

16 ‘‘(ii) in the next five States in such 

17 category, subject to subparagraph (C)(ii), 

18 the amount of the bonus for each such 

19 quarter shall be 5 percent of the payment 

20 amount otherwise paid to the State under 

21 subsection (a) for individuals enrolled 

22 under the plan within such category; 

23 ‘‘(iii) in the next five States in such 

24 category, subject to clauses (i) and (iii) of 

25 subparagraph (C), the amount of the 


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1 bonus for each such quarter shall be 3 per2 cent of the payment amount otherwise paid 

3 to the State under subsection (a) for indi4 viduals enrolled under the plan within such 

5 category; 

6 ‘‘(iv) in the next five States in such 

7 category, subject to clauses (i) and (iii) of 

8 subparagraph (C), the amount of the 

9 bonus for each such quarter shall be 2 per10 cent of the payment amount otherwise paid 

11 to the State under subsection (a) for indi12 viduals enrolled under the plan within such 

13 category; and 

14 ‘‘(v) in the next five States in such 

15 category, subject to clauses (i) and (iii) of 

16 subparagraph (C), the amount of the 

17 bonus for each such quarter shall be 1 per18 cent of the payment amount otherwise paid 

19 to the State under subsection (a) for indi20 viduals enrolled under the plan within such 

21 category. 

22 ‘‘(B) AGGREGATE ANNUAL LIMIT FOR

23 EACH CATEGORY OF MEDICAID BENE24 FICIARIES.— 


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1 ‘‘(i) IN GENERAL.—In no case may 

2 the aggregate amount of bonuses under 

3 this subsection for quarters in a reform 

4 year for a category of Medicaid bene5 ficiaries exceed the limit specified in clause 

6 (ii) for the reform year. 

7 ‘‘(ii) LIMIT.—The limit specified in 

8 this clause— 

9 ‘‘(I) for the second reform year is 

10 equal to $250,000,000; or 

11 ‘‘(II) for a subsequent reform 

12 year is equal to the limit specified in 

13 this clause for the previous reform 

14 year increased by the per beneficiary 

15 percentage increase determined under 

16 paragraph (1)(E) of subsection (c). 

17 ‘‘(C) LIMITATION AND PRORATION OF BO18 NUSES BASED ON APPLICATION OF AGGREGATE

19 LIMIT.— 

20 ‘‘(i) NO BONUS FOR THIRD OR SUBSE21 QUENT TIERS UNLESS AGGREGATE LIMIT

22 NOT REACHED ON FIRST TWO TIERS.—No 

23 bonus shall be payable under clause (iii), 

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1 ter in a reform year unless the aggregate 

2 amount of bonuses under clauses (i) and 

3 (ii) of such subparagraph for such category 

4 and reform year is less than the limit spec5 ified in subparagraph (B)(ii) for the re6 form year. 

7 ‘‘(ii) PRORATION FOR FIRST TWO

8 TIERS.—If the aggregate amount of bo9 nuses under clauses (i) and (ii) of subpara10 graph (A) for a category of Medicaid bene11 ficiaries for quarters in a reform year ex12 ceeds the limit specified in subparagraph 

13 (B)(ii) for the reform year, the amount of 

14 each such bonus shall be prorated in a 

15 manner so the aggregate amount of such 

16 bonuses is equal to such limit. 

17 ‘‘(iii) PRORATION FOR NEXT THREE

18 TIERS.—If the aggregate amount of bo19 nuses under clauses (i) and (ii) of subpara20 graph (A) for a category of Medicaid bene21 ficiaries for quarters in a reform year is 

22 less than the limit specified in subpara23 graph (B)(ii) for the reform year, but the 

24 aggregate amount of bonuses under clauses 

25 (i) through (v) of subparagraph (A) for the 


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1 category and such quarters in the reform 

2 year exceeds the limit specified in subpara3 graph (B)(ii) for the reform year, the 

4 amount of each bonus in clauses (iii), (iv), 

5 and (v) of subparagraph (A) shall be pro6 rated in a manner so the aggregate 

7 amount of all the bonuses under subpara8 graph (A) is equal to such limit. 

9 ‘‘(g) STATE OPTION FOR RECEIVING MEDICARE PAY10 MENTS FOR FULL-BENEFIT DUAL ELIGIBLE INDIVID11 UALS.— 

12 ‘‘(1) IN GENERAL.—Under this subsection a 

13 State may elect for quarters beginning on or after 

14 the implementation date in a reform year to receive 

15 payment from the Secretary under paragraph (3). 

16 As a condition of receiving such payment, the State 

17 shall agree to provide to full-benefit dual eligible in18 dividuals eligible for medical assistance under the 

19 State plan— 

20 ‘‘(A) the medical assistance to which such 

21 eligible individuals would otherwise be entitled 

22 under this title; and 

23 ‘‘(B) any items and services which such eli24 gible individuals would otherwise receive under 

25 title XVIII. 


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1 ‘‘(2) PROVIDER PAYMENT REQUIREMENT.— 

2 ‘‘(A) IN GENERAL.—A State electing the 

3 option under this subsection shall provide pay4 ment to health care providers for the items and 

5 services described under paragraph (1)(B) at a 

6 rate that is not less than the rate at which pay7 ments would be made to such providers for such 

8 items and services under title XVIII. 

9 ‘‘(B) FLEXIBILITY IN PAYMENT METH10 ODS.—Nothing in subparagraph (A) shall be 

11 construed as preventing a State from using al12 ternative payment methodologies (such as bun13 dled payments or the use of accountable care 

14 organizations (as such term is used in section 

15 1899)) for purposes of making payments to 

16 health care providers for items and services pro17 vided to dual eligible individuals in the State 

18 under the option under this subsection. 

19 ‘‘(3) PAYMENTS TO STATES IN LIEU OF MEDI20 CARE PAYMENTS.—With respect to a full-benefit 

21 dual eligible individual, in the case of a State that 

22 elects the option under paragraph (1) for quarters in 

23 a reform year— 

24 ‘‘(A) the Secretary shall not make any pay25 ment under title XVIII for items and services 


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1 furnished to such individual for such quarters; 

2 and 

3 ‘‘(B) the Secretary shall pay to the State, 

4 in addition to the amounts paid to such State 

5 under subsection (a), the amount that the Sec6 retary would, but for this subsection, otherwise 

7 pay under title XVIII for items and services 

8 furnished to such an individual in such State 

9 for such quarters. 

10 ‘‘(4) FULL-BENEFIT DUAL ELIGIBLE INDI11 VIDUAL DEFINED.—In this subsection, the term 

12 ‘full-benefit dual eligible individual’ means an indi13 vidual who meets the requirements of section 

14 1935(c)(6)(A)(ii). 

15 ‘‘(h) AUDITS.—The Secretary shall conduct such au16 dits on the number and classification of Medicaid bene17 ficiaries under such subsections and expenditures under 

18 this section as may be necessary to ensure appropriate 

19 payments under this section. 

20 ‘‘(i) TREATMENT OF WAIVERS.— 

21 ‘‘(1) NO IMPACT ON CURRENT WAIVERS.—In 

22 the case of a waiver of requirements of this title pur23 suant to section 1115 or other law that is in effect 

24 as of the date of the enactment of this section, noth25 ing in this section shall be construed to affect such 


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1 waiver for the period of the waiver as approved as 

2 of such date. 

3 ‘‘(2) APPLICATION OF BUDGET NEUTRALITY TO

4 SUBSEQUENT WAIVERS AND RENEWALS TAKING SEC5 TION INTO ACCOUNT.—In the case of a waiver of re6 quirements of this title pursuant to section 1115 or 

7 other law that is approved or renewed after the date 

8 of the enactment of this section, to the extent that 

9 such approval or renewal is conditioned upon a dem10 onstration of budget neutrality, budget neutrality 

11 shall be determined taking into account the applica12 tion of this section. 

13 ‘‘(j) REPORT TO CONGRESS.—Not later than Janu14 ary 1 of the second reform year, the Secretary shall submit 

15 to Congress a report on the implementation of this section. 

16 ‘‘(k) DEFINITIONS.—In this section: 

17 ‘‘(1) IMPLEMENTATION DATE.—The term ‘im18 plementation date’ means— 

19 ‘‘(A) July 1, 2021, if this section is en20 acted on or before July 1, 2020; or 

21 ‘‘(B) July 1, 2022, if this section is en22 acted after July 1, 2020. 

23 ‘‘(2) REFORM YEARS.— 

24 ‘‘(A) The term ‘reform year’ means a fiscal 

25 year beginning with the first reform year. 


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1 ‘‘(B) The term ‘first reform year’ means 

2 the fiscal year in which the implementation date 

3 occurs. 

4 ‘‘(C) The terms ‘second’, ‘third’, and suc5 cessive similar terms mean, with respect to a 

6 reform year, the second, third, or successive re7 form year, respectively, succeeding the first re8 form year.’’. 

9 (b) CONFORMING AMENDMENTS.— 

10 (1) CONTINUED APPLICATION OF CLAWBACK

11 PROVISIONS.— 

12 (A) CONTINUED APPLICATION.—Sub13 sections (a) and (c)(1)(C) of section 1935 of 

14 such Act (42 U.S.C. 1396u–5) are each amend15 ed by inserting ‘‘or 1903A(a)’’ after ‘‘1903(a)’’. 

16 (B) TECHNICAL AMENDMENT.—Section 

17 1935(d)(1) of the Social Security Act (42 

18 U.S.C. 1396u–5(d)(1)) is amended by inserting 

19 ‘‘except as provided in section 1903A(g)’’ after 

20 ‘‘any other provision of this title’’. 

21 (2) PAYMENT RULES UNDER SECTION 1903.— 

22 (A) Section 1903(a) of the Social Security 

23 Act (42 U.S.C. 1396b(a)) is amended, in the 

24 matter before paragraph (1), by inserting ‘‘and 


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1 section 1903A’’ after ‘‘except as otherwise pro2 vided in this section’’. 

3 (B) Section 1903(d) of such Act (42 

4 U.S.C. 1396b(d)) is amended— 

5 (i) in paragraph (1), by inserting 

6 ‘‘and under section 1903A’’ after ‘‘sub7 sections (a) and (b)’’; 

8 (ii) in paragraph (2)— 

9 (I) in subparagraph (A), by in10 serting ‘‘or section 1903A’’ after ‘‘was 

11 made under this section’’; and 

12 (II) in subparagraph (B), by in13 serting ‘‘or section 1903A’’ after 

14 ‘‘under subsection (a)’’; 

15 (iii) in paragraph (4)— 

16 (I) by striking ‘‘under this sub17 section’’ and inserting ‘‘, with respect 

18 to this section or section 1903A, 

19 under this subsection’’; and 

20 (II) by striking ‘‘under this sec21 tion’’ and inserting ‘‘under the respec22 tive section’’; and 

23 (iv) in paragraph (5), by inserting ‘‘or 

24 section 1903A’’ after ‘‘overpayment under 

25 this section’’. 


