I 

111TH CONGRESS 

1ST SESSION H. R. 2502 

To amend title XI of the Social Security Act to provide for the conduct 

of comparative effectiveness research and to amend the Internal Revenue 

Code of 1986 to establish a Comparative Effectiveness Research Trust 

Fund, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 19, 2009 

Mr. SCHRADER (for himself, Mr. MCMAHON, Mr. CONNOLLY of Virginia, Mr. 

KIND, Mrs. HALVORSON, Mr. CROWLEY, Ms. SCHWARTZ, Mr. HIMES, 

Mr. ALTMIRE, Ms. BEAN, Mrs. TAUSCHER, and Mrs. DAVIS of California) introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committee on Energy and 

Commerce, for a period to be subsequently determined by the Speaker, 

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

A BILL 

To amend title XI of the Social Security Act to provide 

for the conduct of comparative effectiveness research and 

to amend the Internal Revenue Code of 1986 to establish 

a Comparative Effectiveness Research Trust Fund, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Comparative Effective3 ness Research Act of 2009’’. 

4 SEC. 2. COMPARATIVE EFFECTIVENESS RESEARCH. 

5 (a) IN GENERAL.—Title XI of the Social Security Act 

6 (42 U.S.C. 1301 et seq.) is amended by adding at the end 

7 the following new part: 

8 ‘‘PART D—COMPARATIVE EFFECTIVENESS RESEARCH

9 ‘‘COMPARATIVE EFFECTIVENESS RESEARCH

10 ‘‘SEC. 1181. (a) DEFINITIONS.—In this section: 

11 ‘‘(1) BOARD.—The term ‘Board’ means the 

12 Board of Governors established under subsection (f). 

13 ‘‘(2) COMPARATIVE CLINICAL EFFECTIVENESS

14 RESEARCH.— 

15 ‘‘(A) IN GENERAL.—The term ‘compara16 tive clinical effectiveness research’ means re17 search evaluating and comparing the clinical ef18 fectiveness, risks, and benefits of 2 or more 

19 medical treatments, services, and items de20 scribed in subparagraph (B). 

21 ‘‘(B) MEDICAL TREATMENTS, SERVICES, 

22 AND ITEMS DESCRIBED.—The medical treat23 ments, services, and items described in this sub24 paragraph are health care interventions, proto25 cols for treatment, procedures, medical devices, 

26 diagnostic tools, pharmaceuticals (including 


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1 drugs and biologicals), and any other processes 

2 or items being used in the treatment and diag3 nosis of, or prevention of illness or injury in, 

4 patients. 

5 ‘‘(3) COMPARATIVE EFFECTIVENESS RE6 SEARCH.—The term ‘comparative effectiveness re7 search’ means research evaluating and comparing 

8 the implications and outcomes of 2 or more health 

9 care strategies to address a particular medical condi10 tion. 

11 ‘‘(4) CONFLICTS OF INTEREST.—The term 

12 ‘conflicts of interest’ means associations, including 

13 financial and personal, that may be reasonably as14 sumed to have the potential to bias an individual’s 

15 decisions in matters related to the Institute or the 

16 conduct of activities under this section. 

17 ‘‘(5) INSTITUTE.—The term ‘Institute’ means 

18 the ‘Health Care Comparative Effectiveness Re19 search Institute’ established under subsection (b)(1). 

20 ‘‘(b) HEALTH CARE COMPARATIVE EFFECTIVENESS

21 RESEARCH INSTITUTE.— 

22 ‘‘(1) ESTABLISHMENT.—There is authorized to 

23 be established a nonprofit corporation, to be known 

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1 search Institute’’ which is neither an agency nor es2 tablishment of the United States Government. 

3 ‘‘(2) APPLICATION OF PROVISIONS.—The Insti4 tute shall be subject to the provisions of this section, 

5 and, to the extent consistent with this section, to the 

6 District of Columbia Nonprofit Corporation Act. 

7 ‘‘(3) FUNDING OF COMPARATIVE EFFECTIVE8 NESS RESEARCH.—For fiscal year 2009 and each 

9 subsequent fiscal year, amounts in the Comparative 

10 Effectiveness Research Trust Fund (referred to in 

11 this section as the ‘CERTF’) under section 9511 of 

12 the Internal Revenue Code of 1986 shall be avail13 able, without further appropriation, to the Institute 

14 to carry out this section. 

15 ‘‘(c) PURPOSE.—The purpose of the Institute is to 

16 improve health care delivered to individuals in the United 

17 States by advancing the quality and thoroughness of evi18 dence concerning the manner in which diseases, disorders, 

19 and other health conditions can effectively and appro20 priately be prevented, diagnosed, treated, and managed 

21 clinically through research and evidence synthesis, and the 

22 dissemination of research findings with respect to the rel23 ative outcomes, effectiveness, and appropriateness of the 

24 medical treatments, services, and items described in sub25 section (a)(2)(B). 


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1 ‘‘(d) DUTIES.— 

2 ‘‘(1) IDENTIFYING RESEARCH PRIORITIES AND

3 ESTABLISHING RESEARCH PROJECT AGENDA.— 

4 ‘‘(A) IDENTIFYING RESEARCH PRIOR5 ITIES.—The Institute shall identify national 

6 priorities for comparative clinical effectiveness 

7 research, taking into account factors, includ8 ing— 

9 ‘‘(i) disease incidence, prevalence, and 

10 burden in the United States; 

11 ‘‘(ii) evidence gaps in terms of clinical 

12 outcomes; 

13 ‘‘(iii) practice variations, including 

14 variations in delivery and outcomes by ge15 ography, treatment site, provider type, and 

16 patient subgroup; 

17 ‘‘(iv) the potential for new evidence 

18 concerning certain categories of health care 

19 services or treatments to improve patient 

20 health and well-being, and the quality of 

21 care; and 

22 ‘‘(v) the effect or potential for an ef23 fect on health expenditures associated with 

24 a health condition or the use of a par25 ticular medical treatment, service, or item. 


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1 ‘‘(B) ESTABLISHING RESEARCH PROJECT

2 AGENDA.— 

3 ‘‘(i) IN GENERAL.—The Institute shall 

4 establish and update a research project 

5 agenda to address the priorities identified 

6 under subparagraph (A), taking into con7 sideration the types of research that might 

8 address each priority and the relative value 

9 (determined based on the cost of con10 ducting such research compared to the po11 tential usefulness of the information pro12 duced by such research) associated with 

13 such different types of research, and such 

14 other factors as the Institute determines 

15 appropriate. 

16 ‘‘(ii) CONSIDERATION OF NEED TO

17 CONDUCT A SYSTEMATIC REVIEW.—In es18 tablishing and updating the research 

19 project agenda under clause (i), the Insti20 tute shall consider the need to conduct a 

21 systematic review of existing research (in22 cluding research on comparative effective23 ness conducted with funds provided under 

24 division A of Public Law 111–5) before 


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1 providing for the conduct of new research 

2 under paragraph (2)(A). 

3 ‘‘(2) CARRYING OUT RESEARCH PROJECT AGEN4 DA.— 

5 ‘‘(A) COMPARATIVE CLINICAL EFFECTIVE6 NESS RESEARCH.—In carrying out the research 

7 project agenda established under paragraph 

8 (1)(B), the Institute shall provide for the con9 duct of appropriate research and the synthesis 

10 of evidence, in accordance with the methodo11 logical standards adopted under paragraph (9), 

12 using methods, including the following: 

13 ‘‘(i) Systematic reviews and assess14 ments of existing research and evidence. 

