89–008 

111TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 111–448 

PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENTS TO THE 

BILL (H.R. 3590) TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO 

MODIFY THE FIRST-TIME HOMEBUYERS CREDIT IN THE CASE OF MEMBERS OF THE ARMED FORCES AND CERTAIN OTHER FEDERAL EMPLOYEES, AND FOR OTHER PURPOSES, AND PROVIDING FOR CONSIDERATION 

OF THE BILL (H.R. 4872) TO PROVIDE FOR RECONCILIATION PURSUANT 

TO SECTION 202 OF THE CONCURRENT RESOLUTION ON THE BUDGET 

FOR FISCAL YEAR 2010 

MARCH 21, 2010 (legislative day of March 20, 2010).—Referred to the House 

Calendar and ordered to be printed 

Ms. SLAUGHTER, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 1203] 

The Committee on Rules, having had under consideration House 

Resolution 1203, by a record vote of 8 to 5, report the same to the 

House with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for consideration of the Senate amendments to H.R. 3590, the ‘‘Patient Protection and Affordable Care 

Act,’’ and H.R. 4872, the ‘‘Reconciliation Act of 2010.’’ 

The resolution provides two hours of debate on the topic of the 

Senate amendments and the topic of H.R. 4872 equally divided and 

controlled by the Majority Leader and Minority Leader or their 

designees. 

With respect to the Senate amendments to H.R. 3590, the resolution makes in order a motion offered by the Majority Leader or a 

designee that the House concur in the Senate amendments. The 

motion shall be in order without intervention of any point of order 

except those arising under clause 10 of rule XXI. The Senate 

amendments and the motion shall be considered as read. 

If the motion to concur in the Senate amendments is adopted, 

the resolution provides for consideration of H.R. 4872 under a 

closed rule. The resolution waives all points of order against consideration of H.R. 4872 except those arising under clause 10 of rule 

XXI. It provides that the amendment in the nature of a substitute 

printed in part A of this report, modified by the amendment printed in part B of this report, shall be considered as adopted and the 


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bill, as amended, shall be considered as read. The resolution waives 

all points of order against H.R. 4872, as amended. The resolution 

provides one motion to recommit H.R. 4872 with or without instructions. 

Until completion of proceedings enabled by the first three sections of this resolution, (a) the Chair may decline to entertain any 

intervening motion (except as expressly provided herein), resolution, question, or notice; (b) the Chair may decline to entertain the 

question of consideration; (c) the Chair may postpone such proceedings to such time as may be designated by the Speaker; (d) the 

second sentence of clause 1(a) of rule XIX shall not apply (regarding 40 minutes of debate on non-debatable questions); and (e) any 

proposition admissible under the first three sections of this resolution shall be considered as read. 

Finally, the resolution directs the Clerk, in the engrossment of 

H.R. 4872, to amend the title to read: ‘‘An act to provide for reconciliation pursuant to title II of the concurrent resolution on the 

budget for fiscal year 2010 (S. Con. Res. 13).’’ 

EXPLANATION OF WAIVERS

Although the rule waives all points of order against consideration 

of the motion to concur in the Senate amendments to H.R. 3590 

(except those arising under clause 10 of rule XXI), the Committee 

is not aware of any points of order against the motion. The waiver 

of all points of order against the motion is prophylactic. 

The waiver of all points of order against consideration of H.R. 

4872 (except those arising under clause 10 of rule XXI) includes a 

waiver of clause 9 of rule XXI (regarding earmark disclosure) and 

clause 3(d)(2) of rule XIII (cost estimate). The waiver of all points 

of order against provisions in H.R. 4872, as amended, includes a 

waiver of clause 4 of rule XXI (appropriations-in-legislation) and 

clause 5(a) of rule XXI (tax or tariff reported by committee without 

that jurisdiction). 

COMMITTEE VOTES

The results of each record vote on an amendment or motion to 

report, together with the names of those voting for and against, are 

printed below: 

Rules Committee record vote No. 330 

Date: March 20, 2010. 

Measure: H.R. 4872 and Senate Amendments to H.R. 3590. 

Motion by: Mr. Dreier. 

Summary of motion: To report an open rule. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 331 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 


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Summary of motion: To amend the rule to provide that for any 

record vote demanded on passage to H.R. 4872, the Speaker shall 

use her authority pursuant to clause 3 of rule 26 to direct the 

Clerk to conduct such vote by call of the roll. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Arcuri—Nay; Perlmutter— 

Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; 

Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 332 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton (TX), #53, which would 

prevent this bill from taking effect until the Office of Management 

and Budget certifies that the federal budget deficit has been eliminated. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 333 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Shimkus (IL), #55, which would 

require a certification that the bill would lower national health 

costs. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay: Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 334 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton (TX), #68, which would 

strike all taxes in the bill. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 335 

Date: March 20, 2010. 

Measure: H.R. 4872. 


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Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton (TX) and Rep. Johnson 

(TX), #48, which would remove the provision which provides extra 

funds to Louisiana’s Medicaid program. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 336 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton (TX) and Rep. Johnson 

(TX), #49, which would remove the provision which provides funds 

for a medical facility in Connecticut. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 337 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton (TX) and Rep. Johnson 

(TX), #50, which would remove the provision that would allow certain hospitals to benefit from Section 508 if it means higher Medicare payments. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 338 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton (TX) and Rep. Johnson 

(TX), #54, which would remove the provision that provides for increased Medicare payments to hospitals and doctors in frontier 

states. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 


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Rules Committee record vote No. 339 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton (TX) and Rep. Johnson 

(TX), #70, which would repeal a provision providing Medicare coverage to certain individuals exposed to environmental health hazards. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 340 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton (TX) and Rep. Johnson 

(TX), #76, which would repeal section 6001 of the bill, Limitation 

on Medicare exception to the prohibition on certain physician referrals for hospitals. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 341 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Scalise (LA), #65, which would 

strike the individual health care mandate. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 342 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Shadegg (AZ) and Rep. Broun 

(GA) and Rep. Blackburn (TN), #84, which would add a section on 

interstate purchasing of health insurance. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; PinVerDate Nov 24 2008 07:33 Mar 21, 2010 Jkt 089008 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR448.XXX HR448

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gree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 343 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Broun (GA), #88, which would 

allow for 100% deductibility of individual medical expenses. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 344 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Brown-Waite (FL), #82, which 

would eliminate any cuts to Medicare in the bill. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 345 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Cassidy (LA), #91, which would 

clarify that high-deductible health plans with an HSA meet the 

definition of adequate coverage. Furthermore, any new standards 

adopted by the Secretary shall not apply to high-deductible health 

plans and health savings accounts if such standards would have 

the effect of disqualifying such plans from meeting the essential 

benefit package requirements. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay, Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 346 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Cole (OK), #3, which would require that savings resulting from spending reductions in Medicare 


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will stay in Medicare to pay down long-term unfunded financial obligations. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 347 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Rogers (MI), #32, which would 

express the sense of Congress that any new Social Security payroll 

tax revenue that results from this legislation could only be used for 

future Social Security benefit payments. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 348 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Franks (AZ), #43, which would 

prohibit cuts to Medicare Advantage plans. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay, Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 349 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Rogers (MI), #73, which would 

require there to be no changes to Medicare Advantage for a given 

year until the HHS Secretary certifies that no senior will be forced 

away from or losing their enrollment in the MA plan they were enrolled on as of the day before enactment of the bill. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 350 

Date: March 20, 2010. 

Measure: H.R. 4872. 


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Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Herger (CA) and Rep. Boustany 

Jr. (LA) and Rep. Broun (GA), #45, would prohibit CMS from making coverage determinations using Comparative Effectiveness Research solely on the basis of cost. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 351 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Burgess (TX), #19, which would 

require that to have a qualified state plan under the Medicaid program states must pay providers at least 75% of the payment rate 

paid to a provider under the state employees plan or the Federal 

Employees Health Benefit Plan (FEHBP) most chosen by families. 

For dental & vision services, in the case where such services 

are covered under a state employee plan, providers must be paid 

at 75% of the rate paid under the plan. In the case where supplemental dental and vision services are not offered to a state employee providers must be paid at a rate of 75% of the rate paid by 

the supplemental (vision & dental) FEHBP plan most often chosen 

by families. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 352 

Date March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Burgess (TX), #20, which would 

establish a utilization review and appeals process for qualified 

health plans. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 353 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 


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Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Terry (NE), #79, which would 

strike Medicare payment cuts to disproportionate share hospitals. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 354 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Terry (NE), #52, which would 

strike market basket update reductions. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 355 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Upton (MI), #78, which would 

prohibit the bill from taking effect until the Medicare Trustees publish projections that show that Medicare is solvent for the next 30 

years. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 356 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Whitfield (KY), #56, which 

would remove the ‘‘prompt pay’’ discount from the Medicare part B 

reimbursement formula. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 357 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 


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Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Whitfield (KY), #57, which 

which would place a moratorium on the cuts to reimbursement for 

procedure performed by interventional pain physicians. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 358 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Lummis (WY) and Rep. Johnson (TX), #41, which would allow States to opt out of any provisions of the bill to the extent that they mandate the purchasing of 

health insurance by residents in such State, mandate the provision 

of health insurance by employers in such State, or interfere with 

the ability of patients to privately contract with medical providers 

and insurers under the laws of such State. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 359 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Lincoln Diaz-Balart of Florida. 

Summary of motion: To make in order and provide appropriate 

waivers for substitute amendment #95, offered by Rep. Issa (CA), 

which would strike all after the enacting clause and insert language that would allow every American to obtain the same health 

insurance that members of Congress have by using the existing 

framework of the Federal Employees Health Benefits Plan 

(FEHBP). The Office of Personnel Management (OPM) would contract with insurance providers to make private health insurance 

plans available to all Americans. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 360 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Buyer (IN) and Rep. McKeon 

(CA), #31, which would protect the integrity and independence of 

the Department of Defense (DOD) and the Department of Veterans 


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Affairs (VA) health care systems and state that the TRICARE program and veterans’ health care programs meet all of the requirements for individual health insurance under the bill. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 361 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Blackburn (TN), #12, which 

would prohibit exchange plans from being established until the 

HHS Secretary certifies that the establishment of exchange plans 

will not cause the cost of the average price of private health insurance premiums to increase. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 362 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Blackburn (TN), #8, which 

would provide that if OMB submits a report saying that the costs 

of title I of the bill and the Patient Protection and Affordable Care 

Act are 25% or greater than the Federal budget, than the Congress 

shall consider a joint resolution to repeal such provisions. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 363 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Flake (AZ), #106, which would 

strike the employer mandate to provide health insurance for employees. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 


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Rules Committee record vote No. 364 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Broun (GA), #85, which would 

require any business that is characterized as a minority owned 

business or small business concern (as defined by section 3 of the 

Small Business Act, 15 U.S.C. 632) is exempt from all employer 

mandates. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 365 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Broun (GA), #86, which would 

exempt any business whose gross revenues per year do not exceed 

$500,000 from all employer mandates. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 366 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Paulsen (MN), #42, which 

would exclude temporary workers from the employer mandate. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 367 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for amendment to be separately debatable for 10 minutes 

each by Rep. Heller (NV), #97, prevents the $2,000 per employee 

tax from impacting employers in states where unemployment is 

greater than 6 percent.; and the amendment by Rep. Upton (MI), 

#77, would prohibit the employer mandate from going into effect if 

unemployment is over 7%.; and the amendment by Rep. Kingston 

(GA), #99, would suspend the employer mandate for every year 


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that the national unemployment rate is at or above 9%.; and the 

amendment by Rep. Rogers (MI), #64, would prohibit the employer 

mandate from going into effect if national unemployment is over 

10%.; and the amendment by Rep. Rogers (MI), #51, would prohibit 

the employer mandate from going into effect if in a state where unemployment is over 10% 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 368 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Shimkus (IL), #58, which would 

allow states to opt-out of the Medicaid expansion. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 369 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Shimkus (IL), #47, which would 

provide funds to Medicaid recipients so they can buy into employersponsored insurance. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 370 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Paulsen (MN) and Rep. Lance 

(NJ) and Rep. Dent (PA) and Rep. Gerlach (PA), #30, which would 

remove the medical innovation tax and replace it with unobligated 

stimulus funds. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 


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Rules Committee record vote No. 371 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Dent (PA), #89, which would 

add a new division titled, ending defensive medicine and encouraging innovation. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 372 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Shadegg (AZ) and Rep. Broun 

(GA), #83, which adds a section to establish universal access programs to improve high risk pools and reinsurance markets. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 373 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Broun (GA), #46, which would 

provide individuals 100% deductibility for all medical expenses; reform EMTALA; provide for cooperative governing of individual 

health insurance coverage; and provide for Association Health 

Plans. The amendment is the same as H.R. 3889. 

Results: Defeated 3–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Sessions—Yea; Foxx—Yea; 

Slaughter—Nay. 

Rules Committee record vote No. 374 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Burgess (TX), #61, which would 

add a division based on the medical liability reforms adopted in 

Texas. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; PinVerDate Nov 24 2008 07:33 Mar 21, 2010 Jkt 089008 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\HR448.XXX HR448

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gree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 375 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for amendments Rep. Hall (TX), #69, would require a social 

security number for eligibility for participation in an exchange; and 

the amendment by Rep. Hall (TX), #80, would require a valid photo 

ID when applying for Medicaid or SCHIP. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 376 

Date: March 2, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Heller (NV) and Rep. Johnson 

(TX), #96, which strikes the individual mandate exemption for illegal immigrants. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 377 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Mr. Sessions. 

Summary of motion: To make in order and provide appropriate 

waivers for amendment to be separately debatable for 10 minutes 

each and considered: by Rep. Hinojosa (TX), #105, would add a 

Hold Harmless Amendment for those hospitals that serve High 

Poverty Areas and are subject to reductions in their Medicare and 

Medicaid Disproportionate Share Hospital Payments. Would require MEDPAC to conduct a study that determines the continued 

operability of hospitals in High Poverty Areas. The Secretary of 

Health and Human Services would enact recommendations based 

on the study to ensure continued access to care by individuals 

served by such hospitals; and the amendment by Rep. Jackson Lee 

(TX), #92, would strike Medicare limits on expanding physicianowned hospitals; and the amendment by Rep. Jackson Lee (TX), 

#93, would provide an exception to Medicare limits on physicianowned hospitals by providing an exception for safety net hospitals 

(meets criteria for disproportionate share hospital or high number 

of emergency room visits).; and the amendment by Rep. Jackson 

Lee (TX), #94, would amend the definition for ‘‘high Medicaid facility.’’ 


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Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 378 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Foxx (NC), #6, which would 

strike the entire Student Aid and Fiscal Responsibility Act 

(SAFRA) from the Amendment in the Nature of a Substitute to 

H.R. 4872. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 379 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Broun (GA) and Rep. Johnson 

(TX) and Rep. Franks (AZ), #98, which would provide that nothing 

in the Patient Protection and Affordable Care Act or this Act may 

authorize or permit access to or coverage of abortions except in the 

case of a woman who suffers a physical disorder, physical injury, 

or physical illness that would, as certified by a physician, place the 

woman in danger of death unless an abortion is performed; or if 

the pregnancy is the result of an act of forcible rape or incest. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 380 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Brown-Waite (FL), #67, which 

would repeal the sections of the bill that require the IRS to enforce 

the individual mandate. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 


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Rules Committee record vote No. 381 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Blackburn (TN), #13, which 

would prohibit the Federal government from passing any law that 

would give it authority to ration health care for the American people. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 382 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Roskam (IL), #90, which would 

strike the current section 1302, Essential Health Benefits Requirements, and replace with a new section, Medicare Waste, Fraud, 

and Abuse Prevention Pilot Program. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 383 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Kingston (GA), #101, which 

would suspend new taxes unless Medicare fraud is below 1%. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 384 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Lee (NY), #11, which would create a 3 year/5 state medical tribunal pilot program to be administered by the Secretary of HHS. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; PinVerDate Nov 24 2008 07:33 Mar 21, 2010 Jkt 089008 PO 00000 Frm 00017 Fmt 6659 Sfmt 6602 E:\HR\OC\HR448.XXX HR448

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gree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 385 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Roe (TN), #44, which would repeal the enactment of the Independent Medicare Advisory Board. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 386 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Gingrey (GA), #29, which would 

state that nothing in H.R. 4872 shall be construed to allow any 

Federal employee or political appointee to dictate how a medical 

provider practices medicine. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 387 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Stearns (FL), #17, which would 

require that any written, visual or audio materials distributed 

through a covered official, entity or program shall be in English 

only. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 388 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for amendments by Rep. Sullivan (OK), #22, which would 

require the HHS Secretary to conduct a study on new and old programs affected by this legislation to determine if there is any program duplication. Would require the Secretary to write a report on 


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the study within one year of the enactment of this bill. After writing that report, the Secretary would be required to eliminate any 

duplicative programs within one year; and the amendment by Rep. 

Sullivan (OK), #23, which would require the HHS Secretary to conduct a study on new and old grant programs affected by this legislation to determine if there is any program duplication. Would require the Secretary to write a report on the study within one year 

of the enactment of this bill. After writing that report, the Secretary would be required to eliminate any duplicative programs 

within one year. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 389 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Terry (NE), #21, which would 

establish the Citizen’s Congressional Health Benefits Program 

(CCHBP). 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 390 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Blackburn (TN), #4, which 

would require the HHS Secretary to certify that no American will 

lose access to his or her current health insurance due to the establishment and operation of health plans offered through a state Exchange. This will be an annual certification. Until certification is 

made, no State is required or penalized for the failure to establish 

plans in an Exchange. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 391 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Blackburn (TN), #7, which 

would provide that nothing in the Act shall preclude an individual 


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from purchasing or maintaining insurance qualifying for Health 

Savings Account deposits and nothing shall interfere with their 

ability to continue to make deposits according to the schedule created in the 2006 HSA legislation. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 392 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for amendment en bloc by Rep. Walden (OR), #63, which 

would ensure proportional representation of interest of rural areas 

on IPAB.; and the amendment by Rep. Walden (OR), #71, would 

ensure that MEDPAC has adequate rural representation. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 393 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Dr. Foxx. 

Summary of motion: To make in order and provide appropriate 

waivers for amendments by Rep. Moore (WI), #9, would change the 

date when insurers would need to comply with the new Medical 

Loss Ratio requirements from 2011 to 2014, to conform to when the 

American Health Benefits Exchanges will be established. Redirects 

MLR rebates to the Treasury; and the amendment by Rep. Moore 

(WI), #10, would change the date when insurers would be required 

to comply with new Medical Loss Ratio (MLR) requirements from 

the current draft date of 2011 to 2014, synchronizing it with the 

year when the American Health Benefit Exchanges will be established. Redirects the MLR rebates to the Treasury to be made 

available for the funding of premium assistance credits. 

Results: Defeated 4–9. 

Vote by Members: McGovern—Nay; Hastings (FL)—Nay; Matsui—Nay; Cardoza—Nay; Arcuri—Nay; Perlmutter—Nay; Pingree—Nay; Polis—Nay; Dreier—Yea; Diaz-Balart, L.—Yea; Sessions—Yea; Foxx—Yea; Slaughter—Nay. 

Rules Committee record vote No. 394 

Date: March 20, 2010. 

Measure: H.R. 4872. 

Motion by: Ms. Slaughter. 

Summary of motion: To report the rule. 

Results: Adopted 8–5. 

Vote by Members: McGovern—Yea; Hastings (FL)—Yea; Matsui—Yea; Cardoza—Yea; Arcuri—Nay; Perlmutter—Yea; Pingree— 


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Yea; Polis—Yea; Dreier—Nay; Diaz-Balart, L.—Nay; Sessions— 

Nay; Foxx—Nay; Slaughter—Yea. 

SUMMARY OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE TO

H.R. 4872 IN PART A TO BE CONSIDERED AS ADOPTED

Improves the financing for premiums and cost sharing for individuals with incomes up to 400% of the federal poverty level. Modifies the assessment that individuals who choose to remain uninsured pay in three ways: (a) exempts the income below the filing 

threshold, (b) lowers the flat payment from $495 to $325 in 2015 

and from $750 to $695 in 2016 and (c) raises the percent of income 

that is an alternative payment amount from 0.5 to 1.0% in 2014, 

1.0 to 2.0% in 2015, and 2.0 to 2.5% for 2016 and subsequent years 

to make the assessment more progressive. Improves the transition 

to the employer responsibility policy for employers with 50 or more 

full-time equivalent workers (FTE) by subtracting the first 30 full 

time employees from the payment calculation. Modifies the definition of income that is used for purposes of subsidy eligibility and 

the individual responsibility requirement. Provides a $250 rebate 

for all Medicare Part D enrollees who enter the donut hole in 2010. 

Builds on pharmaceutical manufacturers’ 50% discount on brandname drugs beginning in 2011 to completely close the donut hole 

with 75% discounts on brand-name and generic drugs by 2020. 

Freezes Medicare Advantage payments in 2011. Beginning in 2012, 

the provision reduces Medicare Advantage benchmarks relative to 

current levels. Ensures Medicare Advantage plans spend at least 

85% of revenue on medical costs or activities that improve quality 

of care, rather than profit and overhead. Strikes the provision for 

a permanent 100% federal matching rate for Nebraska for the Medicaid costs of expansion populations. Provides federal Medicaid 

matching payments for the costs of services to expansion populations at the following rates in all states: 100% in 2014, 2015, and 

2016; 95% in 2017; 94% in 2018; 93% in 2019; and 90% thereafter. 