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1 (3) CONFORMING WAIVER AUTHORITY.—Section 

2 1115(a)(2)(A) of the Social Security Act (42 U.S.C. 

3 1315(a)(2)(A)) is amended by striking ‘‘or 1903’’ 

4 and inserting ‘‘1903, or 1903A’’. 

5 (4) REPORT ON ADDITIONAL CONFORMING

6 AMENDMENTS NEEDED.—Not later than 6 months 

7 after the date of the enactment of this Act, the Sec8 retary of Health and Human Services shall submit 

9 to Congress a report that includes a description of 

10 any additional technical and conforming amend11 ments to law that are required to properly carry out 

12 this Act. 

13 SEC. 402. INCOME LIMITATIONS FOR REFUNDABLE CRED14 ITS FOR COVERAGE UNDER A QUALIFIED 

15 HEALTH PLAN. 

16 (a) IN GENERAL.—Subparagraphs (A) and (B) of 

17 section 36B(c)(1) of the Internal Revenue Code of 1986 

18 are amended by inserting after ‘‘100 percent’’ each place 

19 such term appears the following: ‘‘(or, in the case of a 

20 taxpayer enrolled through an Exchange utilized by such 

21 State that makes the election described in section 1903A 

22 of the Social Security Act, the percentage established by 

23 such State under part A of title IV of such Act for pur24 poses of eligibility under title XIX of such Act as of Janu25 ary 1, 2009)’’. 


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

2 this section shall apply with respect to taxable years begin3 ning after the date of the enactment of this Act. 

4 SEC. 403. MEDICAID ELIGIBILITY DETERMINATIONS. 

5 (a) STATE FLEXIBILITY TO USE CONTRACTORS TO

6 MAKE ELIGIBILITY DETERMINATIONS ON BEHALF OF

7 STATE.—Section 1902(a)(5) of the Social Security Act 

8 (42 U.S.C. 1396a(a)(5)) is amended by inserting before 

9 the semicolon at the end the following: ‘‘, but such deter10 minations of eligibility may be made, at the option of a 

11 State, under a contract with another State or local agency 

12 or a contractor so long as the contract does not provide 

13 incentives for the agency or contractor to delay eligibility 

14 determinations or to deny eligibility for individuals other15 wise eligible for medical assistance’’. 

16 (b) FREQUENCY OF ELIGIBILITY REDETERMINA17 TIONS.—Section 1902(e)(14) of the Social Security Act 

18 (42 U.S.C. 1396a(e)(14)) is amended by adding at the 

19 end the following: 

20 ‘‘(L) FREQUENCY OF ELIGIBILITY REDE21 TERMINATIONS.—Beginning on October 1, 

22 2019, and notwithstanding subparagraph (H), 

23 in the case of an individual whose eligibility for 

24 medical assistance under the State plan under 

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1 mined based on the application of modified ad2 justed gross income under subparagraph (A) 

3 and who is so eligible on the basis of clause 

4 (i)(VIII), (ii)(XX), or (ii)(XXIII) of subsection 

5 (a)(10)(A), at the option of the State, the State 

6 plan may provide that the individual’s eligibility 

7 shall be redetermined every 6 months (or such 

8 shorter number of months as the State may 

9 elect).’’. 

10 SEC. 404. LOWERING SAFE HARBOR THRESHOLD WITH RE11 SPECT TO STATE TAXES ON HEALTH CARE 

12 PROVIDERS. 

13 Section 1903(w)(4)(C)(ii) of the Social Security Act 

14 (42 U.S.C. 1396b(w)(4)(C)(ii)) is amended— 

15 (1) by striking ‘‘of fiscal years beginning’’ and 

16 inserting ‘‘of fiscal years— 

17 ‘‘(I) beginning’’; and 

18 (2) by striking ‘‘it appears.’’ and inserting the 

19 following: ‘‘it appears; 

20 ‘‘(II) beginning on or after January 1, 

21 2021, and before January 1, 2030, ‘4 percent’ 

22 shall be substituted for ‘6 percent’ each place it 

23 appears; 

24 ‘‘(III) beginning on or after January 1, 

25 2030, and before January 1, 2035, ‘3 percent’ 


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1 shall be substituted for ‘6 percent’ each place it 

2 appears; 

3 ‘‘(IV) beginning on or after January 1, 

4 2035, and before January 1, 2040, ‘2 percent’ 

5 shall be substituted for ‘6 percent’ each place it 

6 appears; 

7 ‘‘(V) beginning on or after January 1, 

8 2040, and before January 1, 2045, ‘1 percent’ 

9 shall be substituted for ‘6 percent’ each place it 

10 appears; and 

11 ‘‘(VI) beginning on or after January 1, 

12 2045, ‘0 percent’ shall be substituted for ‘6 per13 cent’ each place it appears.’’. 

14 SEC. 405. PROVIDING FOR STATE APPROVAL AND IMPLE15 MENTATION OF SPECIFIED WAIVERS UNDER 

16 THE MEDICAID PROGRAM. 

17 Section 1115 of the Social Security Act (42 U.S.C. 

18 1315) is amended— 

19 (1) in subsection (d)— 

20 (A) in paragraph (1), by striking ‘‘An ap21 plication’’ and inserting ‘‘Subject to paragraph 

22 (4), an application’’; and 

23 (B) by adding at the end the following new 

24 paragraph: 


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1 ‘‘(4)(A) An experimental, pilot, or demonstra2 tion project undertaken under subsection (a) may be 

3 approved or renewed by a State if such project is de4 scribed in subparagraph (B). 

5 ‘‘(B) An experimental, pilot, or demonstration 

6 project is described in this subparagraph if such 

7 project provides for a waiver of requirements with 

8 respect to a State plan (or a waiver of such plan) 

9 under title XIX such that— 

10 ‘‘(i) individuals enrolled under such plan 

11 (or such waiver) may elect to participate in 

12 such project with respect to a year; and 

13 ‘‘(ii) such individuals who elect to so par14 ticipate are furnished with primary care serv15 ices (as described in section 223(c)(1)(D)(ii)(I) 

16 of the Internal Revenue Code of 1986) through 

17 a direct primary care service arrangement (as 

18 defined in such section). 

19 ‘‘(C) For purposes of a State’s approval or re20 newal of an experimental, pilot, or demonstration 

21 project under subparagraph (A), each reference to 

22 ‘the Secretary’ in subsection (a) shall be deemed to 

23 be a reference to ‘the State’.’’; and 


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1 (2) in subsection (e), by inserting ‘‘(other than 

2 such a project that is described in paragraph 

3 (4)(B))’’ before the period at the end. 

4 SEC. 406. DEDUCTION FOR QUALIFIED CHARITY CARE. 

5 (a) IN GENERAL.—Part VI of subchapter B of chap6 ter 1 of the Internal Revenue Code of 1986 is amended 

7 by adding at the end the following new section: 

8 ‘‘SEC. 199B. QUALIFIED CHARITY CARE. 

9 ‘‘(a) IN GENERAL.—There shall be allowed as a de10 duction for the taxable year an amount equal to— 

11 ‘‘(1) in the case of a direct primary care physi12 cian, an amount equal to the sum of— 

13 ‘‘(A) the fee (as published on a publicly 

14 available website of such physician) for physi15 cians’ services that are qualified charity care 

16 furnished by such taxpayer during such year, 

17 and 

18 ‘‘(B) for each visit by a patient to such 

19 physician during which qualified charity care is 

20 furnished, half of so much of the lowest sub21 scription fee of such physician that is attrib22 utable to a month, and 

23 ‘‘(2) in the case of any other individual, the un24 reimbursed Medicare-based value of qualified charity 

25 care furnished by such taxpayer during such year. 


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

2 ‘‘(1) UNREIMBURSED MEDICARE-BASED

3 VALUE.—The term ‘unreimbursed Medicare-based 

4 value’ means, with respect to physicians’ services, 

5 the amount payable for such services under the phy6 sician fee schedule established under section 1848 of 

7 the Social Security Act. 

8 ‘‘(2) QUALIFIED CHARITY CARE.—The term 

9 ‘qualified charity care’ means physicians’ services 

10 that are furnished— 

11 ‘‘(A) without expectation of reimburse12 ment, and 

13 ‘‘(B) to an individual enrolled— 

14 ‘‘(i) under a State plan under title 

15 XIX of the Social Security Act (or a waiv16 er of such plan), or 

17 ‘‘(ii) under a State child health plan 

18 under title XXI of the Social Security Act 

19 (or a waiver of such plan). 

20 ‘‘(3) DIRECT PRIMARY CARE PHYSICIAN.—The 

21 term ‘direct primary care physician’ means a physi22 cian (as defined in section 1861(r) of the Social Se23 curity Act) who provides primary care— 

24 ‘‘(A) to individuals who have paid a peri25 odic subscription fee, and 


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1 ‘‘(B) in exchange for a fee that is pub2 lished on a publicly available website of such 

3 physician. 

4 ‘‘(4) PHYSICIANS’ SERVICES.—The term ‘physi5 cians’ services’ has the meaning given such term by 

6 section 1861(q) of the Social Security Act. 

7 ‘‘(c) LIMITATION.—The amount allowed as a deduc8 tion under subsection (a) for a taxable year shall not ex9 ceed the gross receipts attributable to physicians’ services 

10 furnished by the taxpayer during the taxable year.’’. 

11 (b) CLERICAL AMENDMENT.—The table of sections 

12 for part VI of subchapter B of chapter 1 of the Internal 

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

14 the following new item: 

‘‘Sec. 199B. Qualified charity care.’’. 

15 Subtitle B—Medicare Reforms 

16 SEC. 411. OFF-CAMPUS PROVIDER-BASED DEPARTMENT 

17 MEDICARE SITE NEUTRAL PAYMENT. 

18 (a) IN GENERAL.—Section 1834 of the Social Secu19 rity Act (42 U.S.C. 1395m) is amended by adding at the 

20 end the following new subsection: 

21 ‘‘(x) OFF-CAMPUS PROVIDER-BASED DEPARTMENT

22 MEDICARE SITE NEUTRAL PAYMENT.— 

23 ‘‘(1) IN GENERAL.—With respect to items and 

24 services furnished in an off-campus provider-based 

25 department, payment under this section for such 


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1 items and services shall be the amount determined 

2 under the fee schedule under section 1848 for such 

3 items and services furnished if furnished in a physi4 cian office setting. 