15 ‘‘(ii) Clinical research, such as ran16 domized controlled trials and observational 

17 studies. 

18 ‘‘(iii) Any other methodologies rec19 ommended by the methodology committee 

20 established under paragraph (6) that are 

21 adopted by the Board under paragraph 

22 (9). 

23 ‘‘(B)(i) CONTRACTS WITH FEDERAL AGEN24 CIES AND INSTRUMENTALITIES.—The Institute 

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1 strumentalities of the Federal Government that 

2 have experience in conducting comparative clin3 ical effectiveness research, such as the Agency 

4 for Healthcare Research and Quality, for the 

5 management and conduct of research in accord6 ance with the research project agenda estab7 lished under paragraph (1)(B), to the extent 

8 that such contracts are authorized under the 

9 governing statutes of such agencies and instru10 mentalities. 

11 ‘‘(ii) CONTRACTS WITH OTHER ENTI12 TIES.—The Institute may enter into contracts 

13 with appropriate private sector research or 

14 study-conducting entities for the conduct of re15 search described in clause (i). 

16 ‘‘(iii) CONDITIONS FOR CONTRACTS.—A 

17 contract entered into under this subparagraph 

18 shall require that the agency, instrumentality, 

19 or other entity— 

20 ‘‘(I) abide by the transparency and 

21 conflicts of interest requirements that 

22 apply to the Institute with respect to the 

23 research managed or conducted under such 

24 contract; 


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1 ‘‘(II) comply with the methodological 

2 standards adopted under paragraph (9) 

3 with respect to such research; and 

4 ‘‘(III) take into consideration public 

5 comments on the study design that are 

6 transmitted by the Institute to the agency, 

7 instrumentality, or other entity under sub8 section (i)(1) during the finalization of the 

9 study design and transmit responses to 

10 such comments to the Institute, which will 

11 publish such comments, responses, and fi12 nalized study design in accordance with 

13 paragraph (7)(C) prior to the conduct of 

14 such research. 

15 ‘‘(iv) COVERAGE OF COPAYMENTS OR COIN16 SURANCE.—A contract entered into under this 

17 subparagraph may allow for the coverage of co18 payments or co-insurance, or allow for other ap19 propriate measures, to the extent that such cov20 erage or other measures are necessary to pre21 serve the validity of a research project, such as 

22 in the case where the research project must be 

23 blinded. 

24 ‘‘(C) REVIEW AND UPDATE OF EVI25 DENCE.—The Institute shall review and update 


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1 evidence on a periodic basis, in order to take 

2 into account new research and evolving evidence 

3 as they become available, as appropriate. 

4 ‘‘(D) TAKING INTO ACCOUNT POTENTIAL

5 DIFFERENCES.—Research shall— 

6 ‘‘(i) be designed, as appropriate, to 

7 take into account the potential for dif8 ferences in the effectiveness of health care 

9 treatments, services, and items as used 

10 with various subpopulations, such as racial 

11 and ethnic minorities, women, different age 

12 groups, and individuals with different 

13 comorbidities; and 

14 ‘‘(ii) seek to include members of such 

15 subpopulations as subjects in the research 

16 as feasible and appropriate. 

17 ‘‘(3) DATA COLLECTION.— 

18 ‘‘(A) IN GENERAL.—The Secretary shall, 

19 with appropriate safeguards for privacy, make 

20 available to the Institute such data collected by 

21 the Centers for Medicare & Medicaid Services 

22 under the programs under titles XVIII, XIX, 

23 and XXI as the Institute may require to carry 

24 out this section. The Institute may also request 


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1 and, if such request is granted, obtain data 

2 from Federal, State, or private entities. 

3 ‘‘(B) USE OF DATA.—The Institute shall 

4 only use data provided to the Institute under 

5 subparagraph (A) in accordance with laws and 

6 regulations governing the release and use of 

7 such data, including applicable confidentiality 

8 and privacy standards. 

9 ‘‘(4) APPOINTING ADVISORY PANELS.— 

10 ‘‘(A) IN GENERAL.—The Institute may ap11 point permanent or ad hoc advisory panels as 

12 determined appropriate by the Institute to as13 sist in the establishment and carrying out of 

14 the research project agenda under paragraphs 

15 (1) and (2), respectively. Panels may advise or 

16 guide the Institute in matters such as identi17 fying gaps in and updating medical evidence 

18 and identifying research priorities and potential 

19 study designs in order to ensure that the infor20 mation produced from such research is clinically 

21 relevant to decisions made by clinicians and pa22 tients at the point of care and may provide ad23 vice throughout the conduct of research. 

24 ‘‘(B) COMPOSITION.—An advisory panel 

25 appointed under subparagraph (A) shall include 


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1 representatives of clinicians and patients and 

2 may include experts in scientific and health 

3 services research, health services delivery, and 

4 the manufacture of health items who have expe5 rience in the relevant topic, project, or category 

6 for which the panel is established. 

7 ‘‘(5) ESTABLISHING METHODOLOGY COM8 MITTEE.— 

9 ‘‘(A) IN GENERAL.—The Institute shall es10 tablish a standing methodology committee to 

11 carry out the functions described in subpara12 graph (C). 

13 ‘‘(B) APPOINTMENT AND COMPOSITION.— 

14 Members shall be appointed to the methodology 

15 committee established under subparagraph (A) 

16 by the Comptroller General of the United 

17 States. Members appointed to the methodology 

18 committee shall be experts in their scientific 

19 field, such as health services research, clinical 

20 research, comparative effectiveness research, 

21 biostatistics, and research methodologies. 

22 Stakeholders with such expertise may be ap23 pointed to the methodology committee. 

24 ‘‘(C) FUNCTIONS.—Subject to subpara25 graph (D), the methodology committee shall 


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1 work to develop and improve the science of 

2 comparative effectiveness research by under3 taking the following activities: 

4 ‘‘(i) Not later than 1 year after the 

5 date on which the members of the method6 ology committee are appointed under sub7 paragraph (B), developing and periodically 

8 updating methodological standards regard9 ing outcomes measures, risk adjustment, 

10 statistical protocols, evaluation of evidence, 

11 conduct of research, and other aspects of 

12 research and assessment to be used when 

13 conducting research on comparative clinical 

14 effectiveness (and procedures for the use of 

15 such standards) in order to help ensure ac16 curate and effective comparisons. Such 

17 standards shall also include methods by 

18 which new information, data, or advances 

19 in technology are considered and incor20 porated into ongoing research projects by 

21 the Institute, as appropriate. In developing 

22 and updating methodological standards 

23 under this clause, the methodology com24 mittee shall ensure that such standards are 

25 scientifically based. 


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1 ‘‘(ii) Not later than 2 years after such 

2 date, examining the following: 

3 ‘‘(I) Methods by which various 

4 aspects of the health care delivery sys5 tem (such as benefit design and per6 formance, and health services organi7 zation, management, and delivery) 

8 could be assessed and compared for 

9 their relative effectiveness, benefits, 

10 risks, advantages, and disadvantages 

11 in a scientifically valid and standard12 ized way. 

13 ‘‘(II) Methods by which cost-ef14 fectiveness and value could be as15 sessed in a scientifically valid and 

16 standardized way. 