In the case of expansion states, reduces the state share of the costs 

of covering nonpregnant childless adults by 50% in 2014, 60% in 

2015, 70% in 2016, 80% in 2017, 90% in 2018. Requires that Medicaid payment rates to primary care physicians for furnishing primary care services be no less than 100% of Medicare payment rates 

in 2013 and 2014. Lowers the reduction in federal Medicaid DSH 

payments from $18.1 billion to $14.1 billion and advances the reductions to begin in fiscal year 2014. Delays the application of the 

high-cost plan excise tax until 2018, which gives the plans time to 

implement and realize the cost savings of reform; increasing the 

dollar thresholds to $10,200 for single coverage and $27,500 for 

family coverage ($11,850 and $30,950 for retirees and employees in 

high risk professions). Amends the Higher Education Act to include 

mandatory funding for the Pell Grant. Terminates the FFEL program for federal consolidation loans. This section also provides 

that, for a 1 year period, borrowers who have loans under both the 

Direct Lending program and the FFEL program, or who have loans 

under either program as well as loans that have been sold to the 

Secretary, may consolidate such loans under the Direct Lending 

program regardless of whether such borrowers have entered repayment on such loans. Directs the Secretary to award contracts for 

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mits the Secretary to reallocate, increase, reduce or terminate an 

eligible non-profit servicer’s allocation based on the performance of 

such servicer. Extends the prohibition of lifetime limits, prohibition 

on rescissions, and a requirement to provide coverage for non-dependent children up to age 26 to all existing health insurance plans 

starting six months after enactment. Starting in 2014, extends the 

prohibition on excessive waiting periods to existing health plans. 

For group health plans, prohibits pre-existing condition exclusions 

in 2014 (for children, they are prohibited starting six months after 

enactment), restricts annual limits beginning six months after enactment, and prohibits them starting in 2014. Increases mandatory 

funding for community health centers to $11 billion over five years 

(FY 2011–FY 2015). 

SUMMARY OF THE AMENDMENT TO THE AMENDMENT IN THE NATURE

OF A SUBSTITUTE TO H.R. 4872 IN PART B TO BE CONSIDERED AS

ADOPTED

Would (1) reduce the growth rate of the Part D spending threshold for catastrophic benefits between 2014 and 2019, providing additional benefits for seniors with high drug costs; (2) add a transitional phase up period for the coding intensity adjustment for 

Medicare Advantage plans; (3) strike a provision that would have 

deposited funds collected from Medicare Advantage plans for failing 

to meet the medical loss ratio into the CMS Program Management 

Account; (4) insert a new section 1108 that accelerates phase-in of 

Medicare physician practice expense adjustment for areas with 

below average practice expense payment rates. In 2010, national 

blend would be increased from 1⁄4 to 1⁄2. Inserts a new Section 1109 

that provides an additional payment under the Medicare inpatient 

prospective payment systems to hospitals located in counties in the 

bottom quartile of counties as ranked by risk adjusted spending per 

Medicare enrollee; (5) clarify the timing for the election period for 

territories to choose to establish Exchanges; (6) clarify new requirements for community mental health centers to be eligible to participate in the Medicare partial hospitalization benefit; (7) strike section 1303 of the legislation (CMS–IRS Data Match to Identify 

Fraudulent Providers); (8) delete a provision providing for transfers 

of amounts collected from the supplementary medical insurance 

trust fund; (9) modify the pharmaceutical industry annual fee 

schedule; (10) modify the excise tax on importers and manufacturers of medical devices by lowering the rate to 2.3 percent and by 

eliminating the exclusion for Class I medical devices (except if such 

devices are of a type which is purchased by the general public at 

retail and for individual use.); (11) strike section 1411 of the legislation (No Impact on Social Security Trust Funds); (12) amend section 1501 to incorporate the funds into the Trade Act and strikes 

the provision in section 1501 that expands the focus of programs 

to individuals eligible for unemployment insurance; (13) move the 

$13.5 billion in additional Pell funding for fiscal year 2011 into section 401 of the Higher Education Act; (14) strike section 2102 of 

the legislation (Student Financial Assistance); and (15) strike section 2213 of the legislation (Agreements with State-Owned Banks.) 


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PART A: TEXT OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE

TO H.R. 4872 TO BE CONSIDERED AS ADOPTED

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Health Care and 

Education Affordability Reconciliation Act of 2010’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act is as 

follows: 

Sec. 1. Short title; table of contents. 

TITLE I—COVERAGE, MEDICARE, MEDICAID, AND REVENUES 

Subtitle A—Coverage 

Sec. 1001. Affordability. 

Sec. 1002. Individual responsibility. 

Sec. 1003. Employer responsibility. 

Sec. 1004. Income definitions. 

Sec. 1005. Implementation funding. 

Subtitle B—Medicare 

Sec. 1101. Closing the medicare prescription drug ‘‘donut hole’’. 

Sec. 1102. Medicare Advantage payments. 

Sec. 1103. Savings from limits on MA plan administrative costs. 

Sec. 1104. Disproportionate share hospital (DSH) payments. 

Sec. 1105. Market basket updates. 

Sec. 1106. Physician ownership-referral. 

Sec. 1107. Payment for imaging services. 

Subtitle C—Medicaid 

Sec. 1201. Federal funding for States. 

Sec. 1202. Payments to primary care physicians. 

Sec. 1203. Disproportionate share hospital payments. 

Sec. 1204. Funding for the territories. 

Sec. 1205. Delay in Community First Choice option. 

Sec. 1206. Drug rebates for new formulations of existing drugs. 

Subtitle D—Reducing Fraud, Waste, and Abuse 

Sec. 1301. Community mental health centers. 

Sec. 1302. Medicare prepayment medical review limitations . 

Sec. 1303. CMS–IRS data match to identify fraudulent providers. 

Sec. 1304. Funding to fight fraud, waste, and abuse. 

Sec. 1305. 90-day period of enhanced oversight for initial claims of DME suppliers. 

Subtitle E—Provisions Relating to Revenue 

Sec. 1401. High-cost plan excise tax. 

Sec. 1402. Medicare tax. 

Sec. 1403. Delay of limitation on health flexible spending arrangements under cafeteria plans. 

Sec. 1404. Brand name pharmaceuticals. 

Sec. 1405. Excise tax on medical device manufacturers. 

Sec. 1406. Health insurance providers. 

Sec. 1407. Delay of elimination of deduction for expenses allocable to medicare part 

D subsidy. 

Sec. 1408. Elimination of unintended application of cellulosic biofuel producer credit. 

Sec. 1409. Codification of economic substance doctrine and penalties. 

Sec. 1410. Time for payment of corporate estimated taxes. 

Sec. 1411. No impact on Social Security trust funds. 

Subtitle F—Other Provisions 

Sec. 1501. Community college and career training grant program. 


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TITLE II—EDUCATION AND HEALTH 

Subtitle A—Education 

Sec. 2001. Short title; references. 

PART I—INVESTING IN STUDENTS AND FAMILIES

Sec. 2101. Federal Pell Grants. 

Sec. 2102. Student financial assistance. 

Sec. 2103. College access challenge grant program. 

Sec. 2104. Investment in historically black colleges and universities and minorityserving institutions. 

PART II—STUDENT LOAN REFORM

Sec. 2201. Termination of Federal Family Education Loan appropriations. 

Sec. 2202. Termination of Federal loan insurance program. 

Sec. 2203. Termination of applicable interest rates. 

Sec. 2204. Termination of Federal payments to reduce student interest costs. 

Sec. 2205. Termination of FFEL PLUS Loans. 

Sec. 2206. Federal Consolidation Loans. 

Sec. 2207. Termination of Unsubsidized Stafford Loans for middle-income bor- rowers. Sec. 2208. Termination of special allowances. 

Sec. 2209. Origination of Direct Loans at institutions outside the United States. 

Sec. 2210. Conforming amendments. 

Sec. 2211. Terms and conditions of loans. 

Sec. 2212. Contracts; mandatory funds. 

Sec. 2213. Agreements with State-owned banks. 

Sec. 2214. Income-based repayment. 

Subtitle B—Health 

Sec. 2301. Insurance reforms. 

Sec. 2302. Drugs purchased by covered entities. 

Sec. 2303. Community health centers. 

TITLE I—COVERAGE, MEDICARE, 

MEDICAID, AND REVENUES 

Subtitle A—Coverage 

SEC. 1001. AFFORDABILITY. 

(a) PREMIUM TAX CREDITS.—Section 36B of the Internal Revenue 

Code of 1986, as added by section 1401 of the Patient Protection 

and Affordable Care Act and amended by section 10105 of such 

Act, is amended— 

(1) in subsection (b)(3)(A)— 

(A) in clause (i), by striking ‘‘with respect to any taxpayer’’ and all that follows up to the end period and inserting ‘‘for any taxable year shall be the percentage such that 

the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear 

manner, from the initial premium percentage to the final 

premium percentage specified in such table for such income tier: 

‘‘In the case of household income (expressed as a percent 

of poverty line) within the following income tier: The initial premium percentage is— The final premium percentage is— 

Up to 133% 2.0% 2.0% 

133% up to 150% 3.0% 4.0% 

150% up to 200% 4.0% 6.3% 

200% up to 250% 6.3% 8.05% 


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‘‘In the case of household income (expressed as a percent 

of poverty line) within the following income tier: The initial premium percentage is— The final premium percentage is— 

250% up to 300% 8.05% 9.5% 

300% up to 400% 9.5% 9.5%’’; and 

(B) by striking clauses (ii) and (iii), and inserting the following: 

‘‘(ii) INDEXING.— ‘‘(I) IN GENERAL.—Subject to subclause (II), in 

the case of taxable years beginning in any calendar year after 2014, the initial and final applicable percentages under clause (i) (as in effect for 

the preceding calendar year after application of 

this clause) shall be adjusted to reflect the excess 

of the rate of premium growth for the preceding 

calendar year over the rate of income growth for 

the preceding calendar year. 

‘‘(II) ADDITIONAL ADJUSTMENT.—Except as provided in subclause (III), in the case of any calendar year after 2018, the percentages described 

in subclause (I) shall, in addition to the adjustment under subclause (I), be adjusted to reflect 

the excess (if any) of the rate of premium growth 

estimated under subclause (I) for the preceding 

calendar year over the rate of growth in the consumer price index for the preceding calendar year. 

‘‘(III) FAILSAFE.—Subclause (II) shall apply for 

any calendar year only if the aggregate amount of 

premium tax credits under this section and costsharing reductions under section 1402 of the Patient Protection and Affordable Care Act for the 

preceding calendar year exceeds an amount equal 

to 0.504 percent of the gross domestic product for 

the preceding calendar year.’’; and 

(2) in subsection (c)(2)(C)— 

(A) by striking ‘‘9.8 percent’’ in clauses (i)(II) and (iv) 

and inserting ‘‘9.5 percent’’, and 

(B) by striking ‘‘(b)(3)(A)(iii)’’ in clause (iv) and inserting 

‘‘(b)(3)(A)(ii)’’. 

(b) COST SHARING.—Section 1402(c) of the Patient Protection and 

Affordable Care Act is amended— 

(1) in paragraph (1)(B)(i)— 

(A) in subclause (I), by striking ‘‘90’’ and inserting ‘‘94’’; 

(B) in subclause (II)— 

(i) by striking ‘‘80’’ and inserting ‘‘87’’; and 

(ii) by striking ‘‘and’’; and 

(C) by striking subclause (III) and inserting the following: 

‘‘(III) 73 percent in the case of an eligible insured whose household income is more than 200 

percent but not more than 250 percent of the poverty line for a family of the size involved; and 

‘‘(IV) 70 percent in the case of an eligible insured whose household income is more than 250 

percent but not more than 400 percent of the poverty line for a family of the size involved.’’; and 


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(2) in paragraph (2)— 

(A) in subparagraph (A)— 

(i) by striking ‘‘90’’ and inserting ‘‘94’’; and 

(ii) by striking ‘‘and’’; 

(B) in subparagraph (B)— 

(i) by striking ‘‘80’’ and inserting ‘‘87’’; and 

(ii) by striking the period and inserting ‘‘; and’’; and 

(C) by inserting after subparagraph (B) the following 

new subparagraph: 

‘‘(C) in the case of an eligible insured whose household 

income is more than 200 percent but not more than 250 

percent of the poverty line for a family of the size involved, 

increase the plan’s share of the total allowed costs of benefits provided under the plan to 73 percent of such costs.’’. 

SEC. 1002. INDIVIDUAL RESPONSIBILITY. 

(a) AMOUNTS.—Section 5000A(c) of the Internal Revenue Code of 

1986, as added by section 1501(b) of the Patient Protection and Affordable Care Act and amended by section 10106 of such Act, is 

amended— 

(1) in paragraph (2)(B)— 

(A) in the matter preceding clause (i), by— 

(i) inserting ‘‘the excess of’’ before ‘‘the taxpayer’s 

household income’’; and 

(ii) inserting ‘‘for the taxable year over the amount 

of gross income specified in section 6012(a)(1) with respect to the taxpayer’’ before ‘‘for the taxable year’’; 

(B) in clause (i), by striking ‘‘0.5’’ and inserting ‘‘1.0’’; 

(C) in clause (ii), by striking ‘‘1.0’’ and inserting ‘‘2.0’’; 

and 

(D) in clause (iii), by striking ‘‘2.0’’ and inserting ‘‘2.5’’; 

and 

(2) in paragraph (3)— 

(A) in subparagraph (A), by striking ‘‘$750’’ and inserting ‘‘$695’’; 

(B) in subparagraph (B), by striking ‘‘$495’’ and inserting ‘‘$325’’; and 

(C) in subparagraph (D)— 

(i) in the matter preceding clause (i), by striking 

‘‘$750’’ and inserting ‘‘$695’’; and 

(ii) in clause (i), by striking ‘‘$750’’ and inserting 

‘‘$695’’. 

(b) THRESHOLD.—Section 5000A of such Code, as so added and 

amended, is amended— 

(1) by striking subsection (c)(4)(D); and 

(2) in subsection (e)(2)— 

(A) by striking ‘‘UNDER 100 PERCENT OF POVERTY LINE’’ 

and inserting ‘‘BELOW FILING THRESHOLD’’; and 

(B) by striking all that follows ‘‘less than’’ and inserting 

‘‘the amount of gross income specified in section 6012(a)(1) 

with respect to the taxpayer.’’. 

SEC. 1003. EMPLOYER RESPONSIBILITY. 

(a) PAYMENT CALCULATION.—Subparagraph (D) of subsection 

(d)(2) of section 4980H of the Internal Revenue Code of 1986, as 

added by section 1513 of the Patient Protection and Affordable 


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Care Act and amended by section 10106 of such Act, is amended 

to read as follows: 

‘‘(D) APPLICATION OF EMPLOYER SIZE TO ASSESSABLE PENALTIES.— 

‘‘(i) IN GENERAL.—The number of individuals employed by an applicable large employer as full-time 

employees during any month shall be reduced by 30 

solely for purposes of calculating— 

‘‘(I) the assessable payment under subsection 

(a), or 

‘‘(II) the overall limitation under subsection 

(b)(2). 

‘‘(ii) AGGREGATION.—In the case of persons treated 

as 1 employer under subparagraph (C)(i), only 1 reduction under subclause (I) or (II) shall be allowed with 

respect to such persons and such reduction shall be allocated among such persons ratably on the basis of the 

number of full-time employees employed by each such 

person.’’. 

(b) APPLICABLE PAYMENT AMOUNT.—Section 4980H of such Code, 

as so added and amended, is amended— 

(1) in the flush text following subsection (c)(1)(B), by striking 

‘‘400 percent of the applicable payment amount’’ and inserting 

‘‘an amount equal to 1⁄12 of $3,000’’; 

(2) in subsection (d)(1), by striking ‘‘$750’’ and inserting 

‘‘$2,000’’; and 

(3) in subsection (d)(5)(A), in the matter preceding clause (i), 

by striking ‘‘subsection (b)(2) and (d)(1)’’ and inserting ‘‘subsection (b) and paragraph (1)’’. 

(c) COUNTING PART-TIME WORKERS IN SETTING THE THRESHOLD

FOR EMPLOYER RESPONSIBILITY.—Section 4980H(d)(2) of such Code, 

as so added and amended and as amended by subsection (a), is 

amended by adding at the end the following new subparagraph: 

‘‘(E) FULL-TIME EQUIVALENTS TREATED AS FULL-TIME EMPLOYEES.—Solely for purposes of determining whether an 

employer is an applicable large employer under this paragraph, an employer shall, in addition to the number of fulltime employees for any month otherwise determined, include for such month a number of full-time employees determined by dividing the aggregate number of hours of 

service of employees who are not full-time employees for 

the month by 120.’’. 

(d) ELIMINATING WAITING PERIOD ASSESSMENT.—Section 4980H 

of such Code, as so added and amended and as amended by the 

preceding subsections, is amended by striking subsection (b) and 

redesignating subsections (c), (d), and (e) as subsections (b), (c), and 

(d), respectively. 

SEC. 1004. INCOME DEFINITIONS. 

(a) MODIFIED ADJUSTED GROSS INCOME.— 

(1) IN GENERAL.—The following provisions of the Internal 

Revenue Code of 1986 are each amended by striking ‘‘modified 

gross’’ each place it appears and inserting ‘‘modified adjusted 

gross’’: 


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(A) Clauses (i) and (ii) of section 36B(d)(2)(A), as added 

by section 1401 of the Patient Protection and Affordable 

Care Act. 

(B) Section 6103(l)(21)(A)(iv), as added by section 1414 of 

such Act. 

(C) Clauses (i) and (ii) of section 5000A(c)(4), as added 

by section 1501(b) of such Act. 

(2) DEFINITION.— (A) Section 36B(d)(2)(B) of such Code, as so added, is 

amended to read as follows: 

‘‘(B) MODIFIED ADJUSTED GROSS INCOME.—The term 

‘modified adjusted gross income’ means adjusted gross income increased by— 

‘‘(i) any amount excluded from gross income under 

section 911, and 

‘‘(ii) any amount of interest received or accrued by 

the taxpayer during the taxable year which is exempt 

from tax.’’. 

(B) Section 5000A(c)(4)(C) of such Code, as so added, is 

amended to read as follows: 

‘‘(C) MODIFIED ADJUSTED GROSS INCOME.—The term 

‘modified adjusted gross income’ means adjusted gross income increased by— 

‘‘(i) any amount excluded from gross income under 

section 911, and 

‘‘(ii) any amount of interest received or accrued by 

the taxpayer during the taxable year which is exempt 

from tax.’’. 

(b) MODIFIED ADJUSTED GROSS INCOME DEFINITION.— (1) MEDICAID.—Section 1902 of the Social Security Act (42 

U.S.C. 1396a) is amended by striking ‘‘modified gross income’’ 

each place it appears in the text and headings of the following 

provisions and inserting ‘‘modified adjusted gross income’’: 

(A) Paragraph (14) of subsection (e), as added by section 

2002(a) of the Patient Protection and Affordable Care Act. 

(B) Subsection (gg)(4)(A), as added by section 2001(b) of 

such Act. 

(2) CHIP.— (A) STATE PLAN REQUIREMENTS.—Section 2102(b)(1)(B)(v) 

of the Social Security Act (42 U.S.C. 1397bb(b)(1)(B)(v)), as 

added by section 2101(d)(1) of the Patient Protection and 

Affordable Care Act, is amended by striking ‘‘modified 

gross income’’ and inserting ‘‘modified adjusted gross income’’. 

(B) PLAN ADMINISTRATION.—Section 2107(e)(1)(E) of the 

Social Security Act (42 U.S.C. 1397gg(e)(1)(E)), as added 

by section 2101(d)(2) of the Patient Protection and Affordable Care Act, is amended by striking ‘‘modified gross income’’ and inserting ‘‘modified adjusted gross income’’. 

(c) NO EXCESS PAYMENTS.—Section 36B(f) of the Internal Revenue Code of 1986, as added by section 1401(a) of the Patient Protection and Affordable Care Act, is amended by adding at the end 

the following new paragraph: 

‘‘(3) INFORMATION REQUIREMENT.—Each Exchange (and any 

other person specified by the Secretary) shall provide the folVerDate Nov 24 2008 07:33 Mar 21, 2010 Jkt 089008 PO 00000 Frm 00028 Fmt 6659 Sfmt 6602 E:\HR\OC\HR448.XXX HR448

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lowing information to the Secretary and to the taxpayer with 

respect to any health plan provided through the Exchange: 

‘‘(A) The level of coverage described in section 1302(d) of 

the Patient Protection and Affordable Care Act and the period such coverage was in effect. 

‘‘(B) The total premium for the coverage without regard 

to the credit under this section or cost-sharing reductions 

under section 1402 of such Act. 

‘‘(C) The aggregate amount of any advance payment of 

such credit or reductions under section 1412 of such Act. 

‘‘(D) The name, address, and TIN of the primary insured 

and the name and TIN of each other individual obtaining 

coverage under the policy. 

‘‘(E) Any information provided to the Exchange, including any change of circumstances, necessary to determine 

eligibility for, and the amount of, such credit. 

‘‘(F) Any other similar information necessary to carry out 

this subsection and determine whether a taxpayer has received excess advance payments.’’. 

(d) ADULT DEPENDENTS.— (1) EXCLUSION OF AMOUNTS EXPENDED FOR MEDICAL CARE.— The first sentence of section 105(b) of the Internal Revenue 

Code of 1986 (relating to amounts expended for medical care) 

is amended— 

(A) by striking ‘‘and his dependents’’ and inserting ‘‘his 

dependents’’; and 

(B) by inserting before the period the following: ‘‘, and 

any child (as defined in section 152(f)(1)) of the taxpayer 

who as of the end of the taxable year has not attained age 

27’’. 

(2) SELF-EMPLOYED HEALTH INSURANCE DEDUCTION.—Section 

162(l)(1) of such Code is amended to read as follows: 

‘‘(1) ALLOWANCE OF DEDUCTION.—In the case of a taxpayer 

who is an employee within the meaning of section 401(c)(1), 

there shall be allowed as a deduction under this section an 

amount equal to the amount paid during the taxable year for 

insurance which constitutes medical care for— 

‘‘(A) the taxpayer, 

‘‘(B) the taxpayer’s spouse, 

‘‘(C) the taxpayer’s dependents, and 

‘‘(D) any child (as defined in section 152(f)(1)) of the taxpayer who as of the end of the taxable year has not attained age 27.’’. 

(3) CONFORMING AMENDMENTS.— 

(A) INTERNAL REVENUE CODE.—Section 162(l)(2)(B) of 

such Code is amended by inserting ‘‘, or any dependent, or 

individual described in subparagraph (D) of paragraph (1) 

with respect to,’’ after ‘‘spouse of’’. 