5 ‘‘(2) OFF-CAMPUS PROVIDER-BASED DEPART6 MENT.—For purposes of this subsection, the term 

7 ‘off-campus provider-based department’ has such 

8 meaning as specified by the Secretary.’’. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 subsection (a) shall apply with respect to items and serv11 ices furnished on or after January 1, 2021. 

12 SEC. 412. ELIMINATING FEHBP ELIGIBILITY FOR ANNU13 ITANTS. 

14 Section 8905(b) of title 5, United States Code, is 

15 amended— 

16 (1) in the matter preceding paragraph (1), by 

17 striking ‘‘An’’ and inserting ‘‘Consistent with the 

18 last sentence of this subsection, an’’; and 

19 (2) by adding at the end the following: ‘‘. An 

20 individual who is entitled to benefits under part A 

21 of title XVIII of the Social Security Act (42 U.S.C. 

22 1395c et seq.) by reason of section 226 or 226A of 

23 such Act (42 U.S.C. 426, 426–1), or otherwise eligi24 ble to enroll under such part pursuant to section 

25 1818 or 1818A of such Act (42 U.S.C. 1395i–2, 


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1 1395i–2a), and who first becomes an annuitant after 

2 the date of enactment of this sentence may not con3 tinue enrollment in any health benefits plan under 

4 this chapter.’’. 

5 SEC. 413. ELIMINATION OF MEDICARE ELIGIBILITY FOR 

6 CERTAIN INDIVIDUALS. 

7 (a) ENROLLMENT PROHIBITION.— 

8 (1) PART B.—Section 1836 of the Social Secu9 rity Act (42 U.S.C. 1395o) is amended by striking 

10 the period at the end and inserting ‘‘, except that an 

11 individual who attains age 65 on or after January 

12 1, 2030, and is an individual who, upon attaining 

13 such age, has earned $10,000,000 or more in life14 time wages, shall not be eligible to so enroll.’’. 

15 (2) PART D.—Section 1860D–1(a)(3)(A) of 

16 such Act (42 U.S.C. 1395w–101(a)(3)(A)) is amend17 ed by striking the period at the end and inserting 

18 ‘‘, excluding an individual who, upon attaining age 

19 65, has earned $10,000,000 or more in lifetime 

20 wages.’’. 

21 (b) MEDIGAP.—Section 1882 of the Social Security 

22 Act (42 U.S.C. 1395ss) is amended by adding at the end 

23 the following new subsection: 

24 ‘‘(aa) ADDITIONAL LIMITATION ON NEWLY ELIGI25 BLE BENEFICIARIES.— 


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1 ‘‘(1) IN GENERAL.—Notwithstanding any other 

2 provision of this section, on or after January 1, 

3 2030, a medicare supplemental policy may not be 

4 sold or issued to a targeted newly eligible Medicare 

5 beneficiary. 

6 ‘‘(2) TARGETED NEWLY ELIGIBLE MEDICARE

7 BENEFICIARY.—For purposes of this subsection, the 

8 term ‘targeted newly eligible Medicare beneficiary’ 

9 means an individual who, upon attaining the age of 

10 65, has earned $10,000,000 or more in lifetime 

11 wages.’’. 

12 SEC. 414. MEDICARE PART D TAX DEDUCTION. 

13 (a) IN GENERAL.—Section 139A of the Internal Rev14 enue Code of 1986 is amended by adding at the end the 

15 following: ‘‘This section shall not be taken into account 

16 for purposes of determining whether any deduction is al17 lowable with respect to any cost taken into account in de18 termining such payment.’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall apply to taxable years beginning after 

21 December 31, 2018. 

22 SEC. 415. REPEAL OF NET INVESTMENT INCOME TAX. 

23 (a) IN GENERAL.—Subtitle A of the Internal Rev24 enue Code of 1986 is amended by striking chapter 2A. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2019. 

4 SEC. 416. MEDICARE COVERAGE OF BAD DEBT. 

5 Section 1861(v)(1) of the Social Security Act (42 

6 U.S.C. 1395(v)(1)) is amended— 

7 (1) in subparagraph (T)— 

8 (A) in clause (iv), by striking ‘‘and’’ at the 

9 end; 

10 (B) in clause (v)— 

11 (i) by striking ‘‘during fiscal year’’ 

12 and inserting ‘‘during fiscal years’’; 

13 (ii) by striking ‘‘or a subsequent fiscal 

14 year’’ and inserting ‘‘through 2021’’; and 

15 (iii) by striking the period at the end 

16 and inserting ‘‘, and’’; and 

17 (C) by adding at the end the following new 

18 clause: 

19 ‘‘(vi) for cost reporting periods beginning dur20 ing fiscal year 2021 or a subsequent fiscal year, by 

21 the percent applicable for cost reporting periods be22 ginning during the previous fiscal year, increased 

23 (through fiscal year 2024) by 10 percentage 

24 points.’’; 

25 (2) in subparagraph (V)— 


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1 (A) in clause (i)— 

2 (i) in subclause (III), by striking 

3 ‘‘and’’ at the end; 

4 (ii) in subclause (IV)— 

5 (I) by striking ‘‘during fiscal 

6 year’’ and inserting ‘‘during fiscal 

7 years 2015 through 2021’’; and 

8 (II) by striking the period at the 

9 end and inserting ‘‘; and’’; and 

10 (iii) by adding at the end the fol11 lowing new subclause: 

12 ‘‘(V) for cost reporting periods beginning 

13 during fiscal year 2021 or a subsequent fiscal 

14 year, the percent applicable for cost reporting 

15 periods beginning during the previous fiscal 

16 year, increased (through fiscal year 2024) by 

17 10 percentage points.’’; and 

18 (B) in clause (ii)— 

19 (i) in subclause (III), by striking 

20 ‘‘and’’ at the end; and 

21 (ii) in subclause (IV)— 

22 (I) by striking ‘‘a subsequent fis23 cal year’’ and inserting ‘‘fiscal years 

24 2015 through 2021’’; 


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1 (II) by striking the period at the 

2 end and inserting ‘‘; and’’; and 

3 (III) by adding at the end the 

4 following new subclause: 

5 ‘‘(V) for cost reporting periods beginning 

6 during fiscal year 2021 or a subsequent fiscal 

7 year, shall be reduced by the percent applicable 

8 for cost reporting periods beginning during the 

9 previous fiscal year, increased (through fiscal 

10 year 2024) by 10 percentage points.’’; and 

11 (3) in subparagraph (W)(i)— 

12 (A) in subclause (II), by striking ‘‘and’’ at 

13 the end; 

14 (B) in subclause (III)— 

15 (i) by striking ‘‘during a subsequent 

16 fiscal year’’ and inserting ‘‘during fiscal 

17 years 2015 through 2021’’; and 

18 (ii) by striking the period at the end 

19 and inserting ‘‘; and’’; and 

20 (C) by adding at the end the following new 

21 subclause: 

22 ‘‘(IV) for cost reporting periods beginning dur23 ing fiscal year 2021 or a subsequent fiscal year, by 

24 the percent applicable for cost reporting periods be25 ginning during the previous fiscal year, increased 


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1 (through fiscal year 2024) by 10 percentage 

2 points.’’. 

3 Subtitle C—Medicare Choice and 

4 Competition 

5 SEC. 421. COMPETITIVE BIDDING AND PREMIUMS UNDER 

6 UNIFIED MEDICARE. 

7 (a) IN GENERAL.—Part E of title XVIII of the Social 

8 Security Act, as added by section 101 and amended by 

9 section 103, is further amended by adding at the end the 

10 following: 

11 ‘‘Subpart 3—Competitive Bidding and Premiums 

12 ‘‘SEC. 1860E–31. APPLICATION OF COMPETITIVE BIDDING IN 

13 ENROLLMENT. 

14 ‘‘(a) IN GENERAL.—Notwithstanding any other pro15 vision of this title, the Secretary shall, beginning with plan 

16 year 2021, establish a method whereby individuals enroll17 ing under this title so enroll through an online process 

18 designed to highlight enrollment options for such individ19 uals and allow such individuals to compare costs of enroll20 ment in such options. 

21 ‘‘(b) ENROLLMENT OPTIONS.—For purposes of sub22 section (a), the Secretary shall make the following options 

23 available to individuals for enrollment under this title: 

24 ‘‘(1) Traditional fee-for-service coverage. 


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1 ‘‘(2) provider-led risk-bearing plans (also known 

2 as ACOs). 

3 ‘‘(3) Medicare Advantage plans. 

4 ‘‘(c) MEDICARE ADVANTAGE PLAN ACTUARIAL

5 VALUE REQUIREMENT.—Each Medicare Advantage plan 

6 offered through the process described in subsection (a) 

7 shall have an actuarial value equal to traditional fee-for8 service coverage under parts A and B. 

9 ‘‘(d) MA DIRECT DEPOSIT OF CERTAIN REBATES.— 

10 In the case of an Medicare Advantage plan with a bid for 

11 a year that involves a premium differential between such 

12 bid and the benchmark for such year and plan, such plan 

13 shall provide for a direct deposit of such differential if the 

14 applicable enrollee in such plan does not elect any supple15 mental coverage under such plan. 

16 ‘‘(e) ENROLLMENT IN PRESCRIPTION DRUG COV17 ERAGE.—As part of the method described in subsection 

18 (a), the Secretary shall establish a process to allow an in19 dividual to enroll in prescription drug coverage. In the 

20 case of an individual who enrolls in a Medicare Advantage 

21 plan, such coverage shall be provided under such plan. In 

22 a case of an individual who enrolls in an ACO, such cov23 erage shall be provided under such network. In the case 

24 of an individual who enrolls under traditional fee-for-servVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00505 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 ice coverage, such drug coverage shall be provided through 

2 a prescription drug plan. 

3 ‘‘(f) SUPPLEMENTAL BENEFITS.— 

4 ‘‘(1) MA PLANS.—An MA plan is allowed to 

5 offer two different packages of supplemental benefits 

6 (these packages are available only to individuals who 

7 select such plans). 

8 ‘‘(2) ACOS.—ACOs may limit supplemental op9 tions for their enrollees to Medigap plans with con10 tractual ties. 

11 ‘‘(3) FEE-FOR-SERVICE.—Fee-for-service indi12 viduals may select supplemental coverage from 

13 Medigap policies. 

14 ‘‘SEC. 1860E–32. COMPETITION. 

15 ‘‘(a) BID AREAS.—Market areas used for bid submis16 sions for Medicare Advantage plans, ACOs, and for cal17 culation per person fee-for-services costs shall be metro18 politan statistical regions plus associated regions. 