17 ‘‘(D) CONSULTATION AND CONDUCT OF

18 EXAMINATIONS.— 

19 ‘‘(i) IN GENERAL.—Subject to clause 

20 (iii), in undertaking the activities described 

21 in subparagraph (C), the methodology 

22 committee shall— 

23 ‘‘(I) consult or contract with 1 or 

24 more of the entities described in 

25 clause (ii); and 


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1 ‘‘(II) consult with stakeholders 

2 and other entities knowledgeable in 

3 relevant fields, as appropriate. 

4 ‘‘(ii) ENTITIES DESCRIBED.—The fol5 lowing entities are described in this clause: 

6 ‘‘(I) The Institute of Medicine of 

7 the National Academies. 

8 ‘‘(II) The Agency for Healthcare 

9 Research and Quality. 

10 ‘‘(III) The National Institutes of 

11 Health. 

12 ‘‘(iii) CONDUCT OF EXAMINATIONS.— 

13 The methodology committee shall contract 

14 with the Institute of Medicine of the Na15 tional Academies for the conduct of the ex16 aminations described in subclauses (I) and 

17 (II) of subparagraph (C)(ii). 

18 ‘‘(E) REPORTS.—The methodology com19 mittee shall submit reports to the Board on the 

20 committee’s performance of the functions de21 scribed in subparagraph (C). Reports submitted 

22 under the preceding sentence with respect to 

23 the functions described in clause (i) of such 

24 subparagraph shall contain recommendations— 


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1 ‘‘(i) for the Institute to adopt meth2 odological standards developed and up3 dated by the methodology committee under 

4 such subparagraph; and 

5 ‘‘(ii) for such other action as the 

6 methodology committee determines is nec7 essary to comply with such methodological 

8 standards. 

9 ‘‘(6) PROVIDING FOR A PEER-REVIEW PROC10 ESS.— 

11 ‘‘(A) IN GENERAL.—The Institute shall en12 sure that there is a process for peer review of 

13 the research conducted under this section. 

14 Under such process— 

15 ‘‘(i) evidence from research conducted 

16 under this section shall be reviewed to as17 sess scientific integrity and adherence to 

18 methodological standards adopted under 

19 paragraph (8); and 

20 ‘‘(ii) a list of the names of individuals 

21 contributing to any peer-review process 

22 during the preceding year or years shall be 

23 made public and included in annual reports 

24 in accordance with paragraph (10)(D). 


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1 ‘‘(B) COMPOSITION.—Such peer-review 

2 process shall have been designed in a manner so 

3 as to avoid bias and conflicts of interest on the 

4 part of the reviewers and shall be composed of 

5 experts in the scientific field relevant to the re6 search under review. 

7 ‘‘(C) USE OF EXISTING PROCESSES.—In 

8 the case where the Institute enters into a con9 tract or other agreement with another entity for 

10 the conduct or management of research under 

11 this section, the Institute may utilize the peer12 review process of such entity if such process 

13 meets the requirements under subparagraphs 

14 (A) and (B). 

15 ‘‘(7) DISSEMINATION OF RESEARCH FIND16 INGS.— 

17 ‘‘(A) IN GENERAL.—The Institute shall 

18 disseminate research findings to clinicians, pa19 tients, and the general public in accordance 

20 with the dissemination protocols and strategies 

21 adopted under paragraph (8). Research findings 

22 disseminated— 

23 ‘‘(i) shall convey findings of research 

24 so that they are comprehensible and useful 


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1 to patients and providers in making health 

2 care decisions; 

3 ‘‘(ii) shall discuss findings and other 

4 considerations specific to certain sub5 populations, risk factors, and 

6 comorbidities, as appropriate; 

7 ‘‘(iii) shall include considerations such 

8 as limitations of research and what further 

9 research may be needed, as appropriate; 

10 ‘‘(iv) shall not include practice guide11 lines or policy recommendations; and 

12 ‘‘(v) shall not include any data the 

13 dissemination of which would violate the 

14 privacy of research participants or violate 

15 any confidentiality agreements made with 

16 respect to the use of data under this sec17 tion. 

18 ‘‘(B) DISSEMINATION PROTOCOLS AND

19 STRATEGIES.—The Institute shall develop pro20 tocols and strategies for the appropriate dis21 semination of research findings in order to en22 sure effective communication of such findings 

23 and the use and incorporation of such findings 

24 into relevant activities for the purpose of in25 forming higher quality and more effective and 


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1 efficient decisions regarding medical treat2 ments, services, and items. In developing and 

3 adopting such protocols and strategies, the In4 stitute shall consult with stakeholders con5 cerning the types of dissemination that will be 

6 most useful to the end users of the information 

7 and may provide for the utilization of multiple 

8 formats for conveying findings to different audi9 ences. 

10 ‘‘(C) PUBLIC AVAILABILITY.—The Insti11 tute shall make available to the public and dis12 close through the official public Internet website 

13 of the Institute, and through other forums and 

14 media the Institute determines appropriate, the 

15 following: 

16 ‘‘(i) The process and methods for the 

17 conduct of research under this section, in18 cluding— 

19 ‘‘(I) the identity of the entity 

20 conducting such research; 

21 ‘‘(II) any links the entity has to 

22 industry (including such links that are 

23 not directly tied to the particular re24 search being conducted under this sec25 tion); 


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1 ‘‘(III) draft study designs (in2 cluding research questions and the fi3 nalized study design, together with 

4 public comments on such study design 

5 and responses to such comments); 

6 ‘‘(IV) research protocols (includ7 ing measures taken, methods of re8 search, methods of analysis, research 

9 results, and such other information as 

10 the Institute determines appropriate); 

11 ‘‘(V) the identity of investigators 

12 conducting such research and any 

13 conflicts of interest of such investiga14 tors; and 

15 ‘‘(VI) any progress reports the 

16 Institute determines appropriate. 

17 ‘‘(ii) Public comments submitted dur18 ing each of the public comment periods 

19 under subsection (i)(1). 

20 ‘‘(iii) Bylaws, processes, and pro21 ceedings of the Institute, to the extent 

22 practicable and as the Institute determines 

23 appropriate. 

24 ‘‘(iv) Not later than 90 days after re25 ceipt by the Institute of a relevant report 


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1 or research findings, appropriate informa2 tion contained in such report or findings. 

3 ‘‘(v) All reports, findings, results, and 

4 studies conducted by or through the Insti5 tute. 

6 The Institute shall obtain and incorporate pub7 lic feedback through media (such as an Internet 

8 website) on the information disclosed. 

9 ‘‘(D) FUNDING.—At least 5 percent of the 

10 funds made available each fiscal year under the 

11 CERTF shall be expended on activities under 

12 this paragraph. 

13 ‘‘(E) DEFINITION OF RESEARCH FIND14 INGS.—In this paragraph, the term ‘research 

15 findings’ means the results of a study, ap16 praisal, or assessment. 