(B) PUBLIC HEALTH SERVICE ACT.—Section 2714 of the 

Public Health Service Act, as added by section 1001(5) of 

the Patient Protection and Affordable Care Act, is amended by striking subsection (c). 

(4) SICK AND ACCIDENT BENEFITS PROVIDED TO MEMBERS OF

A VOLUNTARY EMPLOYEES’ BENEFICIARY ASSOCIATION AND THEIR

DEPENDENTS.—Section 501(c)(9) of such Code is amended by 


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adding at the end the following new sentence: ‘‘For purposes of 

providing for the payment of sick and accident benefits to 

members of such an association and their dependents, the term 

‘dependent’ shall include any individual who is a child (as defined in section 152(f)(1)) of a member who as of the end of the 

calendar year has not attained age 27.’’. 

(5) MEDICAL AND OTHER BENEFITS FOR RETIRED EMPLOYEES.—Section 401(h) of such Code is amended by adding at the 

end the following: ‘‘For purposes of this subsection, the term 

‘dependent’ shall include any individual who is a child (as defined in section 152(f)(1)) of a retired employee who as of the 

end of the calendar year has not attained age 27.’’. 

(e) FIVE PERCENT INCOME DISREGARD FOR CERTAIN INDIVIDUALS.—Section 1902(e)(14) of the Social Security Act (42 U.S.C. 

1396a(e)(14)), as amended by subsection (b)(1), is further amended— 

(1) in subparagraph (B), by striking ‘‘No type’’ and inserting 

‘‘Subject to subparagraph (I), no type’’; and 

(2) by adding at the end the following new subparagraph: 

‘‘(I) TREATMENT OF PORTION OF MODIFIED ADJUSTED

GROSS INCOME.—For purposes of determining the income 

eligibility of an individual for medical assistance whose eligibility is determined based on the application of modified 

adjusted gross income under subparagraph (A), the State 

shall— 

‘‘(i) determine the dollar equivalent of the difference 

between the upper income limit on eligibility for such 

an individual (expressed as a percentage of the poverty line) and such upper income limit increased by 5 

percentage points; and 

‘‘(ii) notwithstanding the requirement in subparagraph (A) with respect to use of modified adjusted 

gross income, utilize as the applicable income of such 

individual, in determining such income eligibility, an 

amount equal to the modified adjusted gross income 

applicable to such individual reduced by such dollar 

equivalent amount.’’. 

SEC. 1005. IMPLEMENTATION FUNDING. 

(a) IN GENERAL.—There is hereby established a Health Insurance 

Reform Implementation Fund (referred to in this section as the 

‘‘Fund’’) within the Department of Health and Human Services to 

carry out the Patient Protection and Affordable Care Act and this 

Act (and the amendments made by such Acts). 

(b) FUNDING.—There is appropriated to the Fund, out of any 

funds in the Treasury not otherwise appropriated, $1,000,000,000 

for Federal administrative expenses to carry out such Act (and the 

amendments made by such Acts). 

Subtitle B—Medicare 

SEC. 1101. CLOSING THE MEDICARE PRESCRIPTION DRUG ‘‘DONUT 

HOLE’’. 

(a) COVERAGE GAP REBATE FOR 2010.— 


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(1) IN GENERAL.—Section 1860D–42 of the Social Security 

Act (42 U.S.C. 1395w–152) is amended by adding at the end 

the following new subsection: 

‘‘(c) COVERAGE GAP REBATE FOR 2010.— 

‘‘(1) IN GENERAL.—In the case of an individual described in 

subparagraphs (A) through (D) of section 1860D–14A(g)(1) who 

as of the last day of a calendar quarter in 2010 has incurred 

costs for covered part D drugs so that the individual has exceeded the initial coverage limit under section 1860D–2(b)(3) 

for 2010, the Secretary shall provide for payment from the 

Medicare Prescription Drug Account of $250 to the individual 

by not later than the 15th day of the third month following the 

end of such quarter. 

‘‘(2) LIMITATION.—The Secretary shall provide only 1 payment under this subsection with respect to any individual.’’. 

(2) REPEAL OF PROVISION.—Section 3315 of the Patient Protection and Affordable Care Act (including the amendments 

made by such section) is repealed, and any provision of law 

amended or repealed by such sections is hereby restored or revived as if such section had not been enacted into law. 

(b) CLOSING THE DONUT HOLE.—Part D of title XVIII of the Social Security Act (42 U.S.C. 1395w–101 et seq.), as amended by section 3301 of the Patient Protection and Affordable Care Act, is further amended— 

(1) in section 1860D–43— 

(A) in subsection (b), by striking ‘‘July 1, 2010’’ and inserting ‘‘January 1, 2011’’; and 

(B) in subsection (c)(2), by striking ‘‘July 1, 2010, and 

ending on December 31, 2010,’’ and inserting ‘‘January 1, 

2011, and December 31, 2011,’’; 

(2) in section 1860D–14A— 

(A) in subsection (a)— 

(i) by striking ‘‘July 1, 2010’’ and inserting ‘‘January 

1, 2011’’; and 

(ii) by striking ‘‘April 1, 2010’’ and inserting ‘‘180 

days after the date of the enactment of this section’’; 

(B) in subsection (b)(1)(C)— 

(i) in the heading, by striking ‘‘2010 AND’’; 

(ii) by striking ‘‘July 1, 2010’’ and inserting ‘‘January 

1, 2011’’; and 

(iii) by striking ‘‘May 1, 2010’’ and inserting ‘‘not 

later than 30 days after the date of the establishment 

of a model agreement under subsection (a)’’; 

(C) in subsection (c)— 

(i) in paragraph (1)(A)(iii), by striking ‘‘July 1, 2010, 

and ending on December 31, 2011’’ and inserting ‘‘January 1, 2011, and ending on December 31, 2011’’; and 

(ii) in paragraph (2), by striking ‘‘2010’’ and inserting ‘‘2011’’; 

(D) in subsection (d)(2)(B), by striking ‘‘July 1, 2010, and 

ending on December 31, 2010’’ and inserting ‘‘January 1, 

2011, and ending on December 31, 2011’’; and 

(E) in subsection (g)(1)— 


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(i) in the matter before subparagraph (A), by striking ‘‘an applicable drug’’ and inserting ‘‘a covered part 

D drug’’; 

(ii) by adding ‘‘and’’ at the end of subparagraph (C); 

(iii) by striking subparagraph (D); and 

(iv) by redesignating subparagraph (E) as subparagraph (D); and 

(3) in section 1860D–2(b) — 

(A) in paragraph (2)(A), by striking ‘‘The coverage’’ and 

inserting ‘‘Subject to subparagraphs (C) and (D), the coverage’’; 

(B) in paragraph (2)(B), by striking ‘‘subparagraph 

(A)(ii)’’ and inserting ‘‘subparagraphs (A)(ii), (C), and (D)’’; 

(C) by adding at the end of paragraph (2) the following 

new subparagraphs: 

‘‘(C) COVERAGE FOR GENERIC DRUGS IN COVERAGE GAP.— ‘‘(i) IN GENERAL.—Except as provided in paragraph 

(4), the coverage for an applicable beneficiary (as defined in section 1860D–14A(g)(1)) has coinsurance (for 

costs above the initial coverage limit under paragraph 

(3) and below the out-of-pocket threshold) for covered 

part D drugs that are not applicable drugs under section 1860D–14A(g)(2) that is— 

‘‘(I) equal to the generic-gap coinsurance percentage (specified in clause (ii)) for the year, or 

‘‘(II) actuarially equivalent (using processes and 

methods established under section 1860D–11(c)) to 

an average expected payment of such percentage 

of such costs for covered part D drugs that are not 

applicable drugs under section 1860D–14A(g)(2). 

‘‘(ii) GENERIC-GAP COINSURANCE PERCENTAGE.—The 

generic-gap coinsurance percentage specified in this 

clause for— 

‘‘(I) 2011 is 93 percent; 

‘‘(II) 2012 and each succeeding year before 2020 

is the generic-gap coinsurance percentage under 

this clause for the previous year decreased by 7 

percentage points; and 

‘‘(III) 2020 and each subsequent year is 25 percent. 

‘‘(D) COVERAGE FOR APPLICABLE DRUGS IN COVERAGE

GAP.— 

‘‘(i) IN GENERAL.—Except as provided in paragraph 

(4), the coverage for an applicable beneficiary (as defined in section 1860D–14A(g)(1)) has coinsurance (for 

costs above the initial coverage limit under paragraph 

(3) and below the out-of-pocket threshold) for the negotiated price (as defined in section 1860D–14A(g)(6)) of 

covered part D drugs that are applicable drugs under 

section 1860D–14A(g)(2) that is— 

‘‘(I) equal to the difference between the applicable gap percentage (specified in clause (ii) for the 

year) and the discount percentage specified in section 1860D–14A(g)(4)(A) for such applicable drugs, 

or 


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‘‘(II) actuarially equivalent (using processes and 

methods established under section 1860D–11(c)) to 

an average expected payment of such percentage 

of such costs, for covered part D drugs that are 

applicable drugs under section 1860D–14A(g)(2). 

‘‘(ii) APPLICABLE GAP PERCENTAGE.—The applicable 

gap percentage specified in this clause for— 

‘‘(I) 2013 and 2014 is 97.5 percent; 

‘‘(II) 2015 and 2016 is 95 percent; 

‘‘(III) 2017 is 90 percent; 

‘‘(IV) 2018 is 85 percent; 

‘‘(V) 2019 is 80 percent; and 

‘‘(VI) 2020 and each subsequent year is 75 percent.’’; 

(D) in paragraph (3)(A), as restored under subsection 

(a)(2), by striking ‘‘paragraph (4)’’ and inserting ‘‘paragraphs (2)(C), (2)(D), and (4)’’; 

(E) in paragraph (4)(E), by inserting before the period at 

the end the following: ‘‘, except that incurred costs shall 

not include the portion of the negotiated price that represents the reduction in coinsurance resulting from the application of paragraph (2)(D)’’; and 

(4) in section 1860D–22(a)(2)(A), by inserting before the period at the end the following: ‘‘, not taking into account the 

value of any discount or coverage provided during the gap in 

prescription drug coverage that occurs between the initial coverage limit under section 1860D–2(b)(3) during the year and 

the out-of-pocket threshold specified in section 1860D– 

2(b)(4)(B)’’. 

(c) CONFORMING AMENDMENT TO AMP UNDER MEDICAID.—Section 1927(k)(1)(B)(i) of the Social Security Act (42 U.S.C. 1396r– 

8(k)(1)(B)(i)), as amended by section 2503(a)(2)(B) of the Patient 

Protection and Affordable Care Act, is amended— 

(1) by striking ‘‘and’’ at the end of subclause (III); 

(2) by striking the period at the end of subclause (IV); and 

(3) by adding at the end the following new subclause: 

‘‘(V) discounts provided by manufacturers under 

section 1860D–14A.’’. 

SEC. 1102. MEDICARE ADVANTAGE PAYMENTS. 

(a) REPEAL.—Effective as if included in the enactment of the Patient Protection and Affordable Care Act, sections 3201 and 3203 

of such Act (and the amendments made by such sections) are repealed. 

(b) PHASE-IN OF MODIFIED BENCHMARKS.—Section 1853 of the 

Social Security Act (42 U.S.C. 1395w–23) is amended— 

(1) in subsection (j)(1)(A), by striking ‘‘(or, beginning with 

2007, 1⁄12 of the applicable amount determined under subsection (k)(1)) for the area for the year’’ and inserting ‘‘ for the 

area for the year (or, for 2007, 2008, 2009, and 2010, 1⁄12 of the 

applicable amount determined under subsection (k)(1) for the 

area for the year; for 2011, 1⁄12 of the applicable amount determined under subsection (k)(1) for the area for 2010; and, beginning with 2012, 1⁄12 of the blended benchmark amount determined under subsection (n)(1) for the area for the year)’’; and 

(2) by adding at the end the following new subsection: 


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‘‘(n) DETERMINATION OF BLENDED BENCHMARK AMOUNT.— 

‘‘(1) IN GENERAL.—For purposes of subsection (j), subject to 

paragraphs (3), (4), and (5), the term ‘blended benchmark 

amount’ means for an area— 

‘‘(A) for 2012 the sum of— 

‘‘(i) 1⁄2 of the applicable amount for the area and 

year; and 

‘‘(ii) 1⁄2 of the amount specified in paragraph (2)(A) 

for the area and year; and 

‘‘(B) for a subsequent year the amount specified in paragraph (2)(A) for the area and year. 

‘‘(2) SPECIFIED AMOUNT.— 

‘‘(A) IN GENERAL.—The amount specified in this subparagraph for an area and year is the product of— 

‘‘(i) the base payment amount specified in subparagraph (E) for the area and year adjusted to take into 

account the phase-out in the indirect costs of medical 

education from capitation rates described in subsection 

(k)(4); and 

‘‘(ii) the applicable percentage for the area for the 

year specified under subparagraph (B). 

‘‘(B) APPLICABLE PERCENTAGE.—Subject to subparagraph 

(D), the applicable percentage specified in this subparagraph for an area for a year in the case of an area that 

is ranked— 

‘‘(i) in the highest quartile under subparagraph (C) 

for the previous year is 95 percent; 

‘‘(ii) in the second highest quartile under such subparagraph for the previous year is 100 percent; 

‘‘(iii) in the third highest quartile under such subparagraph for the previous year is 107.5 percent; or 

‘‘(iv) in the lowest quartile under such subparagraph 

for the previous year is 115 percent. 

‘‘(C) PERIODIC RANKING.—For purposes of this paragraph 

in the case of an area located— 

‘‘(i) in 1 of the 50 States or the District of Columbia, 

the Secretary shall rank such area in each year specified under subsection (c)(1)(D)(ii) based upon the level 

of the amount specified in subparagraph (A)(i) for such 

areas; or 

‘‘(ii) in a territory, the Secretary shall rank such 

areas in each such year based upon the level of the 

amount specified in subparagraph (A)(i) for such area 

relative to quartile rankings computed under clause 

(i). 

‘‘(D) 1-YEAR TRANSITION FOR CHANGES IN APPLICABLE

PERCENTAGE.—If, for a year after 2012, there is a change 

in the quartile in which an area is ranked compared to the 

previous year, the applicable percentage for the area in the 

year shall be the average of— 

‘‘(i) the applicable percentage for the area for the 

previous year; and 

‘‘(ii) the applicable percentage that would otherwise 

apply for the area for the year. 


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‘‘(E) BASE PAYMENT AMOUNT.—Subject to subparagraph 

(F), the base payment amount specified in this subparagraph— 

‘‘(i) for 2012 is the amount specified in subsection 

(c)(1)(D) for the area for the year; or 

‘‘(ii) for a subsequent year that— 

‘‘(I) is not specified under subsection (c)(1)(D)(ii), 

is the base amount specified in this subparagraph 

for the area for the previous year, increased by 

the national per capita MA growth percentage, described in subsection (c)(6) for that succeeding 

year, but not taking into account any adjustment 

under subparagraph (C) of such subsection for a 

year before 2004; and 

‘‘(II) is specified under subsection (c)(1)(D)(ii), is 

the amount specified in subsection (c)(1)(D) for the 

area for the year. 

‘‘(F) APPLICATION OF INDIRECT MEDICAL EDUCATION

PHASE-OUT.—The base payment amount specified in subparagraph (E) for a year shall be adjusted in the same 

manner under paragraph (4) of subsection (k) as the applicable amount is adjusted under such subsection. 

‘‘(3) ALTERNATIVE PHASE-INS.— ‘‘(A) 4-YEAR PHASE-IN FOR CERTAIN AREAS.—If the difference between the applicable amount (as defined in subsection (k)) for an area for 2010 and the projected 2010 

benchmark amount (as defined in subparagraph (C)) for 

the area is at least $30 but less than $50, the blended 

benchmark amount for the area is— 

‘‘(i) for 2012 the sum of— 

‘‘(I) 3⁄4 of the applicable amount for the area and 

year; and 

‘‘(II) 1⁄4 of the amount specified in paragraph 

(2)(A) for the area and year; 

‘‘(ii) for 2013 the sum of— 

‘‘(I) 1⁄2 of the applicable amount for the area and 

year; and 

‘‘(II) 1⁄2 of the amount specified in paragraph 

(2)(A) for the area and year; 

‘‘(iii) for 2014 the sum of— 

‘‘(I) 1⁄4 of the applicable amount for the area and 

year; and 

‘‘(II) 3⁄4 of the amount specified in paragraph 

(2)(A) for the area and year; and 

‘‘(iv) for a subsequent year the amount specified in 

paragraph (2)(A) for the area and year. 

‘‘(B) 6-YEAR PHASE-IN FOR CERTAIN AREAS.—If the difference between the applicable amount (as defined in subsection (k)) for an area for 2010 and the projected 2010 

benchmark amount (as defined in subparagraph (C)) for 

the area is at least $50, the blended benchmark amount 

for the area is— 

‘‘(i) for 2012 the sum of— 

‘‘(I) 5⁄6 of the applicable amount for the area and 

year; and 


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‘‘(II) 1⁄6 of the amount specified in paragraph 

(2)(A) for the area and year; 

‘‘(ii) for 2013 the sum of— 

‘‘(I) 2⁄3 of the applicable amount for the area and 

year; and 

‘‘(II) 1⁄3 of the amount specified in paragraph 

(2)(A) for the area and year; 

‘‘(iii) for 2014 the sum of— 

‘‘(I) 1⁄2 of the applicable amount for the area and 

year; and 

‘‘(II) 1⁄2 of the amount specified in paragraph 

(2)(A) for the area and year; 

‘‘(iv) for 2015 the sum of— 

‘‘(I) 1⁄3 of the applicable amount for the area and 

year; and 

‘‘(II) 2⁄3 of the amount specified in paragraph 

(2)(A) for the area and year; and 

‘‘(v) for 2016 the sum of— 

‘‘(I) 1⁄6 of the applicable amount for the area and 

year; and 

‘‘(II) 5⁄6 of the amount specified in paragraph 

(2)(A) for the area and year; and 

‘‘(vi) for a subsequent year the amount specified in 

paragraph (2)(A) for the area and year. 

‘‘(C) PROJECTED 2010 BENCHMARK AMOUNT.—The projected 2010 benchmark amount described in this subparagraph for an area is equal to the sum of— 

‘‘(i) 1⁄2 of the applicable amount (as defined in subsection (k)) for the area for 2010; and 

‘‘(ii) 1⁄2 of the amount specified in paragraph (2)(A) 

for the area for 2010 but determined as if there were 

substituted for the applicable percentage specified in 

clause (ii) of such paragraph the sum of— 

‘‘(I) the applicable percent that would be specified under subparagraph (B) of paragraph (2) (determined without regard to subparagraph (D) of 

such paragraph) for the area for 2010 if any reference in such paragraph to ‘the previous year’ 

were deemed a reference to 2010; and 

‘‘(II) the applicable percentage increase that 

would apply to a qualifying plan in the area under 

subsection (o) as if any reference in such subsection to 2012 were deemed a reference to 2010 

and as if the determination of a qualifying county 

under paragraph (3)(B) of such subsection were 

made for 2010. 

‘‘(4) CAP ON BENCHMARK AMOUNT.—In no case shall the 

blended benchmark amount for an area for a year (determined 

taking into account subsection (o)) be greater than the applicable amount that would (but for the application of this subsection) be determined under subsection (k)(1) for the area for 

the year. 

‘‘(5) NON-APPLICATION TO PACE PLANS.—This subsection shall 

not apply to payments to a PACE program under section 

1894.’’. 


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(c) APPLICABLE PERCENTAGE QUALITY INCREASES.—Section 1853 

of such Act (42 U.S.C. 1395w–23), as amended by subsection (b), 

is amended— 

(1) in subsection (j), by inserting ‘‘subject to subsection (o),’’ 

after ‘‘For purposes of this part,’’; 

(2) in subsection (n)(2)(B), as added by subsection (b), by inserting ‘‘, subject to subsection (o)’’ after ‘‘as follows’’; and 

(3) by adding at the end the following new subsection: 

‘‘(o) APPLICABLE PERCENTAGE QUALITY INCREASES.— ‘‘(1) IN GENERAL.—Subject to the succeeding paragraphs, in 

the case of a qualifying plan with respect to a year beginning 

with 2012, the applicable percentage under subsection (n)(2)(B) 

shall be increased on a plan or contract level, as determined 

by the Secretary— 

‘‘(A) for 2012, by 1.5 percentage points; 

‘‘(B) for 2013, by 3.0 percentage points; and 

‘‘(C) for 2014 or a subsequent year, by 5.0 percentage 

points. 

‘‘(2) INCREASE FOR QUALIFYING PLANS IN QUALIFYING COUN- TIES.—The increase applied under paragraph (1) for a qualifying plan located in a qualifying county for a year shall be 

doubled. 

‘‘(3) QUALIFYING PLANS AND QUALIFYING COUNTY DEFINED; AP- PLICATION OF INCREASES TO LOW ENROLLMENT AND NEW

PLANS.—For purposes of this subsection: 

‘‘(A) QUALIFYING PLAN.— ‘‘(i) IN GENERAL.—The term ‘qualifying plan’ means, 

for a year and subject to paragraph (4), a plan that 

had a quality rating under paragraph (4) of 4 stars or 

higher based on the most recent data available for 

such year. 

‘‘(ii) APPLICATION OF INCREASES TO LOW ENROLLMENT

PLANS.— 

‘‘(I) 2012.—For 2012, the term ‘qualifying plan’ 

includes an MA plan that the Secretary determines is not able to have a quality rating under 

paragraph (4) because of low enrollment. 

‘‘(II) 2013 AND SUBSEQUENT YEARS.—For 2013 

and subsequent years, for purposes of determining 

whether an MA plan with low enrollment (as defined by the Secretary) is included as a qualifying 

plan, the Secretary shall establish a method to 

apply to MA plans with low enrollment (as defined 

by the Secretary) the computation of quality rating and the rating system under paragraph (4). 