19 ‘‘(b) PREMIUMS.—Medicare payment benchmark by 

20 market area shall be calculated based on weighted average 

21 (by enrollment in previous year) of the premium bids from 

22 MA plans, ACOs, and the per person costs of fee-for-serv23 ice, less the statutory part B premium. 

24 ‘‘(c) BENEFICIARY RESPONSIBILITY.—Beneficiaries 

25 shall pay the difference between Medicare payment and 


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1 required premium of the plan they choose, and get 100 

2 percent of the savings by choosing a plan with a premium 

3 below the benchmark. 

4 ‘‘(d) TRANSITION.—For beneficiaries who are in fee5 for-service at the time of the enactment of this section, 

6 there shall be a limit on the amount of a premium increase 

7 allowable by year of no more than $20 per month com8 pared to what such premium would have otherwise been 

9 if this subpart had not been enacted for each year through 

10 the fifth year. 

11 ‘‘(e) MULTIYEAR CONTRACTS.—A Medicare Advan12 tage plan may offer to beneficiaries multiyear contracts 

13 with guaranteed premiums over such years, bearing the 

14 risk of any change in payments from the Secretary in sub15 sequent years. A beneficiary enrolling under such a con16 tract shall be exempt from the method described in sub17 section (a).’’. 

18 (b) CONFORMING AMENDMENTS.— 

19 (1) Section 1853(a)(1)(A) of the Social Security 

20 Act is amended by striking ‘‘and section 1859(e)(4)’’ 

21 and inserting ‘‘, section 1859(e)(4), and subpart 3 

22 of part E’’. 

23 (2) Section 1853(j) of such Act is amended by 

24 inserting ‘‘and subpart 3 of part E’’ after ‘‘sub25 section (o)’’. 


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1 (3) Section 1854 of such Act is amended— 

2 (A) in subsection (a), after the heading, by 

3 inserting ‘‘Subject to subpart 3 of part E:’’; 

4 (B) in subsection (b), after the heading, by 

5 inserting ‘‘Subject to subpart 3 of part E:’’; 

6 (C) in subsection (d), after the heading, by 

7 inserting ‘‘Subject to subpart 3 of part E:’’; 

8 and 

9 (D) in subsection (e), after the heading, by 

10 inserting ‘‘Subject to subpart 3 of part E:’’. 

11 SEC. 422. NEW UNIFIED ELIGIBILITY AND ENROLLMENT 

12 RULES. 

13 (a) IN GENERAL.—Title XVIII of the Social Security 

14 Act is amended— 

15 (1) by redesignating part E as part F; and 

16 (2) by inserting after part D the following new 

17 part: 

18 ‘‘PART E—MEDICARE WITH CHOICE AND 

19 COMPETITION 

20 ‘‘Subpart 1—Opt-Out and Auto-Enrollment 

21 ‘‘SEC. 1860E–11. PART A OPT-OUT AND MA AUTO-ENROLL22 MENT. 

23 ‘‘(a) PERMITTING INDIVIDUALS TO OPT OUT OF

24 PART A COVERAGE WITHOUT LOSING SOCIAL SECURITY

25 BENEFITS.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall estab2 lish— 

3 ‘‘(A) a process by which an individual oth4 erwise entitled to benefits under part A may 

5 elect (at a time and in a manner specified 

6 under the process) to waive such entitlement; 

7 and 

8 ‘‘(B) a process by which an individual who 

9 elects to waive such entitlement may revoke (at 

10 a time and in a manner specified under the 

11 process) such waiver. 

12 The process under subparagraph (B) shall be coordi13 nated with the enrollment process under section 

14 1837 for part B. 

15 ‘‘(2) APPLICATION OF LATE ENROLLMENT PEN16 ALTY.—An individual who revokes a waiver under 

17 paragraph (1)(B) shall be subject to a late enroll18 ment penalty as applied under section 1860E– 

19 32(c)(2)(C). 

20 ‘‘(3) NO IMPACT ON TITLE II BENEFITS.—Not21 withstanding any other provision of law, an election 

22 of an individual to waive entitlement to benefits 

23 under part A under paragraph (1)(A) shall not re24 sult in any loss of benefits under title II. 

25 ‘‘(4) DEEMED OPT-OUT.— 


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1 ‘‘(A) An election of an individual to waive 

2 entitlement to benefits under part A under 

3 paragraph (1)(A) is also deemed the filing of a 

4 notice of termination of benefits under part B 

5 pursuant to section 1838(b)(1). 

6 ‘‘(B) The termination of benefits under 

7 part B pursuant to section 1838(b) is also 

8 deemed to be a waiver of any entitlement to 

9 benefits under part A. 

10 ‘‘(b) SPECIAL OPEN ENROLLMENT PERIOD WITH11 OUT LATE ENROLLMENT PENALTY FOR CURRENT PART

12 A ONLY OR PART B ONLY ENROLLEES.—Notwith13 standing any other provision of law, in the case of an indi14 vidual who as of the general effective date, is entitled to 

15 benefits under part A but not enrolled under part B, or 

16 who is enrolled under part B but not entitled to benefits 

17 (or enrolled) under part A, beginning as of such date, such 

18 individual shall be deemed to be enrolled under part B 

19 or part A, respectively, unless such individual elects to be 

20 enrolled (or entitled to benefits) under neither of such 

21 parts during a special open enrollment period specified by 

22 the Secretary. No increase in the monthly premium of an 

23 individual pursuant to section 1839(b) or section 1818(c) 

24 shall be effected in the case of any such individual who 

25 is deemed enrolled under part B or part A pursuant to 


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1 the previous sentence with respect to any period prior to 

2 the date of such enrollment. 

3 ‘‘(c) AUTO ENROLLMENT OF DUAL ELIGIBLE INDI4 VIDUALS UNDER MEDICARE ADVANTAGE PLANS.— 

5 ‘‘(1) IN GENERAL.—Except in the case of a 

6 State that has elected the maintenance of effort op7 tion described in section 1944(b)(2), in the case of 

8 an individual described in subparagraph (A)(ii) of 

9 section 1935(c)(6) (taking into account the applica10 tion of subparagraph (B) of such section), the Sec11 retary shall establish a process for the enrollment in 

12 an MA–PD plan that is a managed care plan under 

13 part C that has a monthly beneficiary premium that 

14 does not exceed the premium assistance available 

15 under section 1860E–41(b)(1)(A). If there is more 

16 than one such plan available, the Secretary shall en17 roll such an individual on a random basis among all 

18 such plans in the PDP region. 

19 ‘‘(2) RIGHT TO DISENROLL.—Nothing in para20 graph (1) shall prevent such an individual from de21 clining enrollment in any such plan (and thereby ob22 taining coverage under Medicare fee-for-service) or 

23 from changing enrollment in such a plan to another 

24 MA–PD plan. 


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1 ‘‘SEC. 1860E–12. COORDINATION WITH PART D. 

2 ‘‘(a) DEEMED ENROLLMENT UNDER PART D.— 

3 ‘‘(1) IN GENERAL.—The Secretary shall estab4 lish a process that, beginning as of the general effec5 tive date, provides for the enrollment in a prescrip6 tion drug plan that has a monthly base beneficiary 

7 premium that does not exceed the weighted average 

8 of premiums for such plans that provide standard 

9 prescription drug coverage (as defined in section 

10 1860D–2(b)) with respect to the area involved (on 

11 a random basis among all such plans in the applica12 ble PDP region) of each Medicare enrollee (as de13 fined in section 1860E–51) who— 

14 ‘‘(A) failed to enroll in such a prescription 

15 drug plan during the applicable enrollment or 

16 coverage election period under section 1860D– 

17 1(b); and 

18 ‘‘(B) failed to elect not to enroll in such a 

19 prescription drug plan during an applicable opt20 out period described in paragraph (2). 

21 Nothing in the previous sentence shall prevent such 

22 an individual from declining or changing such enroll23 ment. Such process shall be carried out in the same 

24 manner as the process described in section 1860D– 

25 1(b)(1)(C). 


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1 ‘‘(2) OPT-OUT PERIODS.—The process under 

2 paragraph (1) shall provide for the opportunity to 

3 make an election described in subparagraph (B) of 

4 such paragraph during an opt-out period that is co5 ordinated with the relevant enrollment or coverage 

6 election period under section 1860D–1. 

7 ‘‘(3) LATE ENROLLMENT PENALTIES.—In the 

8 case of an individual who makes an election de9 scribed in paragraph (1)(B) and then enrolls in a 

10 prescription drug plan, the late enrollment penalty 

11 under section 1860D–13(b) shall apply to the 

12 monthly beneficiary premium of such individual, ex13 cept that in applying such section, any reference to 

14 the initial enrollment period of such individual shall 

15 be deemed to be a reference to the opt-out period 

16 under paragraph (2) during which the individual 

17 elected not to enroll in a prescription drug plan. 

18 ‘‘(4) NO LATE ENROLLMENT PENALTY FOR

19 CURRENT FEE-FOR-SERVICE BENEFICIARIES WITH20 OUT DRUG COVERAGE.—In the case of an individual 

21 who is a Medicare enrollee before the date of enact22 ment of this section and who was not enrolled under 

23 a prescription drug plan before being enrolled under 

24 such a plan pursuant to paragraph (1), there shall 

25 be no increase in the base beneficiary premium of an 


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1 individual under section 1860D–13 by a late enroll2 ment penalty under subsection (b) of such section 

3 with respect to any period prior to the date of such 

4 enrollment. 

5 ‘‘(b) REFERENCE TO REQUIRED PRESCRIPTION

6 DRUG COVERAGE UNDER PART C.—For provision requir7 ing coverage under MA plans to include prescription drug 

8 coverage, see section 1860E–26.’’. 

9 (b) LIMITATION ON MEDICAID BENEFITS FOR FULL10 BENEFIT DUAL ELIGIBLE INDIVIDUALS.—Section 1902 

11 of the Social Security Act (42 U.S.C. 1396a) is amended 

12 by adding at the end the following new subsection: 

13 ‘‘(ll) LIMITATION ON BENEFITS FOR FULL-BENEFIT

14 DUAL ELIGIBLE INDIVIDUALS.—Effective as of the gen15 eral effective date (as specified in section 1860E–62), ex16 cept in the case of a State which has elected the option 

17 described in section 1944(b)(2), in the case of an indi18 vidual described in subparagraph (A)(ii) of section 

19 1935(c)(6) (taking into account the application of sub20 paragraph (B) of such section), notwithstanding any other 

21 provision of law, medical assistance shall not be available 

22 under this title for any items and services for which pay23 ment may be made under title XVIII.’’. 

24 (c) MEDICAID MAINTENANCE OF EFFORT AND AL25 TERNATIVES.—Title XIX of the Social Security Act is 


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1 amended by inserting after section 1943 the following new 

2 section: 

3 ‘‘MAINTENANCE OF EFFORT OPTIONS FOR FULL-BENEFIT

4 DUAL ELIGIBLE INDIVIDUALS

5 ‘‘SEC. 1944. (a) IN GENERAL.—Effective as of the 

6 general effective date (as specified in section 1860E–62), 

7 a State shall elect, in a form and manner specified by the 

8 Secretary, a maintenance of effort option described in sub9 section (b). In the case of a State that fails to make such 

10 an election, the State shall be deemed to have elected the 

11 option described in subsection (b)(3). 