17 ‘‘(8) ADOPTION.—Subject to subsection (i)(1), 

18 the Institute shall adopt the national priorities iden19 tified under paragraph (1)(A), the research project 

20 agenda established under paragraph (1)(B), the 

21 methodological standards developed and updated by 

22 the methodology committee under paragraph 

23 (5)(C)(i), any peer-review process provided under 

24 paragraph (6), and dissemination protocols and 

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1 jority vote. In the case where the Institute does not 

2 adopt such national priorities, research project agen3 da, methodological standards, peer-review process, or 

4 dissemination protocols and strategies in accordance 

5 with the preceding sentence, the national priorities, 

6 research project agenda, methodological standards, 

7 peer-review process, or dissemination protocols and 

8 strategies shall be referred to the appropriate staff 

9 or entity within the Institute (or, in the case of the 

10 methodological standards, the methodology com11 mittee) for further review. 

12 ‘‘(9) COORDINATION OF RESEARCH AND RE13 SOURCES AND BUILDING CAPACITY FOR RE14 SEARCH.— 

15 ‘‘(A) COORDINATION OF RESEARCH AND

16 RESOURCES.—The Institute shall coordinate re17 search conducted, commissioned, or otherwise 

18 funded under this section with comparative clin19 ical effectiveness and other relevant research 

20 and related efforts conducted by public and pri21 vate agencies and organizations in order to en22 sure the most efficient use of the Institute’s re23 sources and that research is not duplicated un24 necessarily. 


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1 ‘‘(B) INCLUSION IN ANNUAL REPORTS.— 

2 The Institute shall report on any coordination 

3 and capacity building conducted under this 

4 paragraph in annual reports in accordance with 

5 paragraph (10)(E). 

6 ‘‘(10) ANNUAL REPORTS.—The Institute shall 

7 submit an annual report to Congress and the Presi8 dent, and shall make the annual report available to 

9 the public. Such report shall contain— 

10 ‘‘(A) a description of the activities con11 ducted under this section during the preceding 

12 year, including the use of amounts appropriated 

13 or credited to the CERTF under section 

14 9511(b) of the Internal Revenue Code of 1986 

15 to carry out this section, research projects com16 pleted and underway, and a summary of the 

17 findings of such projects; 

18 ‘‘(B) the research project agenda and 

19 budget of the Institute for the following year; 

20 ‘‘(C) a description of research priorities 

21 identified under paragraph (1)(A), dissemina22 tion protocols and strategies developed by the 

23 Institute under paragraph (7)(B), and meth24 odological standards developed and updated by 

25 the methodology committee under paragraph 


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1 (5)(C)(i) that are adopted under paragraph (8) 

2 during the preceding year; 

3 ‘‘(D) the names of individuals contributing 

4 to any peer-review process provided under para5 graph (6) during the preceding year or years, in 

6 a manner such that those individuals cannot be 

7 identified with a particular research project; 

8 ‘‘(E) a description of efforts by the Insti9 tute under paragraph (9) to— 

10 ‘‘(i) coordinate the research con11 ducted, commissioned, or otherwise funded 

12 under this section and the resources of the 

13 Institute with research and related efforts 

14 conducted by other private and public enti15 ties; and 

16 ‘‘(ii) build capacity for comparative 

17 clinical effectiveness research and other 

18 relevant research and related efforts 

19 through appropriate activities; and 

20 ‘‘(F) any other relevant information (in21 cluding information on the membership of the 

22 Board, advisory panels appointed under para23 graph (4), the methodology committee estab24 lished under paragraph (6), and the executive 

25 staff of the Institute, any conflicts of interest 


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1 with respect to the members of such Board, ad2 visory panels, and methodology committee, or 

3 with respect to any individuals selected for em4 ployment as executive staff of the Institute, and 

5 any bylaws adopted by the Board during the 

6 preceding year). 

7 ‘‘(11) CONFLICTS OF INTEREST.—The Institute 

8 shall— 

9 ‘‘(A) in appointing members to an advisory 

10 panel under subsection (d)(4) and the method11 ology committee under subsection (d)(5), and in 

12 selecting individuals to contribute to any peer13 review process under subsection (d)(6) and for 

14 employment as executive staff of the Institute, 

15 take into consideration any conflicts of interest 

16 of potential appointees, participants, and staff; 

17 and 

18 ‘‘(B) include a description of any such con19 flicts of interest and conflicts of interest of 

20 Board members in the annual report under sub21 section (d)(10), except that, in the case of indi22 viduals contributing to any such peer review 

23 process, such description shall be in a manner 

24 such that those individuals cannot be identified 

25 with a particular research project. 


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1 ‘‘(e) ADMINISTRATION.— 

2 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

3 the Board shall carry out the duties of the Institute. 

4 ‘‘(2) NONDELEGABLE DUTIES.—The activities 

5 described in subsections (b)(3)(D), (d)(1), and 

6 (d)(8) are nondelegable. 

7 ‘‘(f) BOARD OF GOVERNORS.— 

8 ‘‘(1) IN GENERAL.—The Institute shall have a 

9 Board of Governors, which shall consist of the fol10 lowing members: 

11 ‘‘(A) The Secretary of Health and Human 

12 Services (or the Secretary’s designee). 

13 ‘‘(B) The Director of the Agency for 

14 Healthcare Research and Quality (or the Direc15 tor’s designee). 

16 ‘‘(C) The Director of the National Insti17 tutes of Health (or the Director’s designee). 

18 ‘‘(D) 18 members appointed by the Comp19 troller General of the United States not later 

20 than 6 months after the date of enactment of 

21 this section, as follows: 

22 ‘‘(i) 3 members representing patients 

23 and health care consumers. 

24 ‘‘(ii) 3 members representing prac25 ticing physicians, including surgeons. 


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1 ‘‘(iii) 3 members representing agen2 cies that administer public programs, as 

3 follows: 

4 ‘‘(I) 1 member representing the 

5 Centers for Medicare & Medicaid 

6 Services who has experience in admin7 istering the program under title 

8 XVIII. 

9 ‘‘(II) 1 member representing 

10 agencies that administer State health 

11 programs (who may represent the 

12 Centers for Medicare & Medicaid 

13 Services and have experience in ad14 ministering the program under title 

15 XIX or the program under title XXI 

16 or be a governor of a State). 

17 ‘‘(III) 1 member representing 

18 agencies that administer other Fed19 eral health programs (such as a 

20 health program of the Department of 

21 Defense under chapter 55 of title 10, 

22 United States Code, the Federal em23 ployees health benefits program under 

24 chapter 89 of title 5 of such Code, a 

25 health program of the Department of 


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1 Veterans Affairs under chapter 17 of 

2 title 38 of such Code, or a medical 

3 care program of the Indian Health 

4 Service or of a tribal organization). 

5 ‘‘(iv) 3 members representing private 

6 payers, of whom at least 1 member shall 

7 represent health insurance issuers and at 

8 least 1 member shall represent employers 

9 who self-insure employee benefits. 

10 ‘‘(v) 3 members representing pharma11 ceutical, device, and technology manufac12 turers or developers. 

13 ‘‘(vi) 1 member representing nonprofit 

14 organizations involved in health services re15 search. 

16 ‘‘(vii) 1 member representing organi17 zations that focus on quality measurement 

18 and improvement or decision support. 

19 ‘‘(viii) 1 member representing inde20 pendent health services researchers. 

21 ‘‘(2) QUALIFICATIONS.— 

22 ‘‘(A) DIVERSE REPRESENTATION OF PER23 SPECTIVES.—The Board shall represent a broad 

24 range of perspectives and collectively have sci25 entific expertise in clinical practice and clinical 


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1 health sciences research, including epidemi2 ology, decisions sciences, health economics, and 

3 statistics. 