‘‘(iii) APPLICATION OF INCREASES TO NEW PLANS.— 

‘‘(I) IN GENERAL.—A new MA plan that meets 

criteria specified by the Secretary shall be treated 

as a qualifying plan, except that in applying paragraph (1), the applicable percentage under subsection (n)(2)(B) shall be increased— 

‘‘(aa) for 2012, by 1.5 percentage points; 

‘‘(bb) for 2013, by 2.5 percentage points; and 

‘‘(cc) for 2014 or a subsequent year, by 3.5 

percentage points. 


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‘‘(II) NEW MA PLAN DEFINED.—The term ‘new 

MA plan’ means, with respect to a year, a plan offered by an organization or sponsor that has not 

had a contract as a Medicare Advantage organization in the preceding 3-year period. 

‘‘(B) QUALIFYING COUNTY.—The term ‘qualifying county’ 

means, for a year, a county— 

‘‘(i) that has an MA capitation rate that, in 2004, 

was based on the amount specified in subsection 

(c)(1)(B) for a Metropolitan Statistical Area with a 

population of more than 250,000; 

‘‘(ii) for which, as of December 2009, of the Medicare 

Advantage eligible individuals residing in the county 

at least 25 percent of such individuals were enrolled 

in Medicare Advantage plans; and 

‘‘(iii) that has per capita fee-for-service spending 

that is lower than the national monthly per capita cost 

for expenditures for individuals enrolled under the 

original medicare fee-for-service program for the year. 

‘‘(4) QUALITY DETERMINATIONS FOR APPLICATION OF IN- CREASE.— 

‘‘(A) QUALITY DETERMINATION.—The quality rating for a 

plan shall be determined according to a 5-star rating system (based on the data collected under section 1852(e)). 

‘‘(B) PLANS THAT FAILED TO REPORT.—An MA plan which 

does not report data that enables the Secretary to rate the 

plan for purposes of this paragraph shall be counted as 

having a rating of fewer than 3.5 stars. 

‘‘(5) EXCEPTION FOR PACE PLANS.—This subsection shall not 

apply to payments to a PACE program under section 1894.’’. 

(4) DETERMINATION OF MEDICARE PART D LOW-INCOME BENCHMARK PREMIUM.—Section 1860D–14(b)(2)(B)(iii) of the Social 

Security Act (42 U.S.C. 1395w–114(b)(2)(B)(iii)) as amended by 

section 3302 of the Patient Protection and Affordable Care Act, 

is amended by striking ‘‘, determined without regard to any reduction in such premium as a result of any beneficiary rebate 

under section 1854(b)(1)(C) or bonus payment under section 

1853(n)’’ and inserting the following: ‘‘and determined before 

the application of the monthly rebate computed under section 

1854(b)(1)(C)(i) for that plan and year involved and, in the case 

of a qualifying plan, before the application of the increase 

under section 1853(o) for that plan and year involved’’. 

(d) BENEFICIARY REBATES.—Section 1854(b)(1)(C) of such Act (42 

U.S.C. 1395w–24(b)(1)(C)), as amended by section 3202(b) of the 

Patient Protection and Affordable Care Act, is further amended— 

(1) in clause (i), by inserting ‘‘(or the applicable rebate percentage specified in clause (iii) in the case of plan years beginning on or after January 1, 2012)’’ after ‘‘75 percent’’; and 

(2) by striking clause (iii), by redesignating clauses (iv) and 

(v) as clauses (vii) and (viii), respectively, and by inserting 

after clause (ii) the following new clauses: 

‘‘(iii) APPLICABLE REBATE PERCENTAGE.—The applicable rebate percentage specified in this clause for a 

plan for a year, based on the system under section 

1853(o)(4)(A), is the sum of— 


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‘‘(I) the product of the old phase-in proportion 

for the year under clause (iv) and 75 percent; and 

‘‘(II) the product of the new phase-in proportion 

for the year under clause (iv) and the final applicable rebate percentage under clause (v). 

‘‘(iv) OLD AND NEW PHASE-IN PROPORTIONS.—For 

purposes of clause (iv)— 

‘‘(I) for 2012, the old phase-in proportion is 2⁄3

and the new phase-in proportion is 1⁄3; 

‘‘(II) for 2013, the old phase-in proportion is 1⁄3

and the new phase-in proportion is 2⁄3; and 

‘‘(III) for 2014 and any subsequent year, the old 

phase-in proportion is 0 and the new phase-in proportion is 1. 

‘‘(v) FINAL APPLICABLE REBATE PERCENTAGE.—Subject to clause (vi), the final applicable rebate percentage under this clause is— 

‘‘(I) in the case of a plan with a quality rating 

under such system of at least 4.5 stars, 70 percent; 

‘‘(II) in the case of a plan with a quality rating 

under such system of at least 3.5 stars and less 

than 4.5 stars, 65 percent; and 

‘‘(III) in the case of a plan with a quality rating 

under such system of less than 3.5 stars, 50 percent. 

‘‘(vi) TREATMENT OF LOW ENROLLMENT AND NEW

PLANS.—For purposes of clause (v)— 

‘‘(I) for 2012, in the case of a plan described in 

subclause (I) of subsection (o)(3)(A)(ii), the plan 

shall be treated as having a rating of 4.5 stars; 

and 

‘‘(II) for 2012 or a subsequent year, in the case 

of a new MA plan (as defined under subclause 

(III) of subsection (o)(3)(A)(iii))) that is treated as 

a qualifying plan pursuant to subclause (I) of such 

subsection, the plan shall be treated as having a 

rating of 3.5 stars.’’. 

(e) CODING INTENSITY ADJUSTMENT.—Section 1853(a)(1)(C)(ii) of 

such Act (42 U.S.C. 1395w–23(a)(1)(C)(ii)) is amended— 

(1) in the heading, by striking ‘‘DURING PHASEOUT OF BUDGET

NEUTRALITY FACTOR’’ and inserting ‘‘OF CODING ADJUSTMENT’’; 

(2) in the matter before subclause (I), by striking ‘‘through 

2010’’ and inserting ‘‘and each subsequent year’’; and 

(3) in subclause (II)— 

(A) in the first sentence, by inserting ‘‘annually’’ before 

‘‘conduct an analysis’’; 

(B) in the second sentence— 

(i) by inserting ‘‘on a timely basis’’ after ‘‘are incorporated’’; and 

(ii) by striking ‘‘only for 2008, 2009, and 2010’’ and 

inserting ‘‘for 2008 and subsequent years’’; 

(C) in the third sentence, by inserting ‘‘and updated as 

appropriate’’ before the period at the end; and 

(D) by adding at the end the following new subclauses: 


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‘‘(III) In calculating each year’s adjustment for 

2019 and subsequent years, the adjustment factor 

shall be no less than 5.7 percent. 

‘‘(IV) Such adjustment shall be applied to risk 

scores until the Secretary implements risk adjustment using Medicare Advantage diagnostic, cost, 

and use data.’’. 

(f) REPEAL OF COMPARATIVE COST ADJUSTMENT PROGRAM.—Section 1860C–1 of the Social Security Act (42 U.S.C. 1395w–29), as 

added by section 241(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173), 

is repealed. 

SEC. 1103. SAVINGS FROM LIMITS ON MA PLAN ADMINISTRATIVE 

COSTS. 

Section 1857(e) of the Social Security Act (42 U.S.C. 1395w– 

27(e)) is amended by adding at the end the following new paragraph: 

‘‘(4) REQUIREMENT FOR MINIMUM MEDICAL LOSS RATIO.—If the 

Secretary determines for a contract year (beginning with 2014) 

that an MA plan has failed to have a medical loss ratio of at 

least .85— 

‘‘(A) the MA plan shall remit to the Secretary an amount 

equal to the product of— 

‘‘(i) the total revenue of the MA plan under this part 

for the contract year; and 

‘‘(ii) the difference between .85 and the medical loss 

ratio; 

‘‘(B) for 3 consecutive contract years, the Secretary shall 

not permit the enrollment of new enrollees under the plan 

for coverage during the second succeeding contract year; 

and 

‘‘(C) the Secretary shall terminate the plan contract if 

the plan fails to have such a medical loss ratio for 5 consecutive contract years. 

Amounts collected pursuant to subparagraph (A) shall be deposited into the Centers for Medicare & Medicaid Program 

Management Account to be available until expended.’’. 

SEC. 1104. DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS. 

Section 1886(r) of the Social Security Act (42 U.S.C. 1395ww(r)), 

as added by section 3133 of the Patient Protection and Affordable 

Care Act and as amended by section 10316 of such Act, is amended— 

(1) in paragraph (1), by striking ‘‘2015’’ and inserting ‘‘2014’’; 

and 

(2) in paragraph (2)— 

(A) in the matter preceding subparagraph (A), by striking ‘‘2015’’ and inserting ‘‘2014’’; 

(B) in subparagraph (B)(i)— 

(i) in the heading, by inserting ‘‘2014,’’ after ‘‘YEARS’’; 

(ii) in the matter preceding subclause (I), by inserting ‘‘2014,’’ after ‘‘each of fiscal years’’; 

(iii) in subclause (I), by striking ‘‘on such Act’’ and 

inserting ‘‘on the Health Care and Education Affordability Reconciliation Act of 2010’’; and 


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(iv) in the matter following subclause (II), by striking ‘‘minus 1.5 percentage points’’ and inserting 

‘‘minus 0.1 percentage points for fiscal year 2014 and 

minus 0.2 percentage points for each of fiscal years 

2015, 2016, and 2017’’; and 

(C) in subparagraph (B)(ii), in the matter following subclause (II), by striking ‘‘and, for each of 2018 and 2019, 

minus 1.5 percentage points’’ and inserting ‘‘minus 0.2 percentage points for each of fiscal years 2018 and 2019’’. 

SEC. 1105. MARKET BASKET UPDATES. 

(a) IPPS.—Section 1886(b)(3)(B) of the Social Security Act (42 

U.S.C. 1395ww(b)(3)(B)), as amended by sections 3401(a)(4) and 

10319(a) of the Patient Protection and Affordable Care Act, is 

amended— 

(1) in clause (xii)— 

(A) by placing the subclause (II) (inserted by section 

10319(a)(3) of the Patient Protection and Affordable Care 

Act) immediately after subclause (I) and, in such subclause 

(II), by striking ‘‘and’’ at the end; and 

(B) by striking subclause (III) and inserting the following: 

‘‘(III) for fiscal year 2014, by 0.3 percentage point; 

‘‘(IV) for each of fiscal years 2015 and 2016, by 0.2 percentage point; and 

‘‘(V) for each of fiscal years 2017, 2018, and 2019, by 0.75 

percentage point.’’; and 

(2) by striking clause (xiii). 

(b) LONG-TERM CARE HOSPITALS.—Section 1886(m)(4) of the Social Security Act (42 U.S.C. 1395ww(m)(4)), as added by section 

3401(c) of the Patient Protection and Affordable Care Act and 

amended by section 10319(b) of such Act, is amended— 

(1) in subparagraph (A)— 

(A) in clause (iii), by striking ‘‘and’’ at the end; and 

(B) by striking clause (iv) and inserting the following: 

‘‘(iv) for rate year 2014, 0.3 percentage point; 

‘‘(v) for each of rate years 2015 and 2016, 0.2 percentage point; and 

‘‘(vi) for each of rate years 2017, 2018, and 2019, 

0.75 percentage point.’’; 

(2) by striking subparagraph (B); and 

(3) by striking ‘‘(4) OTHER ADJUSTMENT.—’’ and all that follows through ‘‘For purposes’’ and inserting ‘‘(4) OTHER ADJUSTMENT.—For purposes’’ (and redesignating clauses (i) through 

(vi) as subparagraphs (A) through (F), respectively, with appropriate indentation). 

(c) INPATIENT REHABILITATION FACILITIES.—Section 1886(j)(3)(D) 

of the Social Security Act (42 U.S.C. 1395ww(j)(3)(D)), as added by 

section 3401(d)(2) of the Patient Protection and Affordable Care Act 

and amended by section 10319(c) of such Act, is amended— 

(1) in clause (i)— 

(A) by placing the subclause (II) (inserted by section 

10319(c)(3) of the Patient Protection and Affordable Care 

Act) immediately after subclause (I) and, in such subclause 

(II), by striking ‘‘and’’ at the end; and 


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(B) by striking subclause (III) and inserting the following: 

‘‘(III) for fiscal year 2014, 0.3 percentage point; 

‘‘(IV) for each of fiscal years 2015 and 2016, 0.2 

percentage point; and 

‘‘(V) for each of fiscal years 2017, 2018, and 

2019, 0.75 percentage point.’’; 

(2) by striking clause (ii); and 

(3) by striking ‘‘(D) OTHER ADJUSTMENT.—’’ and all that follows through ‘‘For purposes’’ and inserting ‘‘(D) OTHER ADJUST- MENT.—For purposes’’ (and redesignating subclauses (I) 

through (V) as clauses (i) through (v), respectively, with appropriate indentation). 

(d) PSYCHIATRIC HOSPITALS.—Section 1886(s)(3) of the Social Security Act, as added by section 3401(f) of the Patient Protection and 

Affordable Care Act and amended by section 10319(e) of such Act, 

is amended— 

(1) in subparagraph (A)— 

(A) by placing the clause (ii) (inserted by section 

10319(e)(3) of the Patient Protection and Affordable Care 

Act) immediately after clause (i) and, in such clause (ii), by 

striking ‘‘and’’ at the end; and 

(B) by striking clause (iii) and inserting the following: 

‘‘(iii) for the rate year beginning in 2014, 0.3 percentage point; 

‘‘(iv) for each of the rate years beginning in 2015 

and 2016, 0.2 percentage point; and 

‘‘(v) for each of the rate years beginning in 2017, 

2018, and 2019, 0.75 percentage point.’’; 

(2) by striking subparagraph (B); and 

(3) by striking ‘‘(3) OTHER ADJUSTMENT.—’’ and all that follows through ‘‘For purposes’’ and inserting ‘‘(3) OTHER ADJUST- MENT.—For purposes’’ (and redesignating clauses (i) through 

(v) as subparagraphs (A) through (E), respectively, with appropriate indentation). 

(e) OUTPATIENT HOSPITALS.—Section 1833(t)(3)(G) of the Social 

Security Act (42 U.S.C. 1395l(t)(3)(G)), as added by section 

3401(i)(2) of the Patient Protection and Affordable Care Act and 

amended by section 10319(g) of such Act, is amended— 

(1) in clause (i)— 

(A) by placing the subclause (II) (inserted by section 

10319(g)(3) of the Patient Protection and Affordable Care 

Act) immediately after subclause (I) and, in such subclause 

(II), by striking ‘‘and’’ at the end; and 

(B) by striking subclause (III) and inserting the following: 

‘‘(III) for 2014, 0.3 percentage point; 

‘‘(IV) for each of 2015 and 2016, 0.2 percentage 

point; and 

‘‘(V) for each of 2017, 2018, and 2019, 0.75 percentage point.’’; 

(2) by striking clause (ii); and 

(3) by striking ‘‘(G) OTHER ADJUSTMENT.—’’ and all that follows through ‘‘For purposes’’ and inserting ‘‘(G) OTHER ADJUSTMENT.—For purposes’’ (and redesignating subclauses (I) 


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through (V) as clauses (i) through (v), respectively, with appropriate indentation). 

SEC. 1106. PHYSICIAN OWNERSHIP-REFERRAL. 

Section 1877(i) of the Social Security Act (42 U.S.C. 1395nn(i)), 

as added by section 6001(a)(3) of the Patient Protection and Affordable Care Act and as amended by section 10601(a) of such Act, is 

amended— 

(1) in paragraph (1)(A)(i), by striking ‘‘August 1, 2010’’ and 

inserting ‘‘December 31, 2010’’; and 

(2) in paragraph (3)— 

(A) in subparagraph (A)(i), by striking ‘‘an applicable 

hospital (as defined in subparagraph (E))’’ and inserting ‘‘a 

hospital that is an applicable hospital (as defined in subparagraph (E)) or is a high Medicaid facility described in 

subparagraph (F)’’; 

(B) in subparagraph (C)(iii), by inserting after ‘‘date of 

enactment of this subsection’’ the following: ‘‘(or, in the 

case of a hospital that did not have a provider agreement 

in effect as of such date but does have such an agreement 

in effect on December 31, 2010, the effective date of such 

provider agreement)’’; 

(C) by redesignating subparagraphs (F) through (H) as 

subparagraphs (G) through (I), respectively; and 

(D) by inserting after subparagraph (E) the following 

new subparagraph: 

‘‘(F) HIGH MEDICAID FACILITY DESCRIBED.—A high Medicaid facility described in this subparagraph is a hospital 

that— 

‘‘(i) is not the sole hospital in a county; 

‘‘(ii) with respect to each of the 3 most recent years 

for which data are available, has an annual percent of 

total inpatient admissions that represent inpatient admissions under title XIX that is estimated to be greater than such percent with respect to such admissions 

for any other hospital located in the county in which 

the hospital is located; and 

‘‘(iii) meets the conditions described in subparagraph 

(E)(iii).’’. 

SEC. 1107. PAYMENT FOR IMAGING SERVICES. 

Section 1848 of the Social Security Act (42 U.S.C. 1395w–4), as 

amended by section 3135(a) of the Patient Protection and Affordable Care Act, is amended— 

(1) in subsection (b)(4)— 

(A) in subparagraph (B), by striking ‘‘this paragraph’’ 

and inserting ‘‘subparagraph (A)’’; and 

(B) by amending subparagraph (C) to read as follows: 

‘‘(C) ADJUSTMENT IN IMAGING UTILIZATION RATE.—With 

respect to fee schedules established for 2011 and subsequent years, in the methodology for determining practice 

expense relative value units for expensive diagnostic imaging equipment under the final rule published by the Secretary in the Federal Register on November 25, 2009 (42 

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sumption instead of the utilization rates otherwise established in such final rule.’’; and 

(2) in subsection (c)(2)(B)(v), by striking subclauses (III), 

(IV), and (V) and inserting the following new subclause: 

‘‘(III) CHANGE IN UTILIZATION RATE FOR CERTAIN

IMAGING SERVICES.—Effective for fee schedules established beginning with 2011, reduced expenditures attributable to the change in the utilization 

rate applicable to 2011, as described in subsection 

(b)(4)(C).’’. 

Subtitle C—Medicaid 

SEC. 1201. FEDERAL FUNDING FOR STATES. 

Section 1905 of the Social Security Act (42 U.S.C. 1396d), as 

amended by sections 2001(a)(3) and 10201(c) of the Patient Protection and Affordable Care Act, is amended— 

(1) in subsection (y)— 

(A) by redesignating subclause (II) of paragraph (1)(B)(ii) 

as paragraph (5) of subsection (z) and realigning the left 

margins accordingly; and 

(B) by striking paragraph (1) and inserting the following: 

‘‘(1) AMOUNT OF INCREASE.—Notwithstanding subsection (b), 

the Federal medical assistance percentage for a State that is 

one of the 50 States or the District of Columbia, with respect 

to amounts expended by such State for medical assistance for 

newly eligible individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall be equal to— 

‘‘(A) 100 percent for calendar quarters in 2014, 2015, 

and 2016; 

‘‘(B) 95 percent for calendar quarters in 2017; 

‘‘(C) 94 percent for calendar quarters in 2018; 

‘‘(D) 93 percent for calendar quarters in 2019; and 

‘‘(E) 90 percent for calendar quarters in 2020 and each 

year thereafter.’’; and 

(2) in subsection (z)— 

(A) in paragraph (1), by striking ‘‘September 30, 2019’’ 

and inserting ‘‘December 31, 2015’’ and by striking ‘‘subsection (y)(1)(B)(ii)(II)’’ and inserting ‘‘paragraph (3)’’; 

(B) by striking paragraphs (2) through (4) and inserting 

the following: 

‘‘(2)(A) For calendar quarters in 2014 and each year thereafter, the Federal medical assistance percentage otherwise determined under subsection (b) for an expansion State described 

in paragraph (3) with respect to medical assistance for individuals described in section 1902(a)(10)(A)(i)(VIII) who are nonpregnant childless adults with respect to whom the State may 

require enrollment in benchmark coverage under section 1937 

shall be equal to the percent specified in subparagraph (B)(i) 

for such year. 

‘‘(B)(i) The percent specified in this subparagraph for a State 

for a year is equal to the Federal medical assistance percentage (as defined in the first sentence of subsection (b)) for the 

State increased by a number of percentage points equal to the 


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transition percentage (specified in clause (ii) for the year) of 

the number of percentage points by which— 

‘‘(I) such Federal medical assistance percentage for the 

State, is less than 

‘‘(II) the percent specified in subsection (y)(1) for the 

year. 

‘‘(ii) The transition percentage specified in this clause for— 

‘‘(I) 2014 is 50 percent; 

‘‘(II) 2015 is 60 percent; 

‘‘(III) 2016 is 70 percent; 

‘‘(IV) 2017 is 80 percent; 

‘‘(V) 2018 is 90 percent; and 

‘‘(VI) 2019 and each subsequent year is 100 percent.’’; 

and 

(C) by redesignating paragraph (5) (as added by paragraph (1)(A) of this section) as paragraph (3), realigning 

the left margins to align with paragraph (2), and striking 

the heading and all that follows through ‘‘a State is’’ and 

inserting ‘‘A State is’’. 

SEC. 1202. PAYMENTS TO PRIMARY CARE PHYSICIANS. 

(a) IN GENERAL.— 

(1) FEE-FOR-SERVICE PAYMENTS.—Section 1902 of the Social 

Security Act (42 U.S.C. 1396a), as amended by section 

2303(a)(2) of the Patient Protection and Affordable Care Act, is 

amended— 

(A) in subsection (a)(13)— 

(i) by striking ‘‘and’’ at the end of subparagraph (A); 

(ii) by adding ‘‘and’’ at the end of subparagraph (B); 

and 

(iii) by adding at the end the following new subparagraph: 

‘‘(C) payment for primary care services (as defined in 

subsection (jj)) furnished in 2013 and 2014 by a physician 

with a primary specialty designation of family medicine, 

general internal medicine, or pediatric medicine at a rate 

not less than 100 percent of the payment rate that applies 

to such services and physician under part B of title XVIII 

(or, if greater, the payment rate that would be applicable 

under such part if the conversion factor under section 

1848(d) for the year involved were the conversion factor 

under such section for 2009);’’; and 

(B) by adding at the end the following new subsection: 

‘‘(jj) PRIMARY CARE SERVICES DEFINED.—For purposes of subsection (a)(13)(C), the term ‘primary care services’ means— 

‘‘(1) evaluation and management services that are procedure 

codes (for services covered under title XVIII) for services in the 

category designated Evaluation and Management in the 

Healthcare Common Procedure Coding System (established by 

the Secretary under section 1848(c)(5) as of December 31, 2009, 

and as subsequently modified); and 

‘‘(2) services related to immunization administration for vaccines and toxoids for which CPT codes 90465, 90466, 90467, 

90468, 90471, 90472, 90473, or 90474 (as subsequently modified) apply under such System.’’. 