12 ‘‘(b) MAINTENANCE OF EFFORT OPTIONS DE13 SCRIBED.—The following are maintenance of effort op14 tions described in this subsection for a State, which shall 

15 apply to all individuals described in subparagraph (A)(ii) 

16 of section 1935(c)(6) (taking into account the application 

17 of subparagraph (B) of such section) for such State: 

18 ‘‘(1) ENROLLMENT OF DUAL ELIGIBLES IN

19 COMPREHENSIVE MEDICAID MANAGED CARE PLAN.— 

20 ‘‘(A) IN GENERAL.—The State enrolls all 

21 such individuals in a comprehensive Medicaid 

22 managed care plan offered by a managed care 

23 entity under section 1932. 

24 ‘‘(B) PAYMENT OF SUBSIDY AMOUNT TO

25 STATE.—In the case of a State that elects the 

26 option under this paragraph with respect to an 


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1 individual, the Secretary established under sec2 tion 1860E–51 shall pay to the State the same 

3 amount that the individual would be entitled to 

4 have paid as an income-related premium sub5 sidy under section 1860E–41(b)(1)(A) plus the 

6 amount that the Secretary estimates would 

7 have been paid with respect to the individual 

8 under part D (including the actuarial value of 

9 subsidy payments under sections 1860D–13 

10 and 1860D–14). Such payment shall be made 

11 in appropriate part from the Federal Hospital 

12 Insurance Trust Fund under section 1817 and 

13 the Federal Supplementary Medical Insurance 

14 Trust Fund under section 1841. 

15 ‘‘(C) RELATION TO PART D RULES.—In 

16 the case of a State that has elected the option 

17 under this paragraph, notwithstanding any 

18 other provision of law— 

19 ‘‘(i) the coverage provided under this 

20 option shall be in lieu of any coverage that 

21 may otherwise be provided under part D; 

22 and 

23 ‘‘(ii) the payment to the State under 

24 subparagraph (B) shall be in lieu of any 


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1 payments otherwise made with respect to 

2 such individual under such part. 

3 ‘‘(2) OTHER INNOVATIVE ALTERNATIVES.— 

4 ‘‘(A) IN GENERAL.—The State submits to 

5 the Secretary, and has approved by the Sec6 retary, an innovative alternative proposal relat7 ing to coordinating coverage of such individuals 

8 under Medicare and the State plan under title 

9 XIX. 

10 ‘‘(B) PROCESS FOR REVIEW.—With re11 spect to proposals submitted to the Secretary 

12 under subparagraph (A), the Secretary shall ap13 prove such a proposal if the State demonstrates 

14 with respect to the proposal that— 

15 ‘‘(i) there would be no increased cost 

16 to the Federal Government if it were ap17 proved; and 

18 ‘‘(ii) there would be no reduction in 

19 the quality of care provided to such indi20 viduals if the proposal were approved.’’. 

21 (d) CONFORMING AMENDMENTS.— 

22 (1) SECTION 226.—Section 226 of the Social 

23 Security Act (42 U.S.C. 426) is amended— 


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1 (A) in subsection (a), in the matter pre2 ceding paragraph (1), by inserting ‘‘, subject to 

3 section 1860E–11(a)’’ after ‘‘individual who’’; 

4 (B) in subsection (b), in the matter pre5 ceding paragraph (1), by inserting ‘‘, subject to 

6 section 1860E–11(a)’’ after ‘‘individual who’’; 

7 and 

8 (C) in subsection (c), in the matter pre9 ceding paragraph (1), by inserting ‘‘, subject to 

10 section 1860E–11(a)’’ after ‘‘subsection (a)’’. 

11 (2) SECTION 226A.—Section 226A(a) of such 

12 Act (42 U.S.C. 426–1(a)) is amended, in the matter 

13 preceding paragraph (1), by inserting ‘‘and subject 

14 to section 1860E–11(a)’’ after ‘‘or title XVIII’’. 

15 (3) SECTION 1932.—Section 1932(a)(2)(B) of 

16 the Social Security Act (42 U.S.C. 1396u– 

17 2(a)(2)(B)) is amended by striking ‘‘A State’’ and 

18 inserting ‘‘Except in the case of a State that has 

19 elected the maintenance of effort option described in 

20 section 1944(b)(2), a State’’. 

21 SEC. 423. NEW BENEFIT STRUCTURE UNDER UNIFIED 

22 MEDICARE. 

23 (a) IN GENERAL.—Part E of title XVIII of the Social 

24 Security Act, as added by section 251, is amended by add25 ing at the end the following: 


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1 ‘‘Subpart 2—Out-of-Pocket Limit 

2 ‘‘SEC. 1860E–21. OUT-OF-POCKET LIMIT. 

3 ‘‘(a) IN GENERAL.—Beginning with 2021, in the case 

4 of a Medicare enrollee, if the amount of the out-of-pocket 

5 cost-sharing of such enrollee for a calendar year equals 

6 or exceeds the catastrophic limit under subsection (b) for 

7 that year— 

8 ‘‘(1) the enrollee shall not be responsible for ad9 ditional out-of-pocket cost-sharing incurred during 

10 that year; and 

11 ‘‘(2) the Secretary shall establish procedures 

12 under which the Secretary shall, in appropriate part 

13 from the Part A Medicare FFS Account under sec14 tion 1817 and the Part B Medicare FFS Account 

15 under section 1841— 

16 ‘‘(A) pay on behalf of the enrollee the 

17 amount of the additional out-of-pocket cost18 sharing described in paragraph (1) attributable 

19 to deductibles and coinsurance described in sub20 section (c)(1); and 

21 ‘‘(B) reimburse the enrollee the amount of 

22 the additional out-of-pocket cost-sharing de23 scribed in paragraph (1) attributable to 

24 deductibles and coinsurance described in sub25 section (c)(2). 


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1 ‘‘(b) CATASTROPHIC LIMIT.—The amount of the cat2 astrophic limit under this subsection for a year shall be 

3 the dollar amount in effect under section 223(c)(2)(A)(ii) 

4 of the Internal Revenue Code of 1986 for self-only cov5 erage for taxable years beginning in such year. 

6 ‘‘(c) OUT-OF-POCKET COST-SHARING DEFINED.—In 

7 this section, the term ‘out-of-pocket cost-sharing’ means, 

8 with respect to an individual, the amount of costs incurred 

9 by the individual that are attributable to— 

10 ‘‘(1) deductibles and coinsurance imposed under 

11 part A or part B; and 

12 ‘‘(2) deductibles and coinsurance imposed under 

13 standard prescription drug coverage pursuant to sec14 tion 1860D–2(b) or alternative prescription drug 

15 coverage pursuant to section 1860D–2(c) offered by 

16 a prescription drug plan.’’. 

17 (b) APPLICATION OF OUT-OF-POCKET LIMIT TO MA– 

18 PD PLANS.— 

19 (1) IN GENERAL.—Section 1852(a)(1)(B) of the 

20 Social Security Act (42 U.S.C. 1395w–22(a)(1)(B)) 

21 is amended— 

22 (A) in clause (i), by striking ‘‘clause (iii)’’ 

23 and inserting ‘‘clauses (iii) and (vi)’’; and 

24 (B) by adding at the end the following new 

25 clause: 


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1 ‘‘(vi) OUT-OF-POCKET LIMIT.—The 

2 provisions of section 1860E–21— 

3 ‘‘(I) shall apply to individuals en4 rolled under an MA–PD plan in the 

5 same manner as such provisions apply 

6 to Medicare enrollees under such sec7 tion, except that in lieu of the applica8 tion of subsection (a)(2) of such sec9 tion the MA–PD plan shall establish 

10 procedures to provide for payment of 

11 any additional out-of-pocket cost-shar12 ing described in subsection (a)(1) of 

13 such section incurred by individuals 

14 enrolled under the MA–PD plan; and 

15 ‘‘(II) as applied under subclause 

16 (I), may not be waived by application 

17 of this subparagraph. 

18 In applying subsection (b) of section 

19 1860E–21 pursuant to the previous sen20 tence, an MA–PD plan may substitute a 

21 dollar amount that is less than the dollar 

22 amount specified under such subsection.’’. 

23 (2) EXEMPTING MA–PD PLANS OFFERING AL24 TERNATIVE PRESCRIPTION DRUG COVERAGE FROM

25 PART D DEDUCTIBLE AND OUT-OF-POCKET LIMIT


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1 REQUIREMENTS.—Section 1860D–2(c) of the Social 

2 Security Act (42 U.S.C. 1395w–102(c)) is amend3 ed— 

4 (A) in paragraph (2), by striking ‘‘The de5 ductible’’ and inserting ‘‘In the case of a pre6 scription drug plan, the deductible’’; and 

7 (B) in paragraph (3), by striking ‘‘The 

8 coverage provides’’ and inserting ‘‘In the case 

9 of a prescription drug plan, the coverage pro10 vides’’. 

11 (c) PRESCRIPTION DRUG PLANS REQUIRED TO RE12 PORT ENROLLEES’ OUT-OF-POCKET COST-SHARING.— 

13 Section 1860D–12(b) of the Social Security Act (42 

14 U.S.C. 1395w–112(b)) is amended by adding at the end 

15 the following new paragraph: 

16 ‘‘(7) OUT-OF-POCKET COST-SHARING RE17 PORTS.—Each contract entered into with a PDP 

18 sponsor under this part with respect to a prescrip19 tion drug plan offered by such sponsor shall require 

20 that, with respect to each claim submitted for items 

21 or services furnished to an individual enrolled under 

22 the plan pursuant to the contract, the sponsor sub23 mits to the Secretary information on the amount of 

24 out-of-pocket cost-sharing (as defined in section 


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1 1860E–23(c)) applicable to such enrollee for such 

2 items or services.’’. 

3 (d) CONFORMING AMENDMENTS.— 

4 (1) Section 1813 of the Social Security Act (42 

5 U.S.C. 1395e) is amended— 

6 (A) in subsection (a), by inserting ‘‘Subject 

7 to subpart 2 of part E:’’ before paragraph (1); 

8 and 

9 (B) in subsection (b), by inserting ‘‘Sub10 ject to subpart 2 of part E:’’ before paragraph 

11 (1). 