4 ‘‘(B) CONFLICTS OF INTEREST.— 

5 ‘‘(i) IN GENERAL.—In appointing 

6 members of the Board under paragraph 

7 (1)(D), the Comptroller General of the 

8 United States shall take into consideration 

9 any conflicts of interest of potential ap10 pointees. Any conflicts of interest of mem11 bers appointed to the Board under para12 graph (1) shall be disclosed in accordance 

13 with subsection (d)(7). 

14 ‘‘(ii) RECUSAL.—A member of the 

15 Board shall be recused from participating 

16 with respect to a particular research 

17 project or other matter considered by the 

18 Board in carrying out its research project 

19 agenda under subsection (d)(2) in the case 

20 where the member (or an immediate family 

21 member of such member) has a financial 

22 or personal interest directly related to the 

23 research project or the matter that could 

24 affect or be affected by such participation. 

25 ‘‘(3) TERMS.— 


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1 ‘‘(A) IN GENERAL.—A member of the 

2 Board appointed under paragraph (1)(D) shall 

3 be appointed for a term of 6 years, except with 

4 respect to the members first appointed under 

5 such paragraph— 

6 ‘‘(i) 6 shall be appointed for a term of 

7 6 years; 

8 ‘‘(ii) 6 shall be appointed for a term 

9 of 4 years; and 

10 ‘‘(iii) 6 shall be appointed for a term 

11 of 2 years. 

12 ‘‘(B) LIMITATION.—No individual shall be 

13 appointed to the Board under paragraph (1)(D) 

14 for more than 2 terms. 

15 ‘‘(C) EXPIRATION OF TERM.—Any member 

16 of the Board whose term has expired may serve 

17 until such member’s successor has taken office, 

18 or until the end of the calendar year in which 

19 such member’s term has expired, whichever is 

20 earlier. 

21 ‘‘(D) VACANCIES.— 

22 ‘‘(i) IN GENERAL.—Any member ap23 pointed to fill a vacancy prior to the expi24 ration of the term for which such memVerDate Nov 24 2008 04:10 May 21, 2009 Jkt 079200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H2502.IH H2502

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1 ber’s predecessor was appointed shall be 

2 appointed for the remainder of such term. 

3 ‘‘(ii) VACANCIES NOT TO AFFECT

4 POWER OF BOARD.—A vacancy on the 

5 Board shall not affect its powers, but shall 

6 be filled in the same manner as the origi7 nal appointment was made. 

8 ‘‘(4) CHAIRPERSON AND VICE-CHAIRPERSON.— 

9 ‘‘(A) IN GENERAL.—From among the 

10 members of the Board appointed under para11 graph (1)(D), the Comptroller General of the 

12 United States shall designate a member who is 

13 a physician with national research credentials 

14 as Chairperson of the Board and another mem15 ber as Vice-Chairperson of the Board. 

16 ‘‘(B) TERM.—The members so designated 

17 shall serve as Chairperson and Vice-Chair18 person of the Board for a period of 3 years. 

19 ‘‘(5) COMPENSATION.— 

20 ‘‘(A) IN GENERAL.—A member of the 

21 Board shall be entitled to compensation at the 

22 per diem equivalent of the rate provided for 

23 level IV of the Executive Schedule under section 

24 5315 of title 5, United States Code. 


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1 ‘‘(B) TRAVEL EXPENSES.—While away 

2 from home or regular place of business in the 

3 performance of duties for the Board, each mem4 ber of the Board may receive reasonable travel, 

5 subsistence, and other necessary expenses. 

6 ‘‘(6) DIRECTOR AND STAFF; EXPERTS AND

7 CONSULTANTS.—The Board may— 

8 ‘‘(A) employ and fix the compensation of 

9 an executive director and such other personnel 

10 as may be necessary to carry out the duties of 

11 the Institute; 

12 ‘‘(B) seek such assistance and support as 

13 may be required in the performance of the du14 ties of the Institute from appropriate depart15 ments and agencies of the Federal Government; 

16 ‘‘(C) enter into contracts or make other ar17 rangements and make such payments as may 

18 be necessary for performance of the duties of 

19 the Institute; 

20 ‘‘(D) provide travel, subsistence, and per 

21 diem compensation for individuals performing 

22 the duties of the Institute, including members 

23 of any advisory panel appointed under sub24 section (d)(4), members of the methodology 

25 committee established under subsection (d)(5), 


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1 and individuals selected to contribute to any 

2 peer-review process under subsection (d)(6); 

3 and 

4 ‘‘(E) prescribe such rules, regulations, and 

5 bylaws as the Board determines necessary with 

6 respect to the internal organization and oper7 ation of the Institute. 

8 ‘‘(7) MEETINGS AND HEARINGS.—The Board 

9 shall meet and hold hearings at the call of the 

10 Chairperson or a majority of its members. In the 

11 case where the Board is meeting on matters not re12 lated to personnel, Board meetings shall be open to 

13 the public and advertised. 

14 ‘‘(8) QUORUM.—A majority of the members of 

15 the Board shall constitute a quorum for purposes of 

16 conducting the duties of the Institute, but a lesser 

17 number of members may meet and hold hearings. 

18 ‘‘(g) FINANCIAL OVERSIGHT.— 

19 ‘‘(1) CONTRACT FOR AUDIT.—The Institute 

20 shall provide for the conduct of financial audits of 

21 the Institute on an annual basis by a private entity 

22 with expertise in conducting financial audits. 

23 ‘‘(2) REVIEW OF AUDIT AND REPORT TO CON24 GRESS.—The Comptroller General of the United 

25 States shall— 


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1 ‘‘(A) review the results of the audits con2 ducted under paragraph (1); and 

3 ‘‘(B) submit a report to Congress con4 taining the results of such audits and review. 

5 ‘‘(h) GOVERNMENTAL OVERSIGHT.— 

6 ‘‘(1) REVIEW AND REPORTS.— 

7 ‘‘(A) IN GENERAL.—The Comptroller Gen8 eral of the United States shall review the fol9 lowing: 

10 ‘‘(i) Processes established by the In11 stitute, including those with respect to the 

12 identification of research priorities under 

13 subsection (d)(1)(A) and the conduct of re14 search projects under this section. Such re15 view shall determine whether information 

16 produced by such research projects— 

17 ‘‘(I) is objective and credible; 

18 ‘‘(II) is produced in a manner 

19 consistent with the requirements 

20 under this section; and 

21 ‘‘(III) is developed through a 

22 transparent process. 

23 ‘‘(ii) The overall effect of the Institute 

24 and the effectiveness of activities conVerDate Nov 24 2008 04:10 May 21, 2009 Jkt 079200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H2502.IH H2502

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1 ducted under this section, including an as2 sessment of— 

3 ‘‘(I) the utilization of the find4 ings of research conducted under this 

5 section by health care decision mak6 ers; and 

7 ‘‘(II) the effect of the Institute 

8 and such activities on innovation and 

9 on the health economy of the United 

10 States. 

11 ‘‘(B) REPORTS.—Not later than 5 years 

12 after the date of enactment of this section, and 

13 not less frequently than every 5 years there14 after, the Comptroller General of the United 

15 States shall submit a report to Congress con16 taining the results of the review conducted 

17 under subparagraph (A), together with rec18 ommendations for such legislation and adminis19 trative action as the Comptroller General deter20 mines appropriate. 