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(2) UNDER MEDICAID MANAGED CARE PLANS.—Section 1932(f) 

of such Act (42 U.S.C. 1396u–2(f)) is amended— 

(A) in the heading, by adding at the end the following: 

‘‘; ADEQUACY OF PAYMENT FOR PRIMARY CARE SERVICES’’; 

and 

(B) by inserting before the period at the end the following: ‘‘and, in the case of primary care services described 

in section 1902(a)(13)(C), consistent with the minimum 

payment rates specified in such section (regardless of the 

manner in which such payments are made, including in 

the form of capitation or partial capitation)’’. 

(b) INCREASE IN PAYMENT USING INCREASED FMAP.—Section 

1905 of the Social Security Act, as amended by section 1004(b) of 

this Act and section 10201(c)(6) of the Patient Protection and Affordable Care Act, is amended by adding at the end the following 

new subsection: 

‘‘(dd) INCREASED FMAP FOR ADDITIONAL EXPENDITURES FOR PRI- MARY CARE SERVICES.—Notwithstanding subsection (b), with respect to the portion of the amounts expended for medical assistance 

for services described in section 1902(a)(13)(C) furnished on or after 

January 1, 2013, and before January 1, 2015, that is attributable 

to the amount by which the minimum payment rate required under 

such section (or, by application, section 1932(f)) exceeds the payment rate applicable to such services under the State plan as of 

July 1, 2009, the Federal medical assistance percentage for a State 

that is one of the 50 States or the District of Columbia shall be 

equal to 100 percent. The preceding sentence does not prohibit the 

payment of Federal financial participation based on the Federal 

medical assistance percentage for amounts in excess of those specified in such sentence.’’. 

SEC. 1203. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS. 

(a) IN GENERAL.—Section 1923(f) of the Social Security Act (42 

U.S.C. 1396r–4(f)), as amended by sections 2551(a)(4) and 

10201(e)(1) of the Patient Protection and Affordable Care Act, is 

amended— 

(1) in paragraph (6)(B)(iii), in the matter preceding subclause 

(I), by striking ‘‘or paragraph (7)’’; and 

(2) by striking paragraph (7) and inserting the following: 

‘‘(7) MEDICAID DSH REDUCTIONS.— ‘‘(A) REDUCTIONS.— ‘‘(i) IN GENERAL.—For each of fiscal years 2014 

through 2020 the Secretary shall effect the following 

reductions: 

‘‘(I) REDUCTION IN DSH ALLOTMENTS.—The Secretary shall reduce DSH allotments to States in 

the amount specified under the DSH health reform methodology under subparagraph (B) for the 

State for the fiscal year. 

‘‘(II) REDUCTIONS IN PAYMENTS.—The Secretary 

shall reduce payments to States under section 

1903(a) for each calendar quarter in the fiscal 

year, in the manner specified in clause (iii), in an 

amount equal to 1⁄4 of the DSH allotment reduction under subclause (I) for the State for the fiscal 

year. 


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‘‘(ii) AGGREGATE REDUCTIONS.—The aggregate reductions in DSH allotments for all States under clause 

(i)(I) shall be equal to— 

‘‘(I) $500,000,000 for fiscal year 2014; 

‘‘(II) $600,000,000 for fiscal year 2015; 

‘‘(III) $600,000,000 for fiscal year 2016; 

‘‘(IV) $1,800,000,000 for fiscal year 2017; 

‘‘(V) $5,000,000,000 for fiscal year 2018; 

‘‘(VI) $5,600,000,000 for fiscal year 2019; and 

‘‘(VII) $4,000,000,000 for fiscal year 2020. 

The Secretary shall distribute such aggregate reductions among States in accordance with subparagraph 

(B). 

‘‘(iii) MANNER OF PAYMENT REDUCTION.—The amount 

of the payment reduction under clause (i)(II) for a 

State for a quarter shall be deemed an overpayment 

to the State under this title to be disallowed against 

the State’s regular quarterly draw for all spending 

under section 1903(d)(2). Such a disallowance is not 

subject to a reconsideration under subsections (d) and 

(e) of section 1116. 

‘‘(iv) DEFINITION.—In this paragraph, the term 

‘State’ means the 50 States and the District of Columbia. 

‘‘(B) DSH HEALTH REFORM METHODOLOGY.—The Secretary shall carry out subparagraph (A) through use of a 

DSH Health Reform methodology that meets the following 

requirements: 

‘‘(i) The methodology imposes the largest percentage 

reductions on the States that— 

‘‘(I) have the lowest percentages of uninsured individuals (determined on the basis of data from 

the Bureau of the Census, audited hospital cost 

reports, and other information likely to yield accurate data) during the most recent year for which 

such data are available; or 

‘‘(II) do not target their DSH payments on— 

‘‘(aa) hospitals with high volumes of Medicaid inpatients (as defined in subsection 

(b)(1)(A)); and 

‘‘(bb) hospitals that have high levels of uncompensated care (excluding bad debt). 

‘‘(ii) The methodology imposes a smaller percentage 

reduction on low DSH States described in paragraph 

(5)(B). 

‘‘(iii) The methodology takes into account the extent 

to which the DSH allotment for a State was included 

in the budget neutrality calculation for a coverage expansion approved under section 1115 as of July 31, 

2009.’’. 

(b) EXTENSION OF DSH ALLOTMENT.—Section 1923(f)(6)(A) of the 

Social Security Act (42 U.S.C. 1396r–4(f)(6)(A)) is amended by adding at the end the following: 


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‘‘(v) ALLOTMENT FOR 2D, 3RD, AND 4TH QUARTERS OF

FISCAL YEAR 2012 AND FOR FISCAL YEAR 2013.—Notwithstanding the table set forth in paragraph (2): 

‘‘(I) 2D, 3RD, AND 4TH QUARTERS OF FISCAL YEAR

2012.—In the case of a State that has a DSH allotment of $0 for the 2d, 3rd, and 4th quarters of fiscal year 2012, the DSH allotment shall be 

$47,200,000 for such quarters. 

‘‘(II) FISCAL YEAR 2013.—In the case of a State 

that has a DSH allotment of $0 for fiscal year 

2013, the DSH allotment shall be $53,100,000 for 

such fiscal year.’’. 

SEC. 1204. FUNDING FOR THE TERRITORIES. 

(a) IN GENERAL.—Part III of subtitle D of title I of the Patient 

Protection and Affordable Care Act, as amended by section 

10104(m) of such Act, is amended by inserting after section 1322 

the following section: 

‘‘SEC. 1323. FUNDING FOR THE TERRITORIES. 

‘‘(a) IN GENERAL.—A territory that— 

‘‘(1) elects consistent with subsection (b) to establish an Exchange in accordance with part II of this subtitle and establishes such an Exchange in accordance with such part shall be 

treated as a State for purposes of such part and shall be entitled to payment from the amount allocated to the territory 

under subsection (c); or 

‘‘(2) does not make such election shall be entitled to an increase in the dollar limitation applicable to the territory under 

subsections (f) and (g) of section 1108 of the Social Security Act 

(42 U.S.C. 1308) for such period in such amount for such territory and such increase shall not be taken into account in computing any other amount under such subsections. 

‘‘(b) TERMS AND CONDITIONS.—An election under subsection (a)(1) 

shall— 

‘‘(1) not be effective unless the election is consistent with a 

form and manner specified by the Secretary and is received not 

later than October 1, 2013; and 

‘‘(2) be contingent upon entering into an agreement between 

the territory and the Secretary that requires that— 

‘‘(A) funds provided under the agreement shall be used 

only to provide premium and cost-sharing assistance to 

residents of the territory obtaining health insurance coverage through the Exchange; and 

‘‘(B) the premium and cost-sharing assistance provided 

under such agreement shall be structured in such a manner so as to prevent any gap in assistance for individuals 

between the income level at which medical assistance is 

available through the territory’s Medicaid plan under title 

XIX of the Social Security Act and the income level at 

which premium and cost-sharing assistance is available 

under the agreement. 

‘‘(c) APPROPRIATION AND ALLOCATION.— ‘‘(1) APPROPRIATION.—Out of any funds in the Treasury not 

otherwise appropriated, there is appropriated for purposes of 

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able during the period beginning with 2014 and ending with 

2019. 

‘‘(2) ALLOCATION.—The Secretary shall allocate the amount 

appropriated under paragraph (1) among the territories for 

purposes of carrying out this section as follows: 

‘‘(A) For Puerto Rico, $925,000,000. 

‘‘(B) For another territory, the portion of $75,000,000 

specified by the Secretary.’’. 

(b) MEDICAID FUNDING.— 

(1) INCREASE IN FUNDING CAPS.—Section 1108(g) of the Social 

Security Act (42 U.S.C. 1308(g)), as amended by section 

2005(a) of the Patient Protection and Affordable Care Act, is 

amended— 

(A) in paragraph (2), by inserting ‘‘and section 1323(a)(2) 

of the Patient Protection and Affordable Care Act’’ after 

‘‘subject to’’; and 

(B) by striking paragraph (5) and inserting the following: 

‘‘(5) ADDITIONAL INCREASE.—The Secretary shall increase the 

amounts otherwise determined under this subsection for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa (after the application of subsection 

(f) and the preceding paragraphs of this subsection) for the period beginning July 1, 2011, and ending on September 30, 

2019, by such amounts that the total additional payments 

under title XIX to such territories equals $6,300,000,000 for 

such period. The Secretary shall increase such amounts in proportion to the amounts applicable to such territories under this 

subsection and subsection (f) on the date of enactment of this 

paragraph.’’. 

(2) DISREGARD OF PAYMENTS; INCREASED FMAP.—Section 2005 

of the Patient Protection and Affordable Care Act is amended— 

(A) by repealing subsection (b) (and the amendments 

made by that subsection) and section 1108(g)(4) of the Social Security Act shall be applied as if such amendments 

had never been enacted; and 

(B) in subsection (c)(2), by striking ‘‘January’’ and inserting ‘‘July’’. 

SEC. 1205. DELAY IN COMMUNITY FIRST CHOICE OPTION. 

Section 1915(k)(1) of the Social Security Act (42 U.S.C. 1396n(k)), 

as added by section 2401 of the Patient Protection and Affordable 

Care Act, is amended by striking ‘‘October 1, 2010’’ and inserting 

‘‘October 1, 2011’’. 

SEC. 1206. DRUG REBATES FOR NEW FORMULATIONS OF EXISTING 

DRUGS. 

(a) TREATMENT OF NEW FORMULATIONS.—Subparagraph (C) of 

section 1927(c)(2) of the Social Security Act (42 U.S.C. 1396r– 

8(c)(2)), as added by section 2501(d) of the Patient Protection and 

Affordable Care Act, is amended to read as follows: 

‘‘(C) TREATMENT OF NEW FORMULATIONS.—In the case of 

a drug that is a line extension of a single source drug or 

an innovator multiple source drug that is an oral solid dosage form, the rebate obligation with respect to such drug 

under this section shall be the amount computed under 


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this section for such new drug or, if greater, the product 

of— 

‘‘(i) the average manufacturer price of the line extension of a single source drug or an innovator multiple 

source drug that is an oral solid dosage form; 

‘‘(ii) the highest additional rebate (calculated as a 

percentage of average manufacturer price) under this 

section for any strength of the original single source 

drug or innovator multiple source drug; and 

‘‘(iii) the total number of units of each dosage form 

and strength of the line extension product paid for 

under the State plan in the rebate period (as reported 

by the State). 

In this subparagraph, the term ‘line extension’ means, 

with respect to a drug, a new formulation of the drug, such 

as an extended release formulation.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall take effect as if included in the enactment of the Patient Protection and Affordable Care Act. 

Subtitle D—Reducing Fraud, Waste, and 

Abuse 

SEC. 1301. COMMUNITY MENTAL HEALTH CENTERS. 

(a) IN GENERAL.—Section 1861(ff)(3)(B) of the Social Security Act 

(42 U.S.C. 1395x(ff)(3)(B)) is amended— 

(1) in clause (ii), by striking ‘‘and’’ at the end; 

(2) by redesignating clause (iii) as clause (iv); and 

(3) by inserting after clause (ii) the following: 

‘‘(iii) provides a significant share of its services to individuals 

who are not eligible for benefits under this title; and’’. 

(b) RESTRICTION.—Section 1861(ff)(3)(A) of such Act (42 U.S.C. 

1395x(ff)(3)(A)) is amended by inserting ‘‘other than in an individual’s home or in an inpatient or residential setting’’ before the period. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to items and services furnished on or after the first day 

of the first calendar quarter that begins at least 12 months after 

the date of the enactment of this Act. 

SEC. 1302. MEDICARE PREPAYMENT MEDICAL REVIEW LIMITATIONS. 

Section 1874A(h) of the Social Security Act (42 U.S.C. 1395w– 

3a(h)) is repealed. 

SEC. 1303. CMS–IRS DATA MATCH TO IDENTIFY FRAUDULENT PROVIDERS. 

(a) AUTHORITY TO DISCLOSE RETURN INFORMATION CONCERNING

OUTSTANDING TAX DEBTS FOR PURPOSES OF ENHANCING MEDICARE

PROGRAM INTEGRITY.— (1) IN GENERAL.—Section 6103(l) of the Internal Revenue 

Code of 1986 is amended by adding at the end the following 

new paragraph: 

‘‘(22) DISCLOSURE OF RETURN INFORMATION TO DEPARTMENT

OF HEALTH AND HUMAN SERVICES FOR PURPOSES OF ENHANCING

MEDICARE PROGRAM INTEGRITY.— 


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‘‘(A) IN GENERAL.—The Secretary shall, upon written request from the Secretary of Health and Human Services, 

disclose to officers and employees of the Department of 

Health and Human Services return information with respect to a taxpayer who has applied to enroll, or reenroll, 

as a provider of services or supplier under the Medicare 

program under title XVIII of the Social Security Act. Such 

return information shall be limited to— 

‘‘(i) the taxpayer identity information with respect to 

such taxpayer; 

‘‘(ii) the amount of the seriously delinquent tax debt 

owed by that taxpayer; and 

‘‘(iii) the taxable year to which the seriously delinquent tax debt pertains. 

‘‘(B) RESTRICTION ON DISCLOSURE.—Return information 

disclosed under subparagraph (A) may be used by officers 

and employees of the Department of Health and Human 

Services for the purposes of, and to the extent necessary 

in, establishing the taxpayer’s eligibility for enrollment or 

reenrollment in the Medicare program, or in any administrative or judicial proceeding relating to, or arising from, 

a denial of such enrollment or reenrollment, or in determining the level of enhanced oversight to be applied with 

respect to such taxpayer pursuant to section 1866(j)(3) of 

the Social Security Act. 

‘‘(C) SERIOUSLY DELINQUENT TAX DEBT.—For purposes of 

this paragraph, the term ‘seriously delinquent tax debt’ 

means an outstanding debt under this title for which a notice of lien has been filed pursuant to section 6323, but the 

term does not include a debt that is being paid in a timely 

manner pursuant to an agreement under section 6159 or 

7122, or a debt with respect to which a collection due process hearing under section 6330, or relief under subsection 

(a), (b), or (f) of section 6015, is requested or pending.’’. 

(2) CONFORMING AMENDMENTS.—Section 6103(p)(4) of such 

Code, as amended by sections 1414 and 3308 the Patient Protection and Affordable Care Act, in the matter preceding subparagraph (A) and in subparagraph (F)(ii), is amended by 

striking ‘‘or (17)’’ and inserting ‘‘(17), or (22)’’ each place it appears. 

(b) SECRETARY’S AUTHORITY TO USE INFORMATION FROM THE DEPARTMENT OF THE TREASURY IN MEDICARE ENROLLMENTS AND REENROLLMENTS.—Section 1866(j)(2) of the Social Security Act (42 

U.S.C. 1395cc(j)), as inserted by section 6401(a) of the Patient Protection and Affordable Care Act, is further amended— 

(1) by redesignating subparagraph (E) as subparagraph (F); 

and 

(2) by inserting after subparagraph (D) the following new 

subparagraph: 

‘‘(E) USE OF INFORMATION FROM THE DEPARTMENT OF

THE TREASURY CONCERNING TAX DEBTS.—In reviewing the 

application of a provider of services or supplier to enroll or 

reenroll under the program under this title, the Secretary 

shall determine, on the basis of information supplied by 

the Secretary of the Treasury pursuant to section 


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6103(l)(22) of the Internal Revenue Code of 1986, whether 

to deny such application or to apply enhanced oversight to 

such provider of services or supplier pursuant to paragraph (3) if the Secretary determines such provider of 

services or supplier owes such a debt.’’. 

(c) AUTHORITY TO ADJUST PAYMENTS OF PROVIDERS OF SERVICES

AND SUPPLIERS WITH THE SAME TAX IDENTIFICATION NUMBER FOR

MEDICARE OBLIGATIONS.—Section 1866(j)(5) of the Social Security 

Act (42 U.S.C. 1395cc(j)(5)), as inserted by section 6401(a) of the 

Patient Protection and Affordable Care Act, is amended— 

(1) in the paragraph heading, by striking ‘‘PAST-DUE’’ and inserting ‘‘MEDICARE’’; 

(2) in subparagraph (A), by striking ‘‘past-due obligations described in subparagraph (B)(ii) of an’’ and inserting ‘‘amount 

described in subparagraph (B)(ii) due from such’’; and 

(3) in subparagraph (B)(ii), by striking ‘‘a past-due obligation’’ and inserting ‘‘an amount that is more than the amount 

required to be paid’’. 

SEC. 1304. FUNDING TO FIGHT FRAUD, WASTE, AND ABUSE. 

(a) FUNDING TO FIGHT FRAUD, WASTE, AND ABUSE.— (1) IN GENERAL.—Section 1817(k) of the Social Security Act 

(42 U.S.C. 1395i(k)), as amended by section 6402(i) of the Patient Protection and Affordable Care Act, is further amended— 

(A) by adding at the end the following new paragraph: 

‘‘(8) ADDITIONAL FUNDING.— ‘‘(A) IN GENERAL.—In addition to the funds otherwise appropriated to the Account from the Trust Fund under 

paragraphs (3)(C) and (4)(A) and for purposes described in 

paragraphs (3)(C) and (4)(A), there are hereby appropriated to such Account from such Trust Fund the following additional amounts: ‘‘(i) For fiscal year 2011, $95,000,000. 

‘‘(ii) For fiscal year 2012, $55,000,000. 

‘‘(iii) For each of fiscal years 2013 and 2014, $30,000,000. 

‘‘(iv) For each of fiscal years 2015 and 2016, $20,000,000. 

‘‘(B) ALLOCATION.—The funds appropriated under this 

paragraph shall be allocated in the same proportion as the 

total funding appropriated with respect to paragraphs 

(3)(A) and (4)(A) was allocated with respect to fiscal year 

2010, and shall be available without further appropriation 

until expended.’’; and 

(B) in paragraph (4)(A), by inserting ‘‘for activities described in paragraph (3)(C) and’’ after ‘‘necessary’’. 

(b) MEDICAID INTEGRITY PROGRAM.—Section 1936(e)(1) of such 

Act (42 U.S.C. 1396–u6(e)(1)) is amended— 

(1) in subparagraph (B), by striking at the end ‘‘and’’; 

(2) in subparagraph (C)— 

(A) by striking ‘‘for each fiscal year thereafter’’ and inserting ‘‘for each of fiscal years 2009 and 2010’’; and 

(B) by striking the period and inserting ‘‘; and’’; and 

(3) by adding at the end the following new subparagraph: 

‘‘(D) for each fiscal year after fiscal year 2010, the 

amount appropriated under this paragraph for the preVerDate Nov 24 2008 07:33 Mar 21, 2010 Jkt 089008 PO 00000 Frm 00052 Fmt 6659 Sfmt 6602 E:\HR\OC\HR448.XXX HR448

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vious fiscal year, increased by the percentage increase in 

the consumer price index for all urban consumers (all 

items; United States city average) over the previous year.’’. 

SEC. 1305. 90-DAY PERIOD OF ENHANCED OVERSIGHT FOR INITIAL 

CLAIMS OF DME SUPPLIERS. 

Section 1866(j), as amended by section 6401 of the Patient Protection and Affordable Care Act, is further amended— 

(1) by redesignating paragraphs (4) through (7) as paragraphs (5) through (8), respectively; and 

(2) by inserting after paragraph (3) the following new paragraph: 

‘‘(4) 90-DAY PERIOD OF ENHANCED OVERSIGHT FOR INITIAL

CLAIMS OF DME SUPPLIERS.—For periods beginning after January 1, 2011, if the Secretary determines that there is a significant risk of fraudulent activity among suppliers of durable 

medical equipment, in the case of a supplier of durable medical 

equipment who is within a category or geographic area under 

title XVIII identified pursuant to such determination and who 

is initially enrolling under such title, the Secretary shall, notwithstanding sections 1816(c), 1842(c), and 1869(a)(2), withhold payment under such title with respect to durable medical 

equipment furnished by such supplier during the 90-day period 

beginning on the date of the first submission of a claim under 

such title for durable medical equipment furnished by such 

supplier.’’. 

Subtitle E—Provisions Relating to 

Revenue 

SEC. 1401. HIGH-COST PLAN EXCISE TAX. 