12 (2) Section 1833 of such Act (42 U.S.C. 1395l) 

13 is amended— 

14 (A) in subsection (a), in the matter pre15 ceding paragraph (1), by inserting ‘‘and sub16 part 2 of part E’’ after ‘‘succeeding provisions 

17 of this section’’; 

18 (B) in subsection (b), in the first sentence, 

19 by striking ‘‘Before applying’’ and inserting 

20 ‘‘Subject to subpart 2 of part E, before apply21 ing’’; 

22 (C) in subsection (c)(1), in the matter pre23 ceding subparagraph (A), by inserting ‘‘subject 

24 to subpart 2 of part E,’’ after ‘‘this part,’’; 


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1 (D) in subsection (f), by striking ‘‘In es2 tablishing’’ and inserting ‘‘Subject to subpart 2 

3 of part E, in establishing’’; and 

4 (E) in subsection (g)(1), by inserting ‘‘and 

5 subpart 2 of part E’’ and ‘‘paragraphs (4) and 

6 (5)’’. 

7 (3) Section 1882(a)(2) of such Act is amended 

8 by striking ‘‘No medicare’’ and inserting ‘‘Subject to 

9 section 1860E–24(c), no medicare’’. 

10 SEC. 424. LATE ENROLLMENT PENALTY NOT TO APPLY FOR 

11 MONTHS OF ANY HEALTH COVERAGE. 

12 (a) IN GENERAL.—Section 1839(b) of the Social Se13 curity Act (42 U.S.C. 1395r) is amended in the second 

14 sentence, by inserting before the period at the end the fol15 lowing: ‘‘or months during which the individual has any 

16 other health coverage’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 paragraph (1) shall apply for months of coverage begin19 ning after the date of the enactment of this Act. 

20 SEC. 425. MEDIGAP REFORM. 

21 Notwithstanding any provision of section 1882 of the 

22 Social Security Act (42 U.S.C. 1395ss), as of the date 

23 of the enactment of this Act, no policy may be offered 

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1 tions, if any) to all individuals eligible to enroll under such 

2 policy. 

3 SEC. 426. ACO REVISION. 

4 (a) ENROLLMENT.—Enrollment in such an ACO 

5 under such title shall be based on the method established 

6 under part E of such title. Such a network shall bear full 

7 risk in the event payments under such title do not equal 

8 or exceed liabilities under such network. 

9 (b) DIRECTION OF PAYMENT.—An ACO may direct 

10 that any payments under such title be made to a central11 ized entity rather than to an individual provider or sup12 plier. 

13 (c) BIDS.—The Secretary of Health and Human 

14 Services shall establish a process whereby such networks 

15 compete using a bidding process similar to that described 

16 in part E of such title for Medicare Advantage plans. 

17 SEC. 427. PRIMARY CARE OPTIONS. 

18 (a) SELECTION OF PRIMARY CARE PHYSICIAN.—The 

19 Secretary shall establish a mechanism under which an in20 dividual enrolled under part B of title XVIII of the Social 

21 Security Act may select such individual’s primary care 

22 physician. Such an individual shall not be liable for more 

23 than $5 for each visit to such selected physician. 

24 (b) PAYMENT TO PHYSICIAN.—A physician selected 

25 under subsection (a) shall receive a monthly fee in lieu 


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1 of any other payment under such part B for evaluation 

2 and monitoring of such individual. The Secretary shall 

3 provide a list of standardized benefits that are included 

4 in such payment, including telephone and email commu5 nications, office visits, preventive care, and vaccinations. 

6 SEC. 428. GENERAL PROVISIONS; EFFECTIVE DATE. 

7 Part E of title XVIII of the Social Security Act, as 

8 inserted by section 101(a)(2) and as previously amended, 

9 is further amended by adding at the end the following new 

10 subpart: 

11 ‘‘Subpart 5.—General Provisions 

12 ‘‘SEC. 1860E–51. APPLICABILITY; DEFINITIONS. 

13 ‘‘(a) IN GENERAL.—The provisions of this Act are 

14 superseded to the extent inconsistent with the provisions 

15 of this part. 

16 ‘‘(b) TERMINOLOGY.—For purposes of this part: 

17 ‘‘(1) MEDICARE ENROLLEE.— 

18 ‘‘(A) IN GENERAL.—The term ‘Medicare 

19 enrollee’ means— 

20 ‘‘(i) an individual entitled to (or en21 rolled for benefits) under part A and en22 rolled under part B; and 

23 ‘‘(ii) except as otherwise specified, an 

24 individual described in section 1860E– 

25 11(a)(3). 


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1 ‘‘(B) TREATMENT.—Any reference in this 

2 Act (or any other Act) in effect before the date 

3 of the enactment of this part, to an individual 

4 entitled to benefits under part A or enrolled 

5 under part B shall be deemed a reference to a 

6 Medicare enrollee. 

7 ‘‘(2) MEDICARE FEE-FOR-SERVICE.—The term 

8 ‘Medicare fee-for-service’ means the original Medi9 care fee-for-service program under parts A and B, 

10 as modified by this part, and does not include part 

11 C or part D. 

12 ‘‘(3) MEDICARE FEE-FOR-SERVICE EN13 ROLLEE.—The term ‘Medicare fee-for-service en14 rollee’ means a Medicare enrollee who is not enrolled 

15 under a Medicare Advantage plan under part C. 

16 ‘‘SEC. 1860E–61. GENERAL EFFECTIVE DATE. 

17 ‘‘Except as otherwise specified, the provisions of this 

18 part shall apply to items and services furnished on or after 

19 January 1, 2021, and to plan years beginning on or after 

20 such date (referred to in this title as the ‘general effective 

21 date’).’’. 


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1 Subtitle D—Telehealth 

2 Improvements and Expansion 

3 SEC. 431. EXPANSION OF COVERAGE OF TELEHEALTH 

4 SERVICES. 

5 (a) COVERED SERVICES.—Section 1834(m)(4)(F)(i) 

6 of the Social Security Act (42 U.S.C. 1395m(m)(4)(F)(i)) 

7 is amended— 

8 (1) by striking ‘‘and office’’ and inserting ‘‘of9 fice’’; and 

10 (2) by inserting: ‘‘respiratory services, audiology 

11 services (as defined in section 1861(ll)), outpatient 

12 therapy services (including physical therapy, occupa13 tional therapy, and speech-language pathology serv14 ices)’’ after ‘‘the Secretary)),’’. 

15 (b) PROVIDERS.—Subsection (m) of section 1834 of 

16 such Act (42 U.S.C. 1395m) is amended— 

17 (1) in paragraph (1), by striking ‘‘or a practi18 tioner (described in section 1842(b)(18)(C))’’ and 

19 inserting ‘‘, a practitioner (described in section 

20 1842(b)(18)(C)), or an applicable professional (as 

21 defined in paragraph (4)(G))’’; 

22 (2) by striking ‘‘physician or practitioner’’ each 

23 time it appears in such subsection and inserting 

24 ‘‘physician, practitioner, or applicable professional’’; 

25 (3) in paragraph (3)(A)— 


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1 (A) in the heading, by striking ‘‘PHYSI2 CIAN AND PRACTITIONER’’ and inserting ‘‘PHY3 SICIAN, PRACTITIONER, AND APPLICABLE PRO4 FESSIONAL’’; and 

5 (B) by striking ‘‘physicians or practi6 tioners’’ and inserting ‘‘physicians, practi7 tioners, or applicable professionals’’; and 

8 (4) in paragraph (4), by adding at the end the 

9 following new subparagraph: 

10 ‘‘(G) APPLICABLE PROFESSIONAL.—The 

11 term ‘applicable professional’ means, with re12 spect to services furnished on or after the date 

13 that is 6 months after the date of the enact14 ment of this subparagraph, a certified diabetes 

15 educator or licensed— 

16 ‘‘(i) respiratory therapist; 

17 ‘‘(ii) audiologist; 

18 ‘‘(iii) occupational therapist; 

19 ‘‘(iv) physical therapist; or 

20 ‘‘(v) speech language pathologist.’’. 

21 (c) HOME-BASED MONITORING SERVICES FOR CON22 GESTIVE HEART FAILURE AND CHRONIC OBSTRUCTIVE

23 PULMONARY DISEASE.— 


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1 (1) COVERAGE OF REMOTE PATIENT MONI2 TORING SERVICES FOR CERTAIN CHRONIC HEALTH

3 CONDITIONS.— 

4 (A) IN GENERAL.—Section 1861(s)(2) of 

5 the Social Security Act (42 U.S.C. 1395x(s)(2)) 

6 is amended— 

7 (i) in subparagraph (GG), by striking 

8 ‘‘and’’ at the end; 

9 (ii) in subparagraph (HH), by insert10 ing ‘‘and’’ at the end; and 

11 (iii) by inserting after subparagraph 

12 (HH) the following new subparagraph: 

13 ‘‘(II) applicable remote patient monitoring 

14 services (as defined in paragraph (1)(A) of sub15 section (iii));’’. 

16 (2) SERVICES DESCRIBED.—Section 1861 of 

17 the Social Security Act (42 U.S.C. 1395x) is amend18 ed by adding at the end the following new sub19 section: 

20 ‘‘(kkk) REMOTE PATIENT MONITORING SERVICES

21 FOR CHRONIC HEALTH CONDITIONS.— 

22 ‘‘(1)(A) The term ‘applicable remote patient 

23 monitoring services’ means remote patient moni24 toring services (as defined in subparagraph (B)) fur25 nished to provide for the monitoring, evaluation, and 


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1 management of an individual with a covered chronic 

2 condition (as defined in paragraph (2)), insofar as 

3 such services are for the management of such chron4 ic condition. 

5 ‘‘(B) The term ‘remote patient monitoring serv6 ices’ means services furnished through remote pa7 tient monitoring technology (as defined in subpara8 graph (C)). 

9 ‘‘(C) The term ‘remote patient monitoring tech10 nology’ means a coordinated system that uses one or 

11 more home-based or mobile monitoring devices that 

12 automatically transmit vital sign data or information 

13 on activities of daily living and may include re14 sponses to assessment questions collected on the de15 vices wirelessly or through a telecommunications 

16 connection to a server that complies with the Fed17 eral regulations (concerning the privacy of individ18 ually identifiable health information) promulgated 

19 under section 264(c) of the Health Insurance Port20 ability and Accountability Act of 1996, as part of an 

21 established plan of care for that patient that in22 cludes the review and interpretation of that data by 

23 a health care professional. 

24 ‘‘(2) For purposes of paragraph (1), the term 

25 ‘covered chronic health condition’ means applicable 


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1 conditions (as defined in and applied under section 

2 1886(q)(5)) when under chronic care management 

3 (identified as of July 1, 2015, by HCPCS code 

4 99490 (and as subsequently modified by the Sec5 retary)). 

6 ‘‘(3)(A) Payment may be made under this part 

7 for applicable remote patient monitoring services 

8 provided to an individual during a period of up to 

9 90 days and such additional period as provided for 

10 under subparagraph (B). 