21 ‘‘(2) FUNDING ASSESSMENT.— 

22 ‘‘(A) IN GENERAL.—The Comptroller Gen23 eral of the United States shall assess the ade24 quacy and use of funding for the Institute and 

25 activities conducted under this section under 


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1 the CERTF under section 9511 of the Internal 

2 Revenue Code of 1986. Such assessment shall 

3 include a determination as to whether, based on 

4 the utilization of findings by public and private 

5 payers, each of the following are appropriate 

6 sources of funding for the Institute, including a 

7 determination of whether such sources of fund8 ing should be continued or adjusted: 

9 ‘‘(i) The amounts appropriated under 

10 subparagraphs (A), (B), (C), (D)(ii), and 

11 (E)(ii) of subsection (b)(1) of such section 

12 9511. 

13 ‘‘(ii) Private sector contributions 

14 under subparagraphs (D)(i) and (E)(i) of 

15 such subsection (b)(1). 

16 ‘‘(B) REPORT.—Not later than 8 years 

17 after the date of enactment of this section, the 

18 Comptroller General of the United States shall 

19 submit a report to Congress containing the re20 sults of the assessment conducted under sub21 paragraph (A), together with recommendations 

22 for such legislation and administrative action as 

23 the Comptroller General determines appro24 priate. 

25 ‘‘(i) PUBLIC COMMENT PERIODS.— 


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1 ‘‘(1) IN GENERAL.—The Institute shall provide 

2 for a public comment period of not less than 30 and 

3 not more than 60 days at the following times: 

4 ‘‘(A) Prior to the adoption of the national 

5 priorities identified under subsection (d)(1)(A), 

6 the research project agenda established under 

7 subsection (d)(1)(B), the methodological stand8 ards developed and updated by the methodology 

9 committee under subsection (d)(5)(C)(i), the 

10 peer-review process generally provided under 

11 subsection (d)(6), and dissemination protocols 

12 and strategies developed by the Institute under 

13 subsection (d)(7)(B) in accordance with sub14 section (d)(8). 

15 ‘‘(B) Prior to the finalization of individual 

16 study designs. 

17 ‘‘(2) TRANSMISSION OF PUBLIC COMMENTS ON

18 STUDY DESIGN.—The Institute shall transmit public 

19 comments submitted during the public comment pe20 riod described in paragraph (1)(B) to the entity con21 ducting research with respect to which the individual 

22 study design is being finalized. 

23 ‘‘(j) RULES.— 

24 ‘‘(1) GIFTS.—The Institute, or the Board and 

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1 tute, may not accept gifts, bequeaths, or donations 

2 of services or property. 

3 ‘‘(2) ESTABLISHMENT AND PROHIBITION ON

4 ACCEPTING OUTSIDE FUNDING OR CONTRIBU5 TIONS.—The Institute may not— 

6 ‘‘(A) establish a corporation other than as 

7 provided under this section; or 

8 ‘‘(B) accept any funds or contributions 

9 other than as provided under this part. 

10 ‘‘(k) RULES OF CONSTRUCTION.— 

11 ‘‘(1) COVERAGE.—Nothing in this section shall 

12 be construed— 

13 ‘‘(A) to permit the Institute to mandate 

14 coverage, reimbursement, or other policies for 

15 any public or private payer; or 

16 ‘‘(B) as preventing the Secretary from cov17 ering the routine costs of clinical care received 

18 by an individual entitled to, or enrolled for, ben19 efits under title XVIII, XIX, or XXI in the case 

20 where such individual is participating in a clin21 ical trial and such costs would otherwise be cov22 ered under such title with respect to the bene23 ficiary. 

24 ‘‘(2) REPORTS AND FINDINGS.—None of the re25 ports submitted under this section or research findVerDate Nov 24 2008 04:10 May 21, 2009 Jkt 079200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H2502.IH H2502

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1 ings disseminated by the Institute shall be construed 

2 as mandates, guidelines, or recommendations for 

3 payment, coverage, or treatment. 

4 ‘‘(3) PHYSICIAN OUT.—None of the reports 

5 submitted under this section or research findings 

6 disseminated by the Institute shall be construed to 

7 prevent the physician and patient to ultimately de8 termine what is best for the patient involved given 

9 the individual circumstances of different patients.’’. 

10 (b) COORDINATION WITH PROVIDER EDUCATION

11 AND TECHNICAL ASSISTANCE.—Section 1889(a) of the 

12 Social Security Act (42 U.S.C. 1395zz(a)) is amended by 

13 inserting ‘‘and to enhance the understanding of and utili14 zation by providers of services and suppliers of research 

15 findings disseminated by the Health Care Comparative Ef16 fectiveness Research Institute established under section 

17 1181’’ before the period at the end. 

18 (c) COMPARATIVE EFFECTIVENESS RESEARCH

19 TRUST FUND; FINANCING FOR TRUST FUND.— 

20 (1) ESTABLISHMENT OF TRUST FUND.— 

21 (A) IN GENERAL.—Subchapter A of chap22 ter 98 of the Internal Revenue Code of 1986 

23 (relating to establishment of trust funds) is 

24 amended by adding at the end the following 

25 new section: 


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1 ‘‘SEC. 9511. COMPARATIVE EFFECTIVENESS RESEARCH 

2 TRUST FUND. 

3 ‘‘(a) CREATION OF TRUST FUND.—There is estab4 lished in the Treasury of the United States a trust fund 

5 to be known as the ‘Comparative Effectiveness Research 

6 Trust Fund’ (hereafter in this section referred to as the 

7 ‘CERTF’), consisting of such amounts as may be appro8 priated or credited to such Trust Fund as provided in this 

9 section and section 9602(b). 

10 ‘‘(b) TRANSFERS TO FUND.— 

11 ‘‘(1) FROM ARRA FUNDING FOR CER.—There 

12 are hereby transferred to the CERTF the amounts 

13 appropriated to carry out comparative effectiveness 

14 research under division A of Public Law 111–5. 

15 whether appropriated for the National Institutes of 

16 Health, the Secretary of Health and Human Serv17 ices, or the Agency for Healthcare Research and 

18 Quality, which are not otherwise obligated or ex19 pended as of the date of the enactment of this sec20 tion. 

21 ‘‘(2) FROM MEDICARE TRUST FUNDS.— 

22 ‘‘(A) IN GENERAL.—The Secretary of 

23 Health and Human Services shall provide for 

24 the transfer, from the Federal Hospital Insur25 ance Trust Fund under section 1817 of the So26 cial Security Act and the Federal SuppleVerDate Nov 24 2008 04:10 May 21, 2009 Jkt 079200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H2502.IH H2502

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1 mentary Medical Insurance Trust Fund under 

2 section 1841 of such Act, in proportion (as esti3 mated by the Secretary) to the total expendi4 tures during such fiscal year that are made 

5 under title XVIII of such title from the respec6 tive trust fund, to the CERTF the following: 

7 ‘‘(i) For fiscal year 2010, an amount 

8 equal to 50 cents multiplied by the average 

9 number of individuals entitled to benefits 

10 under part A, or enrolled under part B, of 

11 title XVIII of such Act during such fiscal 

12 year. 

13 ‘‘(ii) For each of fiscal years 2011 

14 through 2020, an amount equal to $1 mul15 tiplied by the average number of individ16 uals entitled to benefits under part A, or 

17 enrolled under part B, of such title XVIII 

18 during such fiscal year. 