(a) IN GENERAL.—Section 4980I of the Internal Revenue Code of 

1986, as added by section 9001 of the Patient Protection and Affordable Care Act and amended by section 10901 of such Act, is 

amended— 

(1) in subsection (b)(3)(B)— 

(A) by striking ‘‘The annual’’ and inserting the following: 

‘‘(i) IN GENERAL.—Except as provided in clause (ii), 

the annual’’, and 

(B) by adding at the end the following new clause: 

‘‘(ii) MULTIEMPLOYER PLAN COVERAGE.—Any coverage provided under a multiemployer plan (as defined 

in section 414(f)) shall be treated as coverage other 

than self-only coverage.’’, 

(2) in subsection (b)(3)(C)— 

(A) by striking ‘‘Except as provided in subparagraph 

(D)—’’ 

(B) in clause (i)— 

(i) by striking ‘‘2013’’ each place it appears in the 

heading and the text and inserting ‘‘2018’’, 

(ii) by striking ‘‘$8,500’’ in subclause (I) and inserting ‘‘$10,200 multiplied by the health cost adjustment 

percentage (determined by only taking into account 

self-only coverage)’’, and 


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(iii) by striking ‘‘$23,000’’ in subclause (II) and inserting ‘‘$27,500 multiplied by the health cost adjustment percentage (determined by only taking into account coverage other than self-only coverage)’’, 

(C) by redesignating clauses (ii) and (iii) as clauses (iv) 

and (v), respectively, and by inserting after clause (i) the 

following new clauses: 

‘‘(ii) HEALTH COST ADJUSTMENT PERCENTAGE.—For 

purposes of clause (i), the health cost adjustment percentage is equal to 100 percent plus the excess (if any) 

of— 

‘‘(I) the percentage by which the per employee 

cost for providing coverage under the Blue Cross/ 

Blue Shield standard benefit option under the 

Federal Employees Health Benefits Plan for plan 

year 2018 (determined by using the benefit package for such coverage in 2010) exceeds such cost 

for plan year 2010, over 

‘‘(II) 55 percent. 

‘‘(iii) AGE AND GENDER ADJUSTMENT.— 

‘‘(I) IN GENERAL.—The amount determined 

under subclause (I) or (II) of clause (i), whichever 

is applicable, for any taxable period shall be increased by the amount determined under subclause (II). 

‘‘(II) AMOUNT DETERMINED.—The amount determined under this subclause is an amount equal to 

the excess (if any) of— 

‘‘(aa) the premium cost of the Blue Cross/ 

Blue Shield standard benefit option under the 

Federal Employees Health Benefits Plan for 

the type of coverage provided such individual 

in such taxable period if priced for the age 

and gender characteristics of all employees of 

the individual’s employer, over 

‘‘(bb) that premium cost for the provision of 

such coverage under such option in such taxable period if priced for the age and gender 

characteristics of the national workforce.’’. 

(D) in clause (iv), as redesignated by subparagraph (C)— 

(i) by inserting ‘‘covered by the plan’’ after ‘‘whose 

employees’’, and 

(ii) by striking subclauses (I) and (II) and inserting 

the following: 

‘‘(I) the dollar amount in clause (i)(I) shall be increased by $1,650, and 

‘‘(II) the dollar amount in clause (i)(II) shall be 

increased by $3,450,’’, and 

(E) in clause (v), as redesignated by subparagraph (C)— 

(i) by striking ‘‘2013’’ and inserting ‘‘2018’’, 

(ii) by striking ‘‘clauses (i) and (ii)’’ and inserting 

‘‘clauses (i) (after the application of clause (ii)) and 

(iv)’’, and 


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(iii) by inserting ‘‘in the case of determinations for 

calendar years beginning before 2020’’ after ‘‘1 percentage point’’ in subclause (II) thereof, 

(3) by striking subparagraph (D) of subsection (b)(3), 

(4) in subsection (d)(1)(B), by redesignating clause (ii) as 

clause (iii) and by inserting after clause (i) the following new 

clause: 

‘‘(ii) any coverage under a separate policy, certificate, or contract of insurance which provides benefits 

substantially all of which are for treatment of the 

mouth (including any organ or structure within the 

mouth) or for treatment of the eye, or’’, and 

(5) in subsection (d), by adding at the end the following new 

paragraph: 

‘‘(3) EMPLOYEE.—The term ‘employee’ includes any former 

employee, surviving spouse, or other primary insured individual.’’. 

(b) EFFECTIVE DATES.— (1) Section 9001(c) of the Patient Protection and Affordable 

Care Act is amended by striking ‘‘2012’’ and inserting ‘‘2017’’. 

(2) Section 10901(c) of the Patient Protection and Affordable 

Care Act is amended by striking ‘‘2012’’ and inserting ‘‘2017’’. 

SEC. 1402. MEDICARE TAX. 

(a) INVESTMENT INCOME.— 

(1) IN GENERAL.—Subtitle A of the Internal Revenue Code of 

1986 is amended by inserting after chapter 2 the following new 

chapter: 

‘‘CHAPTER 2A—MEDICARE TAX 

‘‘Sec. 1411. Imposition of tax. 

‘‘SEC. 1411. IMPOSITION OF TAX. 

‘‘(a) IN GENERAL.—Except as provided in subsection (e)— 

‘‘(1) APPLICATION TO INDIVIDUALS.—In the case of an individual, there is hereby imposed (in addition to any other tax 

imposed by this subtitle) for each taxable year a tax equal to 

3.8 percent of the lesser of— 

‘‘(A) net investment income for such taxable year, or 

‘‘(B) the excess (if any) of— 

‘‘(i) the modified adjusted gross income for such taxable year, over 

‘‘(ii) the threshold amount. 

‘‘(2) APPLICATION TO ESTATES AND TRUSTS.—In the case of an 

estate or trust, there is hereby imposed (in addition to any 

other tax imposed by this subtitle) for each taxable year a tax 

of 3.8 percent of the lesser of— 

‘‘(A) the undistributed net investment income for such 

taxable year, or 

‘‘(B) the excess (if any) of— 

‘‘(i) the adjusted gross income (as defined in section 

67(e)) for such taxable year, over 

‘‘(ii) the dollar amount at which the highest tax 

bracket in section 1(e) begins for such taxable year. 

‘‘(b) THRESHOLD AMOUNT.—For purposes of this chapter, the term 

‘threshold amount’ means— 


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‘‘(1) in the case of a taxpayer making a joint return under 

section 6013 or a surviving spouse (as defined in section 2(a)), 

$250,000, 

‘‘(2) in the case of a married taxpayer (as defined in section 

7703) filing a separate return, 1⁄2 of the dollar amount determined under paragraph (1), and ‘‘(3) in any other case, $200,000. 

‘‘(c) NET INVESTMENT INCOME.—For purposes of this chapter— 

‘‘(1) IN GENERAL.—The term ‘net investment income’ means 

the excess (if any) of— 

‘‘(A) the sum of— 

‘‘(i) gross income from interest, dividends, annuities, 

royalties, and rents, other than such income which is 

derived in the ordinary course of a trade or business 

not described in paragraph (2), 

‘‘(ii) other gross income derived from a trade or business described in paragraph (2), and 

‘‘(iii) net gain (to the extent taken into account in 

computing taxable income) attributable to the disposition of property other than property held in a trade or 

business not described in paragraph (2), over 

‘‘(B) the deductions allowed by this subtitle which are 

properly allocable to such gross income or net gain. 

‘‘(2) TRADES AND BUSINESSES TO WHICH TAX APPLIES.—A 

trade or business is described in this paragraph if such trade 

or business is— 

‘‘(A) a passive activity (within the meaning of section 

469) with respect to the taxpayer, or 

‘‘(B) a trade or business of trading in financial instruments or commodities (as defined in section 475(e)(2)). 

‘‘(3) INCOME ON INVESTMENT OF WORKING CAPITAL SUBJECT

TO TAX.—A rule similar to the rule of section 469(e)(1)(B) shall 

apply for purposes of this subsection. 

‘‘(4) EXCEPTION FOR CERTAIN ACTIVE INTERESTS IN PARTNERSHIPS AND S CORPORATIONS.—In the case of a disposition of an 

interest in a partnership or S corporation— 

‘‘(A) gain from such disposition shall be taken into account under clause (iii) of paragraph (1)(A) only to the extent of the net gain which would be so taken into account 

by the transferor if all property of the partnership or S 

corporation were sold for fair market value immediately 

before the disposition of such interest, and 

‘‘(B) a rule similar to the rule of subparagraph (A) shall 

apply to a loss from such disposition. 

‘‘(5) EXCEPTION FOR DISTRIBUTIONS FROM QUALIFIED PLANS.— 

The term ‘net investment income’ shall not include any distribution from a plan or arrangement described in section 

401(a), 403(a), 403(b), 408, 408A, or 457(b). 

‘‘(6) SPECIAL RULE.—Net investment income shall not include 

any item taken into account in determining self-employment 

income for such taxable year on which a tax is imposed by section 1401(b). 

‘‘(d) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this 

chapter, the term ‘modified adjusted gross income’ means adjusted 

gross income increased by the excess of— 


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‘‘(1) the amount excluded from gross income under section 

911(a)(1), over 

‘‘(2) the amount of any deductions (taken into account in 

computing adjusted gross income) or exclusions disallowed 

under section 911(d)(6) with respect to the amounts described 

in paragraph (1). 

‘‘(e) NONAPPLICATION OF SECTION.—This section shall not apply 

to— 

‘‘(1) a nonresident alien, or 

‘‘(2) a trust all of the unexpired interests in which are devoted to one or more of the purposes described in section 

170(c)(2)(B).’’. 

(2) ESTIMATED TAXES.—Section 6654 of the Internal Revenue 

Code of 1986 is amended— 

(A) in subsection (a), by striking ‘‘and the tax under 

chapter 2’’ and inserting ‘‘the tax under chapter 2, and the 

tax under chapter 2A’’, and 

(B) in subsection (f)— 

(i) by striking ‘‘minus’’ at the end of paragraph (2) 

and inserting ‘‘plus’’, and 

(ii) by redesignating paragraph (3) as paragraph (4) 

and inserting after paragraph (2) the following new 

paragraph: 

‘‘(3) the taxes imposed by chapter 2A, minus’’. 

(3) FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST

FUND.—Section 1841(a) of such Act (42 U.S.C. 1395t(a)) is 

amended by adding at the end the following: ‘‘There are hereby 

appropriated to the Trust Fund, out of any moneys in the 

Treasury not otherwise appropriated, amounts equivalent to 

100 per centum of the taxes imposed by 1411 of the Internal 

Revenue Code of 1986 with respect to income described in such 

section and reported to the Secretary of the Treasury or the 

Secretary’s delegate on tax returns under subtitle F of such 

Code, as determined by the Secretary of the Treasury by applying the applicable rate of tax under such section to such income. The amounts appropriated by the preceding sentence 

shall be transferred from time to time from the general fund 

of the Treasury to the Trust Fund, such amounts to be determined on the basis of estimates by the Secretary of the Treasury of the taxes, specified in the preceding sentence, paid to or 

deposited into the Treasury; and proper adjustments shall be 

made in amounts subsequently transferred to the extent prior 

estimates were in excess of or were less than the taxes specified in such sentence.’’. 

(4) CLERICAL AMENDMENT.—The table of chapters for subtitle 

A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to chapter 2 the following new item: 

‘‘CHAPTER 2A—MEDICARE TAX’’. 

(5) EFFECTIVE DATES.—The amendments made by this subsection shall apply to taxable years beginning after December 

31, 2012. 

(b) EARNED INCOME.— 

(1) THRESHOLD.— 


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(A) FICA.—Paragraph (2) of section 3101(b) of the Internal Revenue Code of 1986, as added by section 9015 of the 

Patient Protection and Affordable Care Act and amended 

by section 10906 of such Act, is amended by striking ‘‘and’’ 

at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph: 

‘‘(B) in the case of a married taxpayer (as defined in section 7703) filing a separate return, 1⁄2 of the dollar amount 

determined under subparagraph (A), and’’. 

(B) SECA.—Section 1401(b)(2) of the Internal Revenue 

Code of 1986, as added by section 9015 of the Patient Protection and Affordable Care Act and amended by section 

10906 of such Act, is amended— 

(i) in subparagraph (A), by striking ‘‘and’’ at the end 

of clause (i), by redesignating clause (ii) as clause (iii), 

and by inserting after clause (i) the following new 

clause: 

‘‘(ii) in the case of a married taxpayer (as defined in 

section 7703) filing a separate return, 1⁄2 of the dollar 

amount determined under clause (i), and’’, and 

(ii) in subparagraph (B), by striking ‘‘under clauses 

(i) and (ii)’’ and inserting ‘‘under clause (i), (ii), or (iii) 

(whichever is applicable)’’. 

(2) ESTIMATED TAXES.—Section 6654 of the Internal Revenue 

Code of 1986 is amended by redesignating subsection (m) as 

subsection (n) and by inserting after subsection (l) the following new subsection: 

‘‘(m) SPECIAL RULE FOR MEDICARE TAX.—For purposes of this 

section, the tax imposed under section 3101(b)(2) (to the extent not 

withheld) shall be treated as a tax imposed under chapter 2.’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply with respect to remuneration received, and 

taxable years beginning after, December 31, 2012. 

SEC. 1403. DELAY OF LIMITATION ON HEALTH FLEXIBLE SPENDING 

ARRANGEMENTS UNDER CAFETERIA PLANS. 

(a) IN GENERAL.—Section 10902(b) of the Patient Protection and 

Affordable Care Act is amended by striking ‘‘December 31, 2010’’ 

and inserting ‘‘December 31, 2012’’. 

(b) INFLATION ADJUSTMENT.—Paragraph (2) of section 125(i) of 

the Internal Revenue Code of 1986, as added by section 9005 of the 

Patient Protection and Affordable Care Act and amended by section 

10902 of such Act, is amended— 

(1) in the matter preceding subparagraph (A), by striking 

‘‘December 31, 2011’’ and inserting ‘‘December 31, 2013’’, and 

(2) in subparagraph (B), by striking ‘‘2010’’ and inserting 

‘‘2012’’. 

SEC. 1404. BRAND NAME PHARMACEUTICALS. 

(a) IN GENERAL.—Section 9008 of the Patient Protection and Affordable Care Act is amended— 

(1) in subsection (a)(1), by striking ‘‘2009’’ and inserting 

‘‘2010’’, 

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(A) by striking ‘‘$2,300,000,000’’ in paragraph (1) and inserting ‘‘the applicable amount’’, and 

(B) by adding at the end the following new paragraph: 

‘‘(4) APPLICABLE AMOUNT.—For purposes of paragraph (1), 

the applicable amount shall be determined in accordance with 

the following table: 

‘‘Calendar year Applicable amount 

2011 ............................................................................ $2,500,000,000 

2012 ............................................................................ $3,000,000,000 

2013 ............................................................................ $3,000,000,000 

2014 ............................................................................ $3,000,000,000 

2015 ............................................................................ $3,000,000,000 

2016 ............................................................................ $3,000,000,000 

2017 ............................................................................ $3,500,000,000. 

2018 ............................................................................ $4,200,000,000 

2019 and thereafter .................................................... $2,800,000,000.’’, 

(3) in subsection (d), by adding at the end the following new 

paragraph: 

‘‘(3) JOINT AND SEVERAL LIABILITY.—If more than one person 

is liable for payment of the fee under subsection (a) with respect to a single covered entity by reason of the application of 

paragraph (2), all such persons shall be jointly and severally 

liable for payment of such fee.’’, and 

(4) by striking subsection (j) and inserting the following new 

subsection: 

‘‘(j) EFFECTIVE DATE.—This section shall apply to calendar years 

beginning after December 31, 2010.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in section 9008 of the Patient Protection and Affordable Care Act. 

SEC. 1405. EXCISE TAX ON MEDICAL DEVICE MANUFACTURERS. 

(a) IN GENERAL.—Chapter 32 of the Internal Revenue Code of 

1986 is amended— 

(1) by inserting after subchapter D the following new subchapter: 

‘‘Subchapter E—Medical Devices 

‘‘Sec. 4191. Medical devices. 

‘‘SEC. 4191. MEDICAL DEVICES. 

‘‘(a) IN GENERAL.—There is hereby imposed on the sale of any 

taxable medical device by the manufacturer, producer, or importer 

a tax equal to 2.9 percent of the price for which so sold. 

‘‘(b) TAXABLE MEDICAL DEVICE.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘taxable medical device’ means 

any device (as defined in section 201(h) of the Federal Food, 

Drug, and Cosmetic Act) intended for humans. 

‘‘(2) EXEMPTIONS.—Such term shall not include— 

‘‘(A) devices classified in class I under section 513 of 

such Act, 

‘‘(B) eyeglasses, 

‘‘(C) contact lenses, 


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‘‘(D) hearing aids, and 

‘‘(E) any other medical device determined by the Secretary to be of a type which is generally purchased by the 

general public at retail for individual use.’’, and 

(2) by inserting after the item relating to subchapter D in 

the table of subchapters for such chapter the following new 

item: 

‘‘SUBCHAPTER E. MEDICAL DEVICES.’’. 

(b) CERTAIN EXEMPTIONS NOT TO APPLY.— 

(1) Section 4221(a) of the Internal Revenue Code of 1986 is 

amended by adding at the end the following new sentence: ‘‘In 

the case of the tax imposed by section 4191, paragraphs (3), 

(4), (5), and (6) shall not apply.’’. 

(2) Section 6416(b)(2) of such Code is amended by adding at 

the end the following: ‘‘In the case of the tax imposed by section 4191, subparagraphs (B), (C), (D), and (E) shall not 

apply.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to sales after December 31, 2012. 

(d) REPEAL OF SECTION 9009 OF THE PATIENT PROTECTION AND

AFFORDABLE CARE ACT.—Section 9009 of the Patient Protection 

and Affordable Care Act, as amended by section 10904 of such Act, 

is repealed effective as of the date of enactment of that Act. 

SEC. 1406. HEALTH INSURANCE PROVIDERS. 

(a) IN GENERAL.—Section 9010 of the Patient Protection and Affordable Care Act, as amended by section 10905 of such Act, is 

amended— 

(1) in subsection (a)(1), by striking ‘‘2010’’ and inserting 

‘‘2013’’, 

(2) in subsection (b)(2)— 

(A) by striking ‘‘For purposes of paragraph (1), the net 

premiums’’ and inserting ‘‘For purposes of paragraph (1)— 

‘‘(A) IN GENERAL.—The net premiums’’, and 

(B) by adding at the end the following subparagraph: 

‘‘(B) PARTIAL EXCLUSION FOR CERTAIN EXEMPT ACTIVITIES.—After the application of subparagraph (A), only 50 

percent of the remaining net premiums written with respect to health insurance for any United States health risk 

that are attributable to the activities (other than activities 

of an unrelated trade or business as defined in section 513 

of the Internal Revenue Code of 1986) of any covered entity qualifying under paragraph (3), (4), (26), or (29) of section 501(c) of such Code and exempt from tax under section 501(a) of such Code shall be taken into account.’’, 

(3) in subsection (c)— 

(A) by inserting ‘‘during the calendar year in which the 

fee under this section is due’’ in paragraph (1) after ‘‘risk’’, 

(B) in paragraph (2), by striking subparagraphs (C), (D), 

and (E) and inserting the following new subparagraphs: 

‘‘(C) any entity— 

‘‘(i) which is incorporated as a nonprofit corporation 

under a State law, 

‘‘(ii) no part of the net earnings of which inures to 

the benefit of any private shareholder or individual, no 


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substantial part of the activities of which is carrying 

on propaganda, or otherwise attempting, to influence 

legislation (except as otherwise provided in section 

501(h) of the Internal Revenue Code of 1986), and 

which does not participate in, or intervene in (including the publishing or distributing of statements), any 

political campaign on behalf of (or in opposition to) 

any candidate for public office, and 

‘‘(iii) more than 80 percent of the gross revenues of 

which is received from government programs that target low-income, elderly, or disabled populations under 

titles XVIII, XIX, and XXI of the Social Security Act, 

and 

‘‘(D) any entity which is described in section 501(c)(9) of 

such Code and which is established by an entity (other 

than by an employer or employers) for purposes of providing health care benefits.’’, 

(C) in paragraph (3)(A), by striking ‘‘subparagraph 

(C)(i)(I), (D)(i)(I), or (E)(i)’’ and inserting ‘‘subparagraph (C) 

or (D)’’, and 

(D) by adding at the end the following new paragraph: 

‘‘(4) JOINT AND SEVERAL LIABILITY.—If more than one person 

is liable for payment of the fee under subsection (a) with respect to a single covered entity by reason of the application of 

paragraph (3), all such persons shall be jointly and severally 

liable for payment of such fee.’’, 

(4) by striking subsection (e) and inserting the following: 

‘‘(e) APPLICABLE AMOUNT.—For purposes of subsection (b)(1)— 

‘‘(1) YEARS BEFORE 2019.—In the case of calendar years beginning before 2019, the applicable amount shall be determined in 

accordance with the following table: 

‘‘Calendar year Applicable amount 

2014 ............................................................................ $8,000,000,000 

2015 ............................................................................ $11,300,000,000 

2016 ............................................................................ $11,300,000,000 

2017 ............................................................................ $13,900,000,000 

2018 ............................................................................ $14,300,000,000. 

‘‘(2) YEARS AFTER 2018.—In the case of any calendar year beginning after 2018, the applicable amount shall be the applicable amount for the preceding calendar year increased by the 

rate of premium growth (within the meaning of section 

36B(b)(3)(A)(ii) of the Internal Revenue Code of 1986) for such 

preceding calendar year.’’, 

(5) in subsection (g), by adding at the end the following new 

paragraphs: 

‘‘(3) ACCURACY-RELATED PENALTY.— 

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

a covered entity’s net premiums written with respect to 

health insurance for any United States health risk for any 

calendar year, there shall be paid by the covered entity 

making such understatement, an amount equal to the excess of— 


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‘‘(i) the amount of the covered entity’s fee under this 

section for the calendar year the Secretary determines 

should have been paid in the absence of any such understatement, over 

‘‘(ii) the amount of such fee the Secretary determined based on such understatement. 