11 ‘‘(B) The 90-day period described in subpara12 graph (A), with respect to an individual, may be re13 newed by the physician who provides chronic care 

14 management to such individual if the individual con15 tinues to qualify for such management.’’. 

16 (3) PAYMENT UNDER THE PHYSICIAN FEE

17 SCHEDULE.—Section 1848 of the Social Security 

18 Act (42 U.S.C. 1395w–4) is amended— 

19 (A) in subsection (c)— 

20 (i) in paragraph (2)(B)— 

21 (I) in clause (ii)(II), by striking 

22 ‘‘and (v)’’ and inserting ‘‘(v), and 

23 (vii)’’; and 

24 (II) by adding at the end the fol25 lowing new clause: 


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1 ‘‘(vii) BUDGETARY TREATMENT OF

2 CERTAIN SERVICES.—The additional ex3 penditures attributable to services de4 scribed in section 1861(s)(2)(II) shall not 

5 be taken into account in applying clause 

6 (ii)(II).’’; and 

7 (ii) by adding at the end the following 

8 new paragraph: 

9 ‘‘(7) TREATMENT OF APPLICABLE REMOTE PA10 TIENT MONITORING SERVICES.— 

11 ‘‘(A) In determining relative value units 

12 for applicable remote patient monitoring serv13 ices (as defined in section 1861(iii)(1)(A)), the 

14 Secretary, in consultation with appropriate phy15 sician groups, practitioner groups, and supplier 

16 groups, shall take into consideration— 

17 ‘‘(i) physician or practitioner re18 sources, including physician or practitioner 

19 time and the level of intensity of services 

20 provided, based on— 

21 ‘‘(I) the frequency of evaluation 

22 necessary to manage the individual 

23 being furnished the services; 

24 ‘‘(II) the complexity of the eval25 uation, including the information that 


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1 must be obtained, reviewed, and ana2 lyzed; and 

3 ‘‘(III) the number of possible di4 agnoses and the number of manage5 ment options that must be considered; 

6 ‘‘(ii) practice expense costs associated 

7 with such services, including the direct 

8 costs associated with installation and infor9 mation transmission, costs of remote pa10 tient monitoring technology (including 

11 equipment and software), device delivery 

12 costs, and resource costs necessary for pa13 tient monitoring and followup (but not in14 cluding costs of any related item or non15 physician service otherwise reimbursed 

16 under this title); and 

17 ‘‘(iii) malpractice expense resources. 

18 ‘‘(B) Using the relative value units deter19 mined in subparagraph (A), the Secretary shall 

20 provide for separate payment for such services 

21 and shall not adjust the relative value units as22 signed to other services that might otherwise 

23 have been determined to include such separately 

24 paid remote patient monitoring services.’’; and 


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1 (B) in subsection (j)(3), by inserting 

2 ‘‘(2)(II),’’ after ‘‘health risk assessment),’’. 

3 SEC. 432. EXPANDING THE USE OF TELEHEALTH THROUGH 

4 THE WAIVER OF CERTAIN REQUIREMENTS. 

5 (a) IN GENERAL.—Section 1834(m) of the Social Se6 curity Act (42 U.S.C. 1395m(m)) is amended— 

7 (1) in paragraph (4)(C)(i), by striking ‘‘and 

8 (7)’’ and inserting ‘‘(7), and (8)’’; and 

9 (2) by adding at the end the following: 

10 ‘‘(8) AUTHORITY TO WAIVE REQUIREMENTS

11 AND LIMITATIONS IF CERTAIN CONDITIONS MET.— 

12 ‘‘(A) IN GENERAL.—Notwithstanding the 

13 preceding provisions of this subsection, in the 

14 case of telehealth services furnished on or after 

15 January 1, 2021, the Secretary may waive any 

16 restriction applicable to payment for telehealth 

17 services under this subsection that is described 

18 in subparagraph (B), but only if the Secretary 

19 determines that such waiver would not deny or 

20 limit the coverage or provision of benefits under 

21 this title, and— 

22 ‘‘(i) the Secretary determines that the 

23 waiver is expected to reduce spending 

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1 ity of care or improve the quality of pa2 tient care without increasing spending; or 

3 ‘‘(ii) the waiver would apply to tele4 health services furnished in originating 

5 sites located in a high-need health profes6 sional shortage area (as designated pursu7 ant to section 332(a)(1)(A) of the Public 

8 Health Service Act (42 U.S.C. 

9 254e(a)(1)(A))). 

10 ‘‘(B) RESTRICTIONS DESCRIBED.—For 

11 purposes of this paragraph, restrictions applica12 ble to payment for telehealth services under 

13 paragraph (1) are— 

14 ‘‘(i) requirements relating to qualifica15 tions for an originating site under para16 graph (4)(C)(ii); 

17 ‘‘(ii) any geographic limitations under 

18 paragraph (4)(C)(i) (other than applicable 

19 State law requirements, including State li20 censure requirements); 

21 ‘‘(iii) any limitation on the type of 

22 technology used to furnish telehealth serv23 ices; 

24 ‘‘(iv) any limitation on the type of 

25 provider of services or supplier who may 


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1 furnish telehealth services (other than the 

2 requirement that the provider of services 

3 or supplier is enrolled under this title); 

4 ‘‘(v) any limitation on specific services 

5 designated as telehealth services pursuant 

6 to this subsection (provided the Secretary 

7 determines that such services are clinically 

8 appropriate to furnish remotely); or 

9 ‘‘(vi) any other limitation relating to 

10 the furnishing of telehealth services under 

11 this title identified by the Secretary. 

12 ‘‘(C) PUBLIC COMMENT.—The Secretary 

13 shall establish a process by which stakeholders 

14 may (on at least an annual basis) provide public 

15 comment for waivers under this paragraph. 

16 ‘‘(D) PERIODIC REVIEW OF WAIVERS.— 

17 The Secretary shall periodically, but not more 

18 often than every 3 years, reassess each waiver 

19 under this paragraph to determine whether the 

20 waiver continues to meet the conditions applica21 ble under subparagraph (A).’’. 

22 (b) POSTING OF INFORMATION.—Not later than 2 

23 years after the date on which a waiver under section 

24 1834(m)(8) of the Social Security Act, as added by sub25 section (a), first becomes effective, and at least biennially 


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1 thereafter, the Secretary of Health and Human Services 

2 shall post on the internet website of the Centers for Medi3 care & Medicaid Services— 

4 (1) the number of Medicare beneficiaries receiv5 ing telehealth services by reason of each waiver 

6 under such section; 

7 (2) the impact of such waivers on expenditures 

8 and utilization under title XVIII of the Social Secu9 rity Act (42 U.S.C. 1395 et seq.); and 

10 (3) other outcomes, as determined appropriate 

11 by the Secretary. 

12 SEC. 433. EXPANDING THE USE OF TELEHEALTH FOR MEN13 TAL HEALTH SERVICES. 

14 (a) IN GENERAL.—Section 1834(m) of the Social Se15 curity Act (42 U.S.C. 1395m(m)), as amended by the pre16 ceding sections, is amended— 

17 (1) in paragraph (4)(C)(i), by striking ‘‘and 

18 (8)’’ and inserting ‘‘(8), and (9)’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(9) TREATMENT OF MENTAL HEALTH SERV21 ICES FURNISHED THROUGH TELEHEALTH.—The ge22 ographic requirements described in paragraph 

23 (4)(C)(i) (other than applicable State law require24 ments, including State licensure requirements) shall 

25 not apply with respect to telehealth services that are 


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1 mental health services (as determined by the Sec2 retary) furnished on or after January 1, 2021, to an 

3 eligible telehealth individual at an originating site 

4 described in paragraph (4)(C)(ii) (other than an 

5 originating site described in subclause (IX) of such 

6 paragraph).’’. 

7 (b) INCLUSION OF THE HOME AS AN ORIGINATING

8 SITE.—Section 1834(m)(4)(C)(ii)(X) of such Act (42 

9 U.S.C. 1395m(m)(4)(C)(ii)(X)) is amended by striking 

10 ‘‘paragraph (7)’’ and inserting ‘‘paragraphs (7) and (9)’’. 

11 (c) ADDITIONAL SERVICES.—As part of the imple12 mentation of the amendments made by this section, the 

13 Secretary of Health and Human Services shall consider 

14 whether additional services should be added to the services 

15 specified in paragraph (4)(F)(i) of section 1834(m) of 

16 such Act (42 U.S.C. 1395m) for authorized payment 

17 under paragraph (1) of such section. 

18 SEC. 434. USE OF TELEHEALTH IN EMERGENCY MEDICAL 

19 CARE. 

20 (a) IN GENERAL.—Section 1834(m) of the Social Se21 curity Act (42 U.S.C. 1395m(m)), as amended by the pre22 ceding sections, is amended— 

23 (1) in paragraph (4)(C)(i), by striking ‘‘and 

24 (9)’’ and inserting ‘‘(9), and (10)’’; and 

25 (2) by adding at the end the following: 


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1 ‘‘(10) TREATMENT OF EMERGENCY MEDICAL

2 CARE FURNISHED THROUGH TELEHEALTH.—The 

3 geographic requirements described in paragraph 

4 (4)(C)(i) (other than applicable State law require5 ments, including State licensure requirements) shall 

6 not apply with respect to telehealth services that are 

7 services for emergency medical care (as determined 

8 by the Secretary) furnished on or after January 1, 

9 2021, to an eligible telehealth individual at an origi10 nating site described in subclause (II), (V), or (VII) 

11 of paragraph (4)(C)(ii).’’. 

12 (b) ADDITIONAL SERVICES.—As part of the imple13 mentation of the amendments made by this section, the 

14 Secretary of Health and Human Services shall consider 

15 whether additional services should be added to the services 

16 specified in paragraph (4)(F)(i) of section 1834(m) of 

17 such Act (42 U.S.C. 1395m) for authorized payment 

18 under paragraph (1) of such section. 

19 SEC. 435. IMPROVEMENTS TO THE PROCESS FOR ADDING 

20 TELEHEALTH SERVICES. 

21 The Secretary shall undertake a review of the process 

22 established pursuant to section 1834(m)(4)(F)(ii) of the 

23 Social Security Act (42 U.S.C. 1395m(m)(4)(F)(ii)), and 

24 based on the results of such review— 


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1 (1) implement revisions to the process so that 

2 the criteria to add services prioritizes, as appro3 priate, improved access to care through telehealth 

4 services; and 

5 (2) provide clarification on what requests to 

6 add telehealth services under such process should in7 clude. 

8 SEC. 436. RURAL HEALTH CLINICS AND FEDERALLY QUALI9 FIED HEALTH CENTERS. 

10 (a) EXPANSION OF ORIGINATING SITES.—Section 

11 1834(m)(4)(C) of the Social Security Act (42 U.S.C. 