19 ‘‘(B) ADJUSTMENTS FOR INCREASES IN

20 HEALTH CARE SPENDING.—In the case of any 

21 fiscal year beginning after September 30, 2011, 

22 the dollar amount in effect under subparagraph 

23 (A)(ii) for such fiscal year shall be equal to the 

24 sum of such dollar amount for the previous fis25 cal year (determined after the application of 


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1 this subparagraph), plus an amount equal to 

2 the product of— 

3 ‘‘(i) such dollar amount for the pre4 vious fiscal year; multiplied by 

5 ‘‘(ii) the percentage increase in the 

6 projected per capita amount of National 

7 Health Expenditures from the calendar 

8 year in which the previous fiscal year ends 

9 to the calendar year in which the fiscal 

10 year involved ends, as most recently pub11 lished by the Secretary before the begin12 ning of the fiscal year. 

13 ‘‘(3) ADDITIONAL TRANSFERS FOR FISCAL

14 YEARS 2010 THROUGH 2020.—There are hereby ap15 propriated to the CERTF for each of fiscal years 

16 2010 through 2020, an amount equivalent to the net 

17 revenues received in the Treasury from the fees im18 posed under subchapter B of chapter 34 (relating to 

19 fees on health insurance and self-insured plans) for 

20 such fiscal year. 

21 ‘‘(4) LIMITATION ON TRANSFERS TO CERTF.— 

22 No amount may be appropriated or transferred to 

23 the CERTF on and after the date of any expendi24 ture from the CERTF which is not an expenditure 

25 permitted under this section. The determination of 


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1 whether an expenditure is so permitted shall be 

2 made without regard to— 

3 ‘‘(A) any provision of law which is not con4 tained or referenced in this chapter or in a rev5 enue Act, and 

6 ‘‘(B) whether such provision of law is a 

7 subsequently enacted provision or directly or in8 directly seeks to waive the application of this 

9 paragraph. 

10 ‘‘(c) TRUSTEE.—The Secretary of Health and 

11 Human Services shall be a trustee of the CERTF. 

12 ‘‘(d) EXPENDITURES FROM FUND.—Amounts in the 

13 CERTF are available, without further appropriation, to 

14 the Health Care Comparative Effectiveness Research In15 stitute established by section 2(a) of the Comparative Ef16 fectiveness Research Act of 2009 for carrying out part D 

17 of title XI of the Social Security Act (as in effect on the 

18 date of enactment of the Comparative Effectiveness Re19 search Act of 2009). 

20 ‘‘(e) NET REVENUES.—For purposes of this section, 

21 the term ‘net revenues’ means the amount estimated by 

22 the Secretary of the Treasury based on the excess of— 

23 ‘‘(1) the fees received in the Treasury under 

24 subchapter B of chapter 34, over 


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1 ‘‘(2) the decrease in the tax imposed by chapter 

2 1 resulting from the fees imposed by such sub3 chapter. 

4 ‘‘(f) TERMINATION.—No amounts shall be available 

5 for expenditure from the CERTF after September 30, 

6 2020, and any amounts in such Trust Fund after such 

7 date shall be transferred to the general fund of the Treas8 ury.’’. 

9 (B) CLERICAL AMENDMENT.—The table of 

10 sections for subchapter A of chapter 98 of such 

11 Code is amended by adding at the end the fol12 lowing new item: 

‘‘Sec. 9511. Comparative Effectiveness Research Trust Fund.’’. 

13 (2) FINANCING FOR FUND FROM FEES ON IN14 SURED AND SELF-INSURED HEALTH PLANS.— 

15 (A) GENERAL RULE.—Chapter 34 of the 

16 Internal Revenue Code of 1986 is amended by 

17 adding at the end the following new subchapter: 

18 ‘‘Subchapter B—Insured and Self-Insured 

19 Health Plans 

‘‘Sec. 4375. Health insurance. 

‘‘Sec. 4376. Self-insured health plans. 

‘‘Sec. 4377. Definitions and special rules. 

20 ‘‘SEC. 4375. HEALTH INSURANCE. 

21 ‘‘(a) IMPOSITION OF FEE.—There is hereby imposed 

22 on each specified health insurance policy for each policy 

23 year ending after September 30, 2009, a fee equal to the 


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1 product of $1 (50 cents in the case of policy years ending 

2 during fiscal year 2010) multiplied by the average number 

3 of lives covered under the policy. 

4 ‘‘(b) LIABILITY FOR FEE.—The fee imposed by sub5 section (a) shall be paid by the issuer of the policy. 

6 ‘‘(c) SPECIFIED HEALTH INSURANCE POLICY.—For 

7 purposes of this section: 

8 ‘‘(1) IN GENERAL.—Except as otherwise pro9 vided in this section, the term ‘specified health in10 surance policy’ means any accident or health insur11 ance policy (including a policy under a group health 

12 plan) issued with respect to individuals residing in 

13 the United States. 

14 ‘‘(2) EXEMPTION FOR CERTAIN POLICIES.—The 

15 term ‘specified health insurance policy’ does not in16 clude any insurance if substantially all of its cov17 erage is of excepted benefits described in section 

18 9832(c). 

19 ‘‘(3) TREATMENT OF PREPAID HEALTH COV20 ERAGE ARRANGEMENTS.— 

21 ‘‘(A) IN GENERAL.—In the case of any ar22 rangement described in subparagraph (B)— 

23 ‘‘(i) such arrangement shall be treated 

24 as a specified health insurance policy, and 


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1 ‘‘(ii) the person referred to in such 

2 subparagraph shall be treated as the 

3 issuer. 

4 ‘‘(B) DESCRIPTION OF ARRANGEMENTS.— 

5 An arrangement is described in this subpara6 graph if under such arrangement fixed pay7 ments or premiums are received as consider8 ation for any person’s agreement to provide or 

9 arrange for the provision of accident or health 

10 coverage to residents of the United States, re11 gardless of how such coverage is provided or ar12 ranged to be provided. 

13 ‘‘(d) ADJUSTMENTS FOR INCREASES IN HEALTH

14 CARE SPENDING.—In the case of any policy year ending 

15 in any fiscal year beginning after September 30, 2013, the 

16 dollar amount in effect under subsection (a) for such pol17 icy year shall be equal to the sum of such dollar amount 

18 for policy years ending in the previous fiscal year (deter19 mined after the application of this subsection), plus an 

20 amount equal to the product of— 

21 ‘‘(1) such dollar amount for policy years ending 

22 in the previous fiscal year, multiplied by 

23 ‘‘(2) the percentage increase in the projected 

24 per capita amount of National Health Expenditures 

25 from the calendar year in which the previous fiscal 


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1 year ends to the calendar year in which the fiscal 

2 year involved ends, as most recently published by the 

3 Secretary of Health and Human Services before the 

4 beginning of the fiscal year. 

5 ‘‘(e) TERMINATION.—This section shall not apply to 

6 policy years ending after September 30, 2020. 

7 ‘‘SEC. 4376. SELF-INSURED HEALTH PLANS. 

8 ‘‘(a) IMPOSITION OF FEE.—In the case of any appli9 cable self-insured health plan for each plan year ending 

10 after September 30, 2011, there is hereby imposed a fee 

11 equal to $1 (50 cents in the case of plan years ending 

12 during fiscal year 2012) multiplied by the average number 

13 of lives covered under the plan. 

14 ‘‘(b) LIABILITY FOR FEE.— 

15 ‘‘(1) IN GENERAL.—The fee imposed by sub16 section (a) shall be paid by the plan sponsor. 

17 ‘‘(2) PLAN SPONSOR.—For purposes of para18 graph (1) the term ‘plan sponsor’ means— 

19 ‘‘(A) the employer in the case of a plan es20 tablished or maintained by a single employer, 

21 ‘‘(B) the employee organization in the case 

22 of a plan established or maintained by an em23 ployee organization, 

24 ‘‘(C) in the case of— 


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1 ‘‘(i) a plan established or maintained 

2 by 2 or more employers or jointly by 1 or 

3 more employers and 1 or more employee 

4 organizations, 

5 ‘‘(ii) a multiple employer welfare ar6 rangement, or 

7 ‘‘(iii) a voluntary employees’ bene8 ficiary association described in section 

9 501(c)(9), 

10 the association, committee, joint board of trust11 ees, or other similar group of representatives of 

12 the parties who establish or maintain the plan, 

13 or 

14 ‘‘(D) the cooperative or association de15 scribed in subsection (c)(2)(F) in the case of a 

16 plan established or maintained by such a coop17 erative or association. 

18 ‘‘(c) APPLICABLE SELF-INSURED HEALTH PLAN.— 

19 For purposes of this section, the term ‘applicable self-in20 sured health plan’ means any plan for providing accident 

21 or health coverage if— 

22 ‘‘(1) any portion of such coverage is provided 

23 other than through an insurance policy, and 

24 ‘‘(2) such plan is established or maintained— 


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1 ‘‘(A) by one or more employers for the 

2 benefit of their employees or former employees, 

3 ‘‘(B) by one or more employee organiza4 tions for the benefit of their members or former 

5 members, 

6 ‘‘(C) jointly by 1 or more employers and 1 

7 or more employee organizations for the benefit 

8 of employees or former employees, 

9 ‘‘(D) by a voluntary employees’ beneficiary 

10 association described in section 501(c)(9), 

11 ‘‘(E) by any organization described in sec12 tion 501(c)(6), or 

13 ‘‘(F) in the case of a plan not described in 

14 the preceding subparagraphs, by a multiple em15 ployer welfare arrangement (as defined in sec16 tion 3(40) of Employee Retirement Income Se17 curity Act of 1974), a rural electric cooperative 

18 (as defined in section 3(40)(B)(iv) of such Act), 

19 or a rural telephone cooperative association (as 

20 defined in section 3(40)(B)(v) of such Act). 

21 ‘‘(d) ADJUSTMENTS FOR INCREASES IN HEALTH

22 CARE SPENDING.—In the case of any plan year ending 

23 in any fiscal year beginning after September 30, 2011, the 

24 dollar amount in effect under subsection (a) for such plan 

25 year shall be equal to the sum of such dollar amount for 


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1 plan years ending in the previous fiscal year (determined 

2 after the application of this subsection), plus an amount 

3 equal to the product of— 

4 ‘‘(1) such dollar amount for plan years ending 

5 in the previous fiscal year, multiplied by 

6 ‘‘(2) the percentage increase in the projected 

7 per capita amount of National Health Expenditures 

8 from the calendar year in which the previous fiscal 

9 year ends to the calendar year in which the fiscal 

10 year involved ends, as most recently published by the 

11 Secretary of Health and Human Services before the 

12 beginning of the fiscal year. 

13 ‘‘(e) TERMINATION.—This section shall not apply to 

14 plan years ending after September 30, 2020. 

15 ‘‘SEC. 4377. DEFINITIONS AND SPECIAL RULES. 

16 ‘‘(a) DEFINITIONS.—For purposes of this sub17 chapter— 

18 ‘‘(1) ACCIDENT AND HEALTH COVERAGE.—The 

19 term ‘accident and health coverage’ means any cov20 erage which, if provided by an insurance policy, 

21 would cause such policy to be a specified health in22 surance policy (as defined in section 4375(c)). 

23 ‘‘(2) INSURANCE POLICY.—The term ‘insurance 

24 policy’ means any policy or other instrument whereVerDate Nov 24 2008 04:10 May 21, 2009 Jkt 079200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\H2502.IH H2502

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1 by a contract of insurance is issued, renewed, or ex2 tended. 

3 ‘‘(3) UNITED STATES.—The term ‘United 

4 States’ includes any possession of the United States. 

5 ‘‘(b) TREATMENT OF GOVERNMENTAL ENTITIES.— 

6 ‘‘(1) IN GENERAL.—For purposes of this sub7 chapter— 

8 ‘‘(A) the term ‘person’ includes any gov9 ernmental entity, and 

10 ‘‘(B) notwithstanding any other law or rule 

11 of law, governmental entities shall not be ex12 empt from the fees imposed by this subchapter 

13 except as provided in paragraph (2). 

14 ‘‘(2) TREATMENT OF EXEMPT GOVERNMENTAL

15 PROGRAMS.—In the case of an exempt governmental 

16 program, no fee shall be imposed under section 4375 

17 or section 4376 on any covered life under such pro18 gram. 

19 ‘‘(3) EXEMPT GOVERNMENTAL PROGRAM DE20 FINED.—For purposes of this subchapter, the term 

21 ‘exempt governmental program’ means— 

22 ‘‘(A) any insurance program established 

23 under title XVIII of the Social Security Act, 


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1 ‘‘(B) the medical assistance program es2 tablished by title XIX or XXI of the Social Se3 curity Act, 

4 ‘‘(C) any program established by Federal 

5 law for providing medical care (other than 

6 through insurance policies) to individuals (or 

7 the spouses and dependents thereof) by reason 

8 of such individuals being— 

9 ‘‘(i) members of the Armed Forces of 

10 the United States, or 

11 ‘‘(ii) veterans, and 

12 ‘‘(D) any program established by Federal 

13 law for providing medical care (other than 

14 through insurance policies) to members of In15 dian tribes (as defined in section 4(d) of the In16 dian Health Care Improvement Act). 

17 ‘‘(c) TREATMENT AS TAX.—For purposes of subtitle 

18 F, the fees imposed by this subchapter shall be treated 

19 as if they were taxes. 

20 ‘‘(d) NO COVER OVER TO POSSESSIONS.—Notwith21 standing any other provision of law, no amount collected 

22 under this subchapter shall be covered over to any posses23 sion of the United States.’’. 

24 (B) CLERICAL AMENDMENTS.— 


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1 (i) Chapter 34 of such Code is amend2 ed by striking the chapter heading and in3 serting the following: 

4 ‘‘CHAPTER 34—TAXES ON CERTAIN 

5 INSURANCE POLICIES 

‘‘SUBCHAPTER A. Policies issued by foreign insurers. 

‘‘SUBCHAPTER B. Insured and self-insured health plans. 

6 ‘‘Subchapter A—Policies Issued By Foreign 

7 Insurers’’. 

8 (ii) The table of chapters for subtitle 

9 D of such Code is amended by striking the 

10 item relating to chapter 34 and inserting 

11 the following new item: 

‘‘CHAPTER 34—TAXES ON CERTAIN INSURANCE POLICIES’’. 

Æ 


smartinez on PROD1PC70 with BILLS