‘‘(B) UNDERSTATEMENT.—For purposes of this paragraph, 

an understatement of a covered entity’s net premiums 

written with respect to health insurance for any United 

States health risk for any calendar year is the difference 

between the amount of such net premiums written as reported on the return filed by the covered entity under 

paragraph (1) and the amount of such net premiums written that should have been reported on such return. 

‘‘(C) TREATMENT OF PENALTY.—The penalty imposed 

under subparagraph (A) shall be subject to the provisions 

of subtitle F of the Internal Revenue Code of 1986 that 

apply to assessable penalties imposed under chapter 68 of 

such Code. 

‘‘(4) TREATMENT OF INFORMATION.—Section 6103 of the Internal Revenue Code of 1986 shall not apply to any information 

reported under this subsection.’’, and 

(6) by striking subsection (j) and inserting the following new 

subsection: 

‘‘(j) EFFECTIVE DATE.—This section shall apply to calendar years 

beginning after December 31, 2013.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in section 9010 of the Patient Protection and Affordable Care Act. 

SEC. 1407. DELAY OF ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO MEDICARE PART D SUBSIDY. 

Section 9012(b) of the Patient Protection and Affordable Care Act 

is amended by striking ‘‘2010’’ and inserting ‘‘2012’’. 

SEC. 1408. ELIMINATION OF UNINTENDED APPLICATION OF CELLULOSIC BIOFUEL PRODUCER CREDIT. 

(a) IN GENERAL.—Section 40(b)(6)(E) of the Internal Revenue 

Code of 1986 is amended by adding at the end the following new 

clause: 

‘‘(iii) EXCLUSION OF UNPROCESSED FUELS.—The term 

‘cellulosic biofuel’ shall not include any fuel if— 

‘‘(I) more than 4 percent of such fuel (determined by weight) is any combination of water and 

sediment, or 

‘‘(II) the ash content of such fuel is more than 

1 percent (determined by weight).’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

apply to fuels sold or used on or after January 1, 2010. 

SEC. 1409. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE AND 

PENALTIES. 

(a) IN GENERAL.—Section 7701 of the Internal Revenue Code of 

1986 is amended by redesignating subsection (o) as subsection (p) 

and by inserting after subsection (n) the following new subsection: 

‘‘(o) CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.— 


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‘‘(1) APPLICATION OF DOCTRINE.—In the case of any transaction to which the economic substance doctrine is relevant, 

such transaction shall be treated as having economic substance 

only if— 

‘‘(A) the transaction changes in a meaningful way (apart 

from Federal income tax effects) the taxpayer’s economic 

position, and 

‘‘(B) the taxpayer has a substantial purpose (apart from 

Federal income tax effects) for entering into such transaction. 

‘‘(2) SPECIAL RULE WHERE TAXPAYER RELIES ON PROFIT POTENTIAL.— 

‘‘(A) IN GENERAL.—The potential for profit of a transaction shall be taken into account in determining whether 

the requirements of subparagraphs (A) and (B) of paragraph (1) are met with respect to the transaction only if 

the present value of the reasonably expected pre-tax profit 

from the transaction is substantial in relation to the 

present value of the expected net tax benefits that would 

be allowed if the transaction were respected. 

‘‘(B) TREATMENT OF FEES AND FOREIGN TAXES.—Fees and 

other transaction expenses shall be taken into account as 

expenses in determining pre-tax profit under subparagraph (A). The Secretary shall issue regulations requiring 

foreign taxes to be treated as expenses in determining pretax profit in appropriate cases. 

‘‘(3) STATE AND LOCAL TAX BENEFITS.—For purposes of paragraph (1), any State or local income tax effect which is related 

to a Federal income tax effect shall be treated in the same 

manner as a Federal income tax effect. 

‘‘(4) FINANCIAL ACCOUNTING BENEFITS.—For purposes of 

paragraph (1)(B), achieving a financial accounting benefit shall 

not be taken into account as a purpose for entering into a 

transaction if the origin of such financial accounting benefit is 

a reduction of Federal income tax. 

‘‘(5) DEFINITIONS AND SPECIAL RULES.—For purposes of this 

subsection— 

‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.—The term ‘economic substance doctrine’ means the common law doctrine 

under which tax benefits under subtitle A with respect to 

a transaction are not allowable if the transaction does not 

have economic substance or lacks a business purpose. 

‘‘(B) EXCEPTION FOR PERSONAL TRANSACTIONS OF INDIVIDUALS.—In the case of an individual, paragraph (1) shall 

apply only to transactions entered into in connection with 

a trade or business or an activity engaged in for the production of income. 

‘‘(C) DETERMINATION OF APPLICATION OF DOCTRINE NOT

AFFECTED.—The determination of whether the economic 

substance doctrine is relevant to a transaction shall be 

made in the same manner as if this subsection had never 

been enacted. 

‘‘(D) TRANSACTION.—The term ‘transaction’ includes a series of transactions.’’. 


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(b) PENALTY FOR UNDERPAYMENTS ATTRIBUTABLE TO TRANS- ACTIONS LACKING ECONOMIC SUBSTANCE.— (1) IN GENERAL.—Subsection (b) of section 6662 is amended 

by inserting after paragraph (5) the following new paragraph: 

‘‘(6) Any disallowance of claimed tax benefits by reason of a 

transaction lacking economic substance (within the meaning of 

section 7701(o)) or failing to meet the requirements of any 

similar rule of law.’’. 

(2) INCREASED PENALTY FOR NONDISCLOSED TRANSACTIONS.— Section 6662 is amended by adding at the end the following 

new subsection: 

‘‘(i) INCREASE IN PENALTY IN CASE OF NONDISCLOSED NON- ECONOMIC SUBSTANCE TRANSACTIONS.— ‘‘(1) IN GENERAL.—In the case of any portion of an underpayment which is attributable to one or more nondisclosed 

noneconomic substance transactions, subsection (a) shall be applied with respect to such portion by substituting ‘40 percent’ 

for ‘20 percent’. 

‘‘(2) NONDISCLOSED NONECONOMIC SUBSTANCE TRANS- ACTIONS.—For purposes of this subsection, the term ‘nondisclosed noneconomic substance transaction’ means any portion 

of a transaction described in subsection (b)(6) with respect to 

which the relevant facts affecting the tax treatment are not 

adequately disclosed in the return nor in a statement attached 

to the return. 

‘‘(3) SPECIAL RULE FOR AMENDED RETURNS.—In no event shall 

any amendment or supplement to a return of tax be taken into 

account for purposes of this subsection if the amendment or 

supplement is filed after the earlier of the date the taxpayer 

is first contacted by the Secretary regarding the examination 

of the return or such other date as is specified by the Secretary.’’. 

(3) CONFORMING AMENDMENT.—Subparagraph (B) of section 

6662A(e)(2) is amended— 

(A) by striking ‘‘section 6662(h)’’ and inserting ‘‘subsections (h) or (i) of section 6662’’; and 

(B) by striking ‘‘GROSS VALUATION MISSTATEMENT PEN- ALTY’’ in the heading and inserting ‘‘CERTAIN INCREASED

UNDERPAYMENT PENALTIES’’. 

(c) REASONABLE CAUSE EXCEPTION NOT APPLICABLE TO NONECONOMIC SUBSTANCE TRANSACTIONS.— 

(1) REASONABLE CAUSE EXCEPTION FOR UNDERPAYMENTS.— 

Subsection (c) of section 6664 is amended— 

(A) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; 

(B) by striking ‘‘paragraph (2)’’ in paragraph (4)(A), as so 

redesignated, and inserting ‘‘paragraph (3)’’; and 

(C) by inserting after paragraph (1) the following new 

paragraph: 

‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to any portion of an underpayment which is attributable to one or more 

transactions described in section 6662(b)(6).’’. 

(2) REASONABLE CAUSE EXCEPTION FOR REPORTABLE TRANS- ACTION UNDERSTATEMENTS.—Subsection (d) of section 6664 is 

amended— 


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(A) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; 

(B) by striking ‘‘paragraph (2)(C)’’ in paragraph (4), as so 

redesignated, and inserting ‘‘paragraph (3)(C)’’; and 

(C) by inserting after paragraph (1) the following new 

paragraph: 

‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to any portion of a reportable transaction understatement which is attributable to one or more transactions described in section 

6662(b)(6).’’. 

(d) APPLICATION OF PENALTY FOR ERRONEOUS CLAIM FOR REFUND

OR CREDIT TO NONECONOMIC SUBSTANCE TRANSACTIONS.—Section 

6676 is amended by redesignating subsection (c) as subsection (d) 

and inserting after subsection (b) the following new subsection: 

‘‘(c) NONECONOMIC SUBSTANCE TRANSACTIONS TREATED AS LACKING REASONABLE BASIS.—For purposes of this section, any excessive amount which is attributable to any transaction described in 

section 6662(b)(6) shall not be treated as having a reasonable 

basis.’’. 

(e) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

transactions entered into after the date of the enactment of 

this Act. 

(2) UNDERPAYMENTS.—The amendments made by subsections 

(b) and (c)(1) shall apply to underpayments attributable to 

transactions entered into after the date of the enactment of 

this Act. 

(3) UNDERSTATEMENTS.—The amendments made by subsection (c)(2) shall apply to understatements attributable to 

transactions entered into after the date of the enactment of 

this Act. 

(4) REFUNDS AND CREDITS.—The amendment made by subsection (d) shall apply to refunds and credits attributable to 

transactions entered into after the date of the enactment of 

this Act. 

SEC. 1410. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES. 

The percentage under paragraph (1) of section 202(b) of the Corporate Estimated Tax Shift Act of 2009 in effect on the date of the 

enactment of this Act is increased by 14.5 percentage points. 

SEC. 1411. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS. 

(a) ESTIMATE OF SECRETARY.—The Secretary of the Treasury 

shall annually estimate the impact that the enactment of this Act 

has on the income and balances of the trust funds established 

under section 201 of the Social Security Act (42 U.S.C. 401). 

(b) TRANSFER OF FUNDS.—If, under subsection (a), the Secretary 

of the Treasury estimates that the enactment of this Act has a negative impact on the income and balances of the trust funds established under section 201 of the Social Security Act (42 U.S.C. 401), 

the Secretary shall transfer, not less frequently than quarterly, 

from the general revenues of the Federal Government an amount 

sufficient so as to ensure that the income and balances of such 

trust funds are not reduced as a result of the enactment of this Act. 


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Subtitle F—Other Provisions 

SEC. 1501. COMMUNITY COLLEGE AND CAREER TRAINING GRANT PROGRAM. 

There are authorized to be appropriated, and there are appro- priated, $500,000,000, for each of the fiscal years 2011, 2012, 2013, 

and 2014, to award Community College and Career Training 

Grants authorized under section 278 of the Trade Act of 1974 (19 

U.S.C. 2372), provided that— 

(1) the limitations contained in subsection (a)(2) of such section shall not apply for such fiscal years; 

(2) in addition to workers eligible for training under section 

236 of the Trade Act of 1974 (19 U.S.C. 2296) such Grants may 

be used to develop, offer, or improve an educational or career 

training program that is suited to individuals who are, or may 

become, eligible for unemployment compensation as defined in 

section 85(b) of the Internal Revenue Code of 1986; and 

(3) each State shall receive not less than 0.5 percent of the 

amount appropriated pursuant to this section for each such fiscal year. 

TITLE II—EDUCATION AND HEALTH 

Subtitle A—Education 

SEC. 2001. SHORT TITLE; REFERENCES. 

(a) SHORT TITLE.—This subtitle may be cited as the ‘‘SAFRA 

Act’’. 

(b) REFERENCES.—Except as otherwise expressly provided, whenever in this subtitle an amendment or repeal is expressed in terms 

of an amendment to, or repeal of, a section or other provision, the 

reference shall be considered to be made to a section or other provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.). 

PART I—INVESTING IN STUDENTS AND 

FAMILIES 

SEC. 2101. FEDERAL PELL GRANTS. 

(a) AMOUNT OF GRANTS.—Section 401(b) (20 U.S.C. 1070a(b)) is 

amended— 

(1) by amending paragraph (2)(A) to read as follows: 

‘‘(A) The amount of the Federal Pell Grant for a student 

eligible under this part shall be— 

‘‘(i) the maximum Federal Pell Grant, as specified in 

the last enacted appropriation Act applicable to that 

award year, plus 

‘‘(ii) the amount of the increase calculated under 

paragraph (8)(B) for that year, less 

‘‘(iii) an amount equal to the amount determined to 

be the expected family contribution with respect to 

that student for that year.’’; and 

(2) in paragraph (8)— 

(A) in subparagraph (A)— 


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(i) in clause (ii), by striking the semicolon and inserting ‘‘; and’’; and 

(ii) by striking clauses (iii) through (x) and inserting 

the following: 

‘‘(iii) such sums as may be necessary for fiscal year 

2010 and each subsequent fiscal year to provide the 

amount of increase of the maximum Federal Pell 

Grant required by clauses (ii) and (iii) of subparagraph 

(B).’’; 

(B) in subparagraph (B)— 

(i) in clause (ii), by striking ‘‘and 2011–2012’’ and inserting ‘‘, 2011–2012, and 2012–2013’’; and 

(ii) by striking clause (iii) and inserting the following: 

‘‘(iii) the amount determined under subparagraph 

(C) for each succeeding award year.’’; 

(C) by striking subparagraph (C) and inserting the following: 

‘‘(C) ADJUSTMENT AMOUNTS.— ‘‘(i) AWARD YEAR 2013–2014.—For award year 2013– 

2014, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be 

equal to— ‘‘(I) $5,550 or the total maximum Federal Pell 

Grant for the preceding award year (as determined under clause (v)(II)), whichever is greater, 

increased by a percentage equal to the annual adjustment percentage for award year 2013–2014; 

reduced by ‘‘(II) $4,860 or the maximum Federal Pell Grant 

for which a student was eligible for the preceding 

award year, as specified in the last enacted appropriation Act applicable to that year, whichever is 

greater; and 

‘‘(III) rounded to the nearest $5. 

‘‘(ii) AWARD YEARS 2014–2015 THROUGH 2017–2018.— For each of the award years 2014–2015 through 2017– 

2018, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be 

equal to— 

‘‘(I) the total maximum Federal Pell Grant for 

the preceding award year (as determined under 

clause (v)(II)), increased by a percentage equal to 

the annual adjustment percentage for the award 

year for which the amount under this subparagraph is being determined; reduced by ‘‘(II) $4,860 or the maximum Federal Pell Grant 

for which a student was eligible for the preceding 

award year, as specified in the last enacted appropriation Act applicable to that year, whichever is 

greater; and 

‘‘(III) rounded to the nearest $5. 

‘‘(iii) SUBSEQUENT AWARD YEARS.—For award year 

2018–2019 and each subsequent award year, the 

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poses of subparagraph (B)(iii) shall be equal to the 

amount determined under clause (ii) for award year 

2017–2018. 

‘‘(iv) LIMITATION ON DECREASES.—Notwithstanding 

clauses (i), (ii), and (iii), if the amount determined 

under clause (i), (ii), or (iii) for a particular award year 

is less than the amount determined under this paragraph for the award year preceding that particular 

award year, then the amount determined under such 

clause for that particular award year shall be the 

amount determined under this paragraph for the preceding award year. 

‘‘(v) DEFINITIONS.—For purposes of this subparagraph— 

‘‘(I) the term ‘annual adjustment percentage’ as 

applied to an award year, is equal to the estimated percentage change in the Consumer Price 

Index (as determined by the Secretary, using the 

definition in section 478(f)) for the most recent 

calendar year ending prior to the beginning of 

that award year; and 

‘‘(II) the term ‘total maximum Federal Pell 

Grant’ as applied to a preceding award year, is 

equal to the sum of— 

‘‘(aa) the maximum Federal Pell Grant for 

which a student is eligible during an award 

year, as specified in the last enacted appropriation Act applicable to that preceding 

award year; and 

‘‘(bb) the amount of the increase in the maximum Federal Pell Grant required by this 

paragraph for that preceding award year.’’; 

(D) by striking subparagraph (E); and 

(E) by redesignating subparagraph (F) as subparagraph 

(E). 

(b) CONFORMING AMENDMENTS.—Title IV (20 U.S.C. 1070 et seq.) 

is further amended— 

(1) in section 401(b) (20 U.S.C. 1070a(b))— 

(A) in paragraph (4)— 

(i) by striking ‘‘maximum basic grant level specified 

in the appropriate appropriation Act’’ and inserting 

‘‘maximum amount of a Federal Pell Grant award determined under paragraph (2)(A)’’; and 

(ii) by striking ‘‘such level’’ each place it appears and 

inserting ‘‘such Federal Pell Grant amount’’ in each 

such place; and 

(B) in paragraph (6), by striking ‘‘the grant level specified in the appropriate Appropriation Act for this subpart 

for such year’’ and inserting ‘‘the maximum amount of a 

Federal Pell Grant award determined under paragraph 

(2)(A), for which a student is eligible during such award 

year’’; 

(2) in section 402D(d)(1) (20 U.S.C. 1070a–14(d)(1)), by striking ‘‘exceed the maximum’’ and all that follows through ‘‘Grant, 

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termined under section 401(b)(2)(A), for which a student is eligible, or be less than the minimum Federal Pell Grant amount 

described in section 401(b)(4), for’’; 

(3) in section 435(a)(5)(A)(i)(I) (20 U.S.C. 1085(a)(5)(A)(i)(I)), 

by striking ‘‘one-half the maximum Federal Pell Grant award 

for which a student would be eligible’’ and inserting ‘‘one-half 

the Federal Pell Grant amount, determined under section 

401(b)(2)(A), for which a student would be eligible’’; 

(4) in section 483(e)(3)(A)(ii) (20 U.S.C. 1090(e)(3)(A)(ii)), by 

striking ‘‘based on the maximum Federal Pell Grant award at 

the time of application’’ and inserting ‘‘based on the Federal 

Pell Grant amount, determined under section 401(b)(2)(A), for 

which a student is eligible at the time of application’’; 

(5) in section 485E(b)(1)(A) (20 U.S.C. 1092f(b)(1)(A)), by 

striking ‘‘of such students’ potential eligibility for a maximum 

Federal Pell Grant under subpart 1 of part A’’ and inserting 

‘‘of such students’ potential eligibility for the Federal Pell 

Grant amount, determined under section 401(b)(2)(A), for 

which the student would be eligible’’; and 

(6) in section 894(f)(2)(C)(ii)(I) (20 U.S.C. 1161y(f)(2)(C)(ii)(I)), 

by striking ‘‘the maximum Federal Pell Grant for each award 

year’’ and inserting ‘‘the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which a student may be 

eligible for each award year’’. 

(c) EFFECTIVE DATE.—The amendments made by subsections (a) 

and (b) shall take effect on July 1, 2010. 

SEC. 2102. STUDENT FINANCIAL ASSISTANCE. 

(a) IN GENERAL.—There are authorized to be appropriated, and 

there are appropriated, to carry out subpart 1 of part A of title IV 

of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) (in addition to any other amounts appropriated to carry out such subpart 

and out of any money in the Treasury not otherwise appropriated) 

$13,500,000,000. 

(b) AVAILABILITY OF FUNDS.—Funds appropriated under this section shall be available as of the date of enactment of this subtitle 

and shall remain available until September 30, 2012. 

SEC. 2103. COLLEGE ACCESS CHALLENGE GRANT PROGRAM. 

Section 781 (20 U.S.C. 1141) is amended— 

(1) in the first sentence of subsection (a), by striking 

‘‘$66,000,000’’ and all that follows through the period and inserting ‘‘$150,000,000 for each of the fiscal years 2010 through 

2014. The authority to award grants under this section shall 

expire at the end of fiscal year 2014.’’; and 

(2) in subsection (c)(2), by striking ‘‘0.5 percent’’ and inserting ‘‘1.0 percent’’. 

SEC. 2104. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND MINORITY-SERVING INSTITUTIONS. 

Section 371(b)(1)(A) (20 U.S.C. 1067q(b)(1)(A)) is amended by 

striking ‘‘and 2009.’’ and all that follows and inserting ‘‘through 

2019. The authority to award grants under this section shall expire 

at the end of fiscal year 2019.’’. 


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PART II—STUDENT LOAN REFORM 

SEC. 2201. TERMINATION OF FEDERAL FAMILY EDUCATION LOAN APPROPRIATIONS. 

Section 421 (20 U.S.C. 1071) is amended— 

(1) in subsection (b), in the first sentence of the matter following paragraph (6), by inserting ‘‘, except that no sums may 

be expended after June 30, 2010, with respect to loans under 

this part for which the first disbursement is after such date’’ 

after ‘‘expended’’; and 

(2) by adding at the end the following new subsection: 

‘‘(d) TERMINATION OF AUTHORITY TO MAKE OR INSURE NEW

LOANS.—Notwithstanding paragraphs (1) through (6) of subsection 

(b) or any other provision of law— 

‘‘(1) no new loans (including consolidation loans) may be 

made or insured under this part after June 30, 2010; and 

‘‘(2) no funds are authorized to be appropriated, or may be 

expended, under this Act or any other Act to make or insure 

loans under this part (including consolidation loans) for which 

the first disbursement is after June 30, 2010, 

except as expressly authorized by an Act of Congress enacted after 

the date of enactment of the SAFRA Act.’’. 

SEC. 2202. TERMINATION OF FEDERAL LOAN INSURANCE PROGRAM. 

Section 424(a) (20 U.S.C. 1074(a)) is amended by striking ‘‘September 30, 1976,’’ and all that follows and inserting ‘‘September 30, 

1976, for each of the succeeding fiscal years ending prior to October 

1, 2009, and for the period from October 1, 2009, to June 30, 2010, 

for loans first disbursed on or before June 30, 2010.’’. 

SEC. 2203. TERMINATION OF APPLICABLE INTEREST RATES. 

Section 427A(l) (20 U.S.C. 1077a(l)) is amended— 

(1) in the subsection heading, by inserting ‘‘AND BEFORE

JULY 1, 2010’’ after ‘‘2006’’; 

(2) in paragraph (1), by inserting ‘‘and before July 1, 2010,’’ 

after ‘‘July 1, 2006,’’; 

(3) in paragraph (2), by inserting ‘‘and before July 1, 2010,’’ 

after ‘‘July 1, 2006,’’; 

(4) in paragraph (3), by inserting ‘‘and that was disbursed 

before July 1, 2010,’’ after ‘‘July 1, 2006,’’; and 

(5) in paragraph (4)— 

(A) in the matter preceding subparagraph (A), by striking ‘‘July 1, 2012’’ and inserting ‘‘July 1, 2010’’; and 

(B) by repealing subparagraphs (D) and (E). 

SEC. 2204. TERMINATION OF FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS. 

(a) HIGHER EDUCATION ACT OF 1965.—Section 428 (20 U.S.C. 

1078) is amended— 

(1) in subsection (a)— 

(A) in paragraph (1), in the matter preceding subparagraph (A), by inserting ‘‘for which the first disbursement 

is made before July 1, 2010, and’’ after ‘‘eligible institution’’; and 

(B) in paragraph (5), by striking ‘‘September 30, 2014,’’ 

and all that follows through the period and inserting ‘‘June 

30, 2010.’’; 


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(2) in subsection (b)(1)— 

(A) in subparagraph (G)(ii), by inserting ‘‘and before July 

1, 2010,’’ after ‘‘July 1, 2006,’’; and 

(B) in subparagraph (H)(ii), by inserting ‘‘and that are 

first disbursed before July 1, 2010,’’ after ‘‘July 1, 2006,’’; 

(3) in subsection (f)(1)(A)(ii)— 

(A) by striking ‘‘during fiscal years beginning’’; and 

(B) by inserting ‘‘and first disbursed before July 1, 

2010,’’ after ‘‘October 1, 2003,’’; and 

(4) in subsection (j)(1), by inserting ‘‘, before July 1, 2010,’’ 

after ‘‘section 435(d)(1)(D) of this Act shall’’. 

(b) COLLEGE COST REDUCTION AND ACCESS ACT.—Section 303 of 

the College Cost Reduction and Access Act (Public Law 110–84) is 

repealed. 

SEC. 2205. TERMINATION OF FFEL PLUS LOANS. 

Section 428B(a)(1) (20 U.S.C. 1078–2(a)(1)) is amended by striking ‘‘A graduate’’ and inserting ‘‘Prior to July 1, 2010, a graduate’’. 

SEC. 2206. FEDERAL CONSOLIDATION LOANS. 

(a) IN GENERAL.—Section 428C (20 U.S.C. 1078–3) is amended— 

(1) in subsection (a)(4)(A), by inserting ‘‘, and first disbursed 

before July 1, 2010’’ after ‘‘under this part’’; 

(2) in subsection (b)— 

(A) in paragraph (1)(E), by inserting before the semicolon ‘‘, and before July 1, 2010’’; and 

(B) in paragraph (5), by striking ‘‘In the event that’’ and 

inserting ‘‘If, before July 1, 2010,’’; 

(3) in subsection (c)(1)— 

(A) in subparagraph (A)(ii), by inserting ‘‘and that is disbursed before July 1, 2010,’’ after ‘‘2006,’’; and 

(B) in subparagraph (C), by inserting ‘‘and disbursed before July 1, 2010,’’ after ‘‘1994,’’; and 

(4) in subsection (e), by striking ‘‘September 30, 2014.’’ and 

inserting ‘‘June 30, 2010. No loan may be made under this section for which the disbursement is on or after July 1, 2010.’’. 

(b) TEMPORARY LOAN CONSOLIDATION AUTHORITY.—Part D of 

title IV (20 U.S.C. 1087a et seq.) is amended by inserting after section 459A (20 U.S.C. 1087i) the following: 

‘‘SEC. 459B. TEMPORARY LOAN CONSOLIDATION AUTHORITY. 

‘‘(a) TEMPORARY LOAN CONSOLIDATION AUTHORITY.— 

‘‘(1) IN GENERAL.—A borrower who has 1 or more loans in 2 

or more of the categories described in paragraph (2), and who 

has not yet entered repayment on 1 or more of those loans in 

any of the categories, may consolidate all of the loans of the 

borrower that are described in paragraph (2) into a Federal Direct Consolidation Loan during the period described in paragraph (3). 

‘‘(2) CATEGORIES OF LOANS THAT MAY BE CONSOLIDATED.— 

The categories of loans that may be consolidated under paragraph (1) are— 

‘‘(A) loans made under this part; 

‘‘(B) loans purchased by the Secretary pursuant to section 459A; and 

‘‘(C) loans made under part B that are held by an eligible lender, as such term is defined in section 435(d). 


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‘‘(3) TIME PERIOD IN WHICH LOANS MAY BE CONSOLIDATED.— 

The Secretary may make a Federal Direct Consolidation Loan 

under this section to a borrower whose application for such 

Federal Direct Consolidation Loan is received on or after July 

1, 2010, and before July 1, 2011. 

‘‘(b) TERMS OF LOANS.—A Federal Direct Consolidation Loan 

made under this section shall have the same terms and conditions 

as a Federal Direct Consolidation Loan made under section 455(g), 

except that— 

‘‘(1) in determining the applicable rate of interest on the Federal Direct Consolidation Loan made under this section (other 

than on a Federal Direct Consolidation Loan described in paragraph (2)), section 427A(l)(3) shall be applied without rounding 

the weighted average of the interest rate on the loans consolidated to the nearest higher one-eighth of 1 percent as described in subparagraph (A) of section 427A(l)(3); and 

‘‘(2) if a Federal Direct Consolidation Loan made under this 

section that repays a loan which is subject to an interest rate 

determined under section 427A(g)(2), (j)(2), or (k)(2), then the 

interest rate for such Federal Direct Consolidation Loan shall 

be calculated— 

‘‘(A) by using the applicable rate of interest described in 

section 427A(g)(2), (j)(2), or (k)(2), respectively; and 

‘‘(B) in accordance with section 427A(l)(3).’’. 

SEC. 2207. TERMINATION OF UNSUBSIDIZED STAFFORD LOANS FOR 

MIDDLE-INCOME BORROWERS. 

Section 428H (20 U.S.C. 1078–8) is amended— 

(1) in subsection (a), by inserting ‘‘that are first disbursed before July 1, 2010,’’ after ‘‘under this part’’; 

(2) in subsection (b)— 

(A) by striking ‘‘Any student’’ and inserting ‘‘Prior to 

July 1, 2010, any student’’; and 

(B) by inserting ‘‘for which the first disbursement is 

made before such date’’ after ‘‘unsubsidized Federal Stafford Loan’’; and 

(3) in subsection (h), by inserting ‘‘and that are first disbursed before July 1, 2010,’’ after ‘‘July 1, 2006,’’. 

SEC. 2208. TERMINATION OF SPECIAL ALLOWANCES. 

Section 438 (20 U.S.C. 1087–1) is amended— 

(1) in subsection (b)(2)(I)— 

(A) in the subclause heading, by inserting ‘‘, AND BEFORE

JULY 1, 2010’’ after ‘‘2000’’; 

(B) in clause (i), by inserting ‘‘and before July 1, 2010,’’ 

after ‘‘2000,’’; 

(C) in clause (ii)(II), by inserting ‘‘and before July 1, 

2010,’’ after ‘‘2006,’’; 

(D) in clause (iii), by inserting ‘‘and before July 1, 2010,’’ 

after ‘‘2000,’’; 

(E) in clause (iv), by inserting ‘‘and that is disbursed before July 1, 2010,’’ after ‘‘2000,’’; 

(F) in clause (v)(I), by inserting ‘‘and before July 1, 

2010,’’ after ‘‘2006,’’; and 

(G) in clause (vi)— 


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(i) in the clause heading, by inserting ‘‘, AND BEFORE

JULY 1, 2010’’ after ‘‘2007’’; and 

(ii) in the matter preceding subclause (I), by inserting ‘‘and before July 1, 2010,’’ after ‘‘2007,’’; 

(2) in subsection (c)— 

(A) in paragraph (2)(B)— 

(i) in clause (iii), by inserting ‘‘and’’ after the semicolon; 

(ii) in clause (iv), by striking ‘‘; and’’ and inserting 

a period; and 

(iii) by striking clause (v); and 

(B) in paragraph (6), by inserting ‘‘and first disbursed 

before July 1, 2010,’’ after ‘‘1992,’’; and 

(3) in subsection (d)(2)(B), by inserting ‘‘, and before July 1, 

2010’’ after ‘‘2007’’. 

SEC. 2209. ORIGINATION OF DIRECT LOANS AT INSTITUTIONS OUTSIDE THE UNITED STATES. 

(a) LOANS FOR STUDENTS ATTENDING INSTITUTIONS OUTSIDE THE

UNITED STATES.—Section 452 (20 U.S.C. 1087b) is amended by 

adding at the end the following: 

‘‘(d) INSTITUTIONS OUTSIDE THE UNITED STATES.—Loan funds for 

students (and parents of students) attending institutions outside 

the United States shall be disbursed through a financial institution 

located or operating in the United States and designated by the 

Secretary to serve as the agent of such institutions with respect to 

the receipt of the disbursements of such loan funds and the transfer of such funds to such institutions. To be eligible to receive funds 

under this part, an institution outside the United States shall 

make arrangements with the agent designated by the Secretary 

under this subsection to receive funds under this part.’’. 

(b) CONFORMING AMENDMENTS.— (1) AMENDMENTS.—Section 102 (20 U.S.C. 1002), as amended 

by section 102 of the Higher Education Opportunity Act (Public 

Law 110–315) and section 101 of Public Law 111–39, is amended— 

(A) by striking ‘‘part B’’ each place the term appears and 

inserting ‘‘part D’’; 

(B) in subsection (a)(1)(C), by inserting ‘‘, consistent with 

the requirements of section 452(d)’’ before the period at the 

end; and 

(C) in subsection (a)(2)(A)— 

(i) in the second sentence of the matter preceding 

clause (i), by striking ‘‘made, insured, or guaranteed’’ 

and inserting ‘‘made’’; and 

(ii) in clause (iii)— 

(I) in subclause (III), by striking ‘‘only Federal 

Stafford’’ and all that follows through ‘‘section 

428B’’ and inserting ‘‘only Federal Direct Stafford 

Loans under section 455(a)(2)(A), Federal Direct 

Unsubsidized Stafford Loans under section 

455(a)(2)(D), or Federal Direct PLUS Loans under 

section 455(a)(2)(B)’’; and 

(II) in subclause (V), by striking ‘‘a Federal Stafford’’ and all that follows through ‘‘section 428B’’ 

and inserting ‘‘a Federal Direct Stafford Loan 


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under section 455(a)(2)(A), a Federal Direct Unsubsidized Stafford Loan under section 

455(a)(2)(D), or a Federal Direct PLUS Loan 

under section 455(a)(2)(B)’’. 

(2) EFFECTIVE DATE.—The amendments made by subparagraph (C) of paragraph (1) shall be effective on July 1, 2010, 

as if enacted as part of section 102(a)(1) of the Higher Education Opportunity Act (Public Law 110–315) and subject to 

section 102(e) of such Act as amended by section 101(a)(2) of 

Public Law 111–39 (20 U.S.C. 1002 note). 

SEC. 2210. CONFORMING AMENDMENTS. 

(a) AMENDMENTS.—Section 454 (20 U.S.C. 1087d) is amended— 

(1) in subsection (a)— 

(A) by striking paragraph (4); and 

(B) by redesignating paragraphs (5) through (7) as paragraphs (4) through (6), respectively; and 

(2) in subsection (b)(2), by striking ‘‘(5), (6), and (7)’’ and inserting ‘‘(5), and (6)’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) 

shall take effect on July 1, 2010. 

SEC. 2211. TERMS AND CONDITIONS OF LOANS. 

(a) IN GENERAL.—Section 455 (20 U.S.C. 1087e) is amended— 

(1) in subsection (a)(1), by inserting ‘‘, and first disbursed on 

June 30, 2010,’’ before ‘‘under sections 428’’; and 

(2) in subsection (g)— 

(A) by inserting ‘‘, including any loan made under part 

B and first disbursed before July 1, 2010’’ after ‘‘section 

428C(a)(4)’’; and 

(B) by striking the third sentence. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a)(1) 

shall apply with respect to loans first disbursed under part D of 

title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et 

seq.) on or after July 1, 2010. 

SEC. 2212. CONTRACTS; MANDATORY FUNDS. 

(a) CONTRACTS.—Section 456 (20 U.S.C. 1087f) is amended— 

(1) in subsection (a)— 

(A) by inserting after paragraph (3) the following new 

paragraph: 

‘‘(4) SERVICING BY ELIGIBLE NOT-FOR-PROFIT SERVICERS.— ‘‘(A) SERVICING CONTRACTS.— ‘‘(i) IN GENERAL.—The Secretary shall contract with 

each eligible not-for-profit servicer to service loans 

originated under this part, if the servicer— 

‘‘(I) meets the standards for servicing Federal 

assets that apply to contracts awarded pursuant 

to paragraph (1); and 

‘‘(II) has the capacity to service the applicable 

loan volume allocation described in subparagraph 

(B). 

‘‘(ii) COMPETITIVE MARKET RATE DETERMINATION FOR

FIRST 100,000 BORROWER ACCOUNTS.—The Secretary 

shall establish a separate pricing tier for each of the 

first 100,000 borrower loan accounts at a competitive 

market rate. 


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‘‘(iii) INELIGIBILITY.—An eligible not-for-profit 

servicer shall no longer be eligible for a contract under 

this paragraph after July 1, 2014, if— 

‘‘(I) the servicer has not been awarded such a 

contract before that date; or 

‘‘(II) the servicer’s contract was terminated, and 

the servicer had not reapplied for, and been 

awarded, a contract under this paragraph. 

‘‘(B) ALLOCATIONS.— ‘‘(i) IN GENERAL.—The Secretary shall (except as provided in clause (ii)) allocate to an eligible not-for-profit 

servicer, subject to the contract of such servicer described in subparagraph (A), the servicing rights for 

the loan accounts of 100,000 borrowers (including borrowers who borrowed loans in a prior year that were 

serviced by the servicer). 

‘‘(ii) SERVICER ALLOCATION.—The Secretary may reallocate, increase, reduce, or terminate an eligible notfor-profit servicer’s allocation of servicing rights under 

clause (i) based on the performance of such servicer, 

on the same terms as loan allocations provided by contracts awarded pursuant to paragraph (1).’’; and 

(2) by adding at the end the following: 

‘‘(c) DEFINITION OF ELIGIBLE NOT-FOR-PROFIT SERVICER.—In this 

section: 

‘‘(1) IN GENERAL.—The term ‘eligible not-for-profit servicer’ 

means an entity— 

‘‘(A) that is not owned or controlled in whole or in part 

by— 

‘‘(i) a for profit entity; or 

‘‘(ii) a nonprofit entity having its principal place of 

business in another State; and 

‘‘(B) that— 

‘‘(i) as of July 1, 2009— 

‘‘(I) meets the definition of an eligible not-forprofit holder under section 435(p), except that 

such term does not include eligible lenders described in paragraph (1)(D) of such section; and 

‘‘(II) was performing, or had entered into a contract with a third party servicer (as such term is 

defined in section 481(c)) who was performing, 

student loan servicing functions for loans made 

under part B of this title; 

‘‘(ii) notwithstanding clause (i), as of July 1, 2009— 

‘‘(I) is the sole beneficial owner of a loan for 

which the special allowance rate is calculated 

under section 438(b)(2)(I)(vi)(II) because the loan 

is held by an eligible lender trustee that is an eligible not-for-profit holder as defined under section 

435(p)(1)(D); and 

‘‘(II) was performing, or had entered into a contract with a third party servicer (as such term is 

defined in section 481(c)) who was performing, 

student loan servicing functions for loans made 

under part B of this title; or 


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‘‘(iii) is an affiliated entity of an eligible not-for-profit servicer described in clause (i) or (ii) that— 

‘‘(I) directly employs, or will directly employ (on 

or before the date the entity begins servicing loans 

under a contract awarded by the Secretary pursuant to subsection (a)(3)(A)), the majority of individuals who perform borrower-specific student 

loan servicing functions; and 

‘‘(II) as of July 1, 2009, was performing, or had 

entered into a contract with a third party servicer 

(as such term is defined in section 481(c)) who was 

performing, student loan servicing functions for 

loans made under part B of this title. 

‘‘(2) AFFILIATED ENTITY.—For the purposes of paragraph (1), 

the term ‘affiliated entity’— 

‘‘(A) means an entity contracted to perform services for 

an eligible not-for-profit servicer that— 

‘‘(i) is a nonprofit entity or is wholly owned by a 

nonprofit entity; and 

‘‘(ii) is not owned or controlled, in whole or in part, 

by— 

‘‘(I) a for-profit entity; or 

‘‘(II) an entity having its principal place of business in another State; and 

‘‘(B) may include an affiliated entity that is established 

by an eligible not-for-profit servicer after the date of enactment of the SAFRA Act, if such affiliated entity is otherwise described in paragraph (1)(B)(iii)(I) and subparagraph 

(A) of this paragraph.’’. 

(b) MANDATORY FUNDS.— (1) AMENDMENTS.—Section 458(a) (20 U.S.C. 1087h(a)) is 

amended— 

(A) by redesignating paragraph (5) as paragraph (8); 

(B) by redesignating paragraphs (2) through (4) as paragraphs (3) through (5), respectively; 

(C) by inserting after paragraph (1) the following new 

paragraph: 

‘‘(2) MANDATORY FUNDS FOR ELIGIBLE NOT-FOR-PROFIT- SERVICERS.—For fiscal years 2010 through 2019, there shall be 

available to the Secretary, in addition to any other amounts 

appropriated to carry out this paragraph and out of any money 

in the Treasury not otherwise appropriated, funds to be obligated for administrative costs of servicing contracts with eligible not-for-profit servicers as described in section 456.’’; and 

(D) by inserting after paragraph (5), as redesignated by 

subparagraph (B) of this paragraph, the following: 

‘‘(6) TECHNICAL ASSISTANCE TO INSTITUTIONS OF HIGHER EDU- CATION.— 

‘‘(A) PROVISION OF ASSISTANCE.—The Secretary shall provide institutions of higher education participating, or seeking to participate, in the loan programs under this part 

with technical assistance in establishing and administering such programs. 

‘‘(B) FUNDS.—There are authorized to be appropriated, 

and there are appropriated, to carry out this paragraph (in 


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addition to any other amounts appropriated to carry out 

this paragraph and out of any money in the Treasury not 

otherwise appropriated), $50,000,000 for fiscal year 2010. 

‘‘(C) DEFINITION.—In this paragraph, the term ‘assistance’ means the provision of technical support, training, 

materials, technical assistance, and financial assistance. 

‘‘(7) ADDITIONAL PAYMENTS.— 

‘‘(A) PROVISION OF ASSISTANCE.—The Secretary shall provide payments to loan servicers for retaining jobs at locations in the United States where such servicers were operating under part B on January 1, 2010. 

‘‘(B) FUNDS.—There are authorized to be appropriated, 

and there are appropriated, to carry out this paragraph (in 

addition to any other amounts appropriated to carry out 

this paragraph and out of any money in the Treasury not 

otherwise appropriated), $25,000,000 for each of the fiscal 

years 2010 and 2011.’’. 

(2) CONFORMING AMENDMENT.—Section 458 (20 U.S.C. 

1087h) is further amended by striking ‘‘subsection (a)(3)’’ in 

subsection (b) and inserting ‘‘subsection (a)(4)’’. 

SEC. 2213. AGREEMENTS WITH STATE-OWNED BANKS. 

Part D of title IV (as amended by this subtitle) (20 U.S.C. 1087a 

et seq.) is further amended by adding at the end the following: 

‘‘SEC. 460A. AGREEMENTS WITH STATE-OWNED BANKS. 

‘‘(a) DEFINITION OF ELIGIBLE LENDER.—In this section, the term 

‘eligible lender’ means a lender that, on July 1, 2009, was and continues to be— 

‘‘(1) a bank, the deposits of which are guaranteed by a State; 

‘‘(2) owned by the State in which the lender is located; 

‘‘(3) under the control of a board of directors that includes 

the Governor of the State; and 

‘‘(4) an originator or holder of loans made under the program 

under part B, as such part was in effect on July 1, 2009. 

‘‘(b) AGREEMENTS.— 

‘‘(1) IN GENERAL.—At the request of a State in which an eligible lender is located, the Secretary shall enter into an agreement with the eligible lender under which— 

‘‘(A) the eligible lender agrees to provide student loans 

to borrowers in accordance with this section; and 

‘‘(B) the Secretary agrees to provide Federal loan insurance on the student loans made under this section by that 

eligible lender to borrowers who— 

‘‘(i) are residents of the State in which the eligible 

lender is located; or 

‘‘(ii) attend an institution of higher education in 

such State. 

‘‘(2) TERMS OF LOANS.—Loans covered by an agreement 

under this section shall have the same terms and conditions as 

loans made under part B, as such part was in effect on June 

30, 2010. 

‘‘(3) PAYMENTS TO ELIGIBLE LENDER.—An agreement under 

this section shall provide the eligible lender with the equivalent payments and subsidies as those provided for loans made 

under part B, as such part was in effect on June 30, 2010. 


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‘‘(4) FFEL PROGRAM REGULATIONS.—An agreement under 

this section, any loans made under this section, and the participation of institutions of higher education under this section, 

shall be subject to regulations issued by the Secretary under 

part B, as such part was in effect on June 30, 2010. 

‘‘(c) INSTITUTIONS OF HIGHER EDUCATION.—An institution of 

higher education that is located in the same State as an eligible 

lender that has an agreement with the Secretary under this section, or an institution of higher education that is located in another 

State and is attended by borrowers described in subsection 

(b)(1)(B)(i), may choose to participate in the loan program operated 

pursuant to the agreement. If such institution of higher education 

chooses such participation, the institution shall carry out the institution’s responsibilities with respect to loans made pursuant to the 

agreement in accordance with subsection (b)(4). 

‘‘(d) BORROWERS.—A borrower described in subsection (b)(1)(B) 

may choose to borrow a loan made pursuant to an agreement described in subsection (b)(1). A borrower of a loan made pursuant to 

such agreement shall be subject to the loan terms and conditions