12 1395m(m)(4)(C)), as amended by the preceding sections, 

13 is amended— 

14 (1) in clause (i), by striking ‘‘and (10)’’ and in15 serting ‘‘and (10), and subject to clause (iii),’’; and 

16 (2) by adding at the end the following new 

17 clause: 

18 ‘‘(iii) RURAL HEALTH CLINICS AND

19 FEDERALLY QUALIFIED HEALTH CEN20 TERS.—The term ‘originating site’ shall 

21 also include any Federally qualified health 

22 center and any rural health clinic (as such 

23 terms are defined in section 1861(aa)) at 

24 which the eligible telehealth individual is 

25 located at the time the service is furnished 


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1 via a telecommunications system, whether 

2 or not the individual is located in an area 

3 described in clause (i), insofar as such 

4 sites are not otherwise included in the defi5 nition of originating site under such 

6 clause, subject to applicable State law re7 quirements, including State licensure re8 quirements.’’. 

9 (b) EXPANSION OF DISTANT SITES.—Section 

10 1834(m) of the Social Security Act (42 U.S.C. 1395m(m)) 

11 is amended— 

12 (1) in the first sentence of paragraph (1)— 

13 (A) by striking ‘‘or a practitioner (de14 scribed in section 1842(b)(18)(C))’’ and insert15 ing ‘‘, a practitioner (described in section 

16 1842(b)(18)(C)), a Federally qualified health 

17 center, or a rural health clinic’’; and 

18 (B) by striking ‘‘or practitioner’’ and in19 serting ‘‘, practitioner, Federally qualified 

20 health center, or rural health clinic’’; 

21 (2) in paragraph (2)(A)— 

22 (A) by inserting ‘‘or to a Federally quali23 fied health center or rural health clinic that 

24 serves as a distant site’’ after ‘‘a distant site’’; 

25 and 


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1 (B) by striking ‘‘such physician or practi2 tioner’’ and inserting ‘‘such physician, practi3 tioner, Federally qualified health center, or 

4 rural health clinic’’; and 

5 (3) in paragraph (4)— 

6 (A) in subparagraph (A), by inserting 

7 ‘‘and includes a Federally qualified health cen8 ter or rural health clinic that furnishes a tele9 health service to an eligible individual’’ before 

10 the period at the end; and 

11 (B) in subparagraph (F), by adding at the 

12 end the following new clause: 

13 ‘‘(iii) INCLUSION OF RURAL HEALTH

14 CLINIC SERVICES AND FEDERALLY QUALI15 FIED HEALTH CENTER SERVICES FUR16 NISHED USING TELEHEALTH.—For pur17 poses of this subparagraph, the term ‘tele18 health services’ includes a rural health 

19 clinic service or Federally qualified health 

20 center service that is furnished using tele21 health to the extent that payment codes 

22 corresponding to services identified by the 

23 Secretary under clause (i) or (ii) are listed 

24 on the corresponding claim for such rural 


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1 health clinic service or Federally qualified 

2 health center service.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to services furnished on or after 

5 January 1, 2021. 

6 SEC. 437. NATIVE AMERICAN HEALTH FACILITIES. 

7 (a) IN GENERAL.—Section 1834(m)(4)(C) of the So8 cial Security Act (42 U.S.C. 1395m(m)(4)(C)), as amend9 ed by the preceding sections, is amended— 

10 (1) in clause (i), by striking ‘‘clause (iii)’’ and 

11 inserting ‘‘clauses (iii) and (iv)’’; and 

12 (2) by adding at the end the following new 

13 clause: 

14 ‘‘(iv) NATIVE AMERICAN HEALTH FA15 CILITIES.—The originating site require16 ments described in clauses (i) and (ii) shall 

17 not apply with respect to a facility of the 

18 Indian Health Service, whether operated 

19 by such Service, or by an Indian tribe (as 

20 that term is defined in section 4 of the In21 dian Health Care Improvement Act (25 

22 U.S.C. 1603)) or a tribal organization (as 

23 that term is defined in section 4 of the In24 dian Self-Determination and Education 

25 Assistance Act (25 U.S.C. 5304)), or a faVerDate Sep 11 2014 21:34 Nov 03, 2020 Jkt 019200 PO 00000 Frm 00544 Fmt 6652 Sfmt 6201 E:\BILLS\S4796.IS S4796

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1 cility of the Native Hawaiian health care 

2 systems authorized under the Native Ha3 waiian Health Care Improvement Act (42 

4 U.S.C. 11701 et seq.).’’. 

5 (b) NO ORIGINATING SITE FACILITY FEE FOR NEW

6 SITES.—Section 1834(m)(2)(B)(i) of the Social Security 

7 Act (42 U.S.C. 1395m(m)(2)(B)(i)) is amended, in the 

8 matter preceding subclause (I), by inserting ‘‘(other than 

9 an originating site that is only described in clause (iv) of 

10 paragraph (4)(C), and does not meet the requirement for 

11 an originating site under clause (i) of such paragraph)’’ 

12 after ‘‘the originating site’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to services furnished on or after 

15 January 1, 2021. 

16 SEC. 438. WAIVER OF TELEHEALTH RESTRICTIONS DURING 

17 NATIONAL EMERGENCIES. 

18 Section 1135(b) of the Social Security Act (42 U.S.C. 

19 1320b–5(b)) is amended— 

20 (1) in paragraph (6), by striking ‘‘and’’ after 

21 the semicolon; 

22 (2) in paragraph (7), by striking the period at 

23 the end and inserting ‘‘; and’’; and 

24 (3) by adding at the end the following: 


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1 ‘‘(8) requirements for payment for telehealth 

2 services under section 1834(m).’’. 

3 SEC. 439. USE OF TELEHEALTH IN RECERTIFICATION FOR 

4 HOSPICE CARE. 

5 (a) IN GENERAL.—Section 1814(a)(7)(D)(i) of the 

6 Social Security Act (42 U.S.C. 1395f(a)(7)(D)(i)) is 

7 amended by inserting ‘‘(including through use of tele8 health, notwithstanding the requirements in section 

9 1834(m)(4)(C))’’ after ‘‘face-to-face encounter’’. 

10 (b) GAO REPORT.—Not later than 3 years after the 

11 date of enactment of this Act, the Comptroller General 

12 of the United States shall submit a report to Congress 

13 evaluating the impact of the amendment made by sub14 section (a) on— 

15 (1) the number and percentage of beneficiaries 

16 recertified for the Medicare hospice benefit at 180 

17 days and for subsequent benefit periods; 

18 (2) the appropriateness for hospice care of the 

19 patients recertified through the use of telehealth; 

20 and 

21 (3) any other factors determined appropriate by 

22 the Comptroller General. 


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1 SEC. 440. CLARIFICATION FOR FRAUD AND ABUSE LAWS 

2 REGARDING TECHNOLOGIES PROVIDED TO 

3 BENEFICIARIES. 

4 Section 1128A(i)(6) of the Social Security Act (42 

5 U.S.C. 1320a–7a(i)(6)) is amended— 

6 (1) in subparagraph (I), by striking ‘‘; or’’ and 

7 inserting a semicolon; 

8 (2) in subparagraph (J), by striking the period 

9 at the end and inserting ‘‘; or’’; and 

10 (3) by adding at the end the following new sub11 paragraph: 

12 ‘‘(K) the provision of technologies (as de13 fined by the Secretary) on or after the date of 

14 the enactment of this subparagraph, by a pro15 vider of services or supplier (as such terms are 

16 defined for purposes of title XVIII) directly to 

17 an individual who is entitled to benefits under 

18 part A of title XVIII, enrolled under part B of 

19 such title, or both, for the purpose of furnishing 

20 telehealth services, remote patient monitoring 

21 services, or other services furnished through the 

22 use of technology (as defined by the Secretary), 

23 if— 

24 ‘‘(i) the technologies are not offered 

25 as part of any advertisement or solicita26 tion; and 


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1 ‘‘(ii) the provision of the technologies 

2 meets any other requirements set forth in 

3 regulations promulgated by the Sec4 retary.’’. 

5 SEC. 441. STUDY AND REPORT ON INCREASING ACCESS TO 

6 TELEHEALTH SERVICES IN THE HOME. 

7 (a) MEDPAC STUDY.—The Medicare Payment Advi8 sory Commission (in this section referred to as the ‘‘Com9 mission’’) shall conduct a study on increasing access under 

10 the Medicare program under title XVIII of the Social Se11 curity Act (42 U.S.C. 1395 et seq.) to telehealth services 

12 in the home. Such study shall include an analysis of the 

13 following: 

14 (1) How different payers allow the home to be 

15 an originating site for telehealth services. 

16 (2) Particular types of telehealth services or 

17 subgroups of beneficiaries with respect to which al18 lowing the home to be an originating site under the 

19 Medicare program would be suitable. 

20 (b) REPORT.—Not later than 24 months after the 

21 date of the enactment of this Act, the Commission shall 

22 submit to Congress a report containing the results of the 

23 study conducted under subsection (a), together with rec24 ommendations for such legislation and administrative ac25 tion as the Commission determines appropriate. 


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1 SEC. 442. ANALYSIS OF TELEHEALTH WAIVERS IN ALTER2 NATIVE PAYMENT MODELS. 

3 The second sentence of section 1115A(g) of the So4 cial Security Act (42 U.S.C. 1315a(g)) is amended by in5 serting ‘‘an analysis of waivers under section (d)(1) re6 lated to telehealth and the impact on quality and spending 

7 under the applicable titles of such waivers,’’ after ‘‘sub8 section (c),’’. 

9 SEC. 443. MODEL TO ALLOW ADDITIONAL HEALTH PROFES10 SIONALS TO FURNISH TELEHEALTH SERV11 ICES. 

12 Section 1115A(b)(2)(B) of the Social Security Act 

13 (42 U.S.C. 1315a(b)(2)(B)) is amended by adding at the 

14 end the following new clause: 

15 ‘‘(xxviii) Allowing health professionals 

16 who are not otherwise eligible under sec17 tion 1834(m) to furnish telehealth services 

18 to furnish such services.’’. 

19 SEC. 444. TESTING OF MODELS TO EXAMINE THE USE OF 

20 TELEHEALTH UNDER THE MEDICARE PRO21 GRAM. 

22 Section 1115A(b)(2) of the Social Security Act (42 

23 U.S.C. 1315a(b)(2)) is amended by adding at the end the 

24 following new subparagraph: 

25 ‘‘(D) TESTING MODELS TO EXAMINE USE

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1 retary shall consider testing under this sub2 section models to examine the use of telehealth 

3 under title XVIII.’’. 

Æ 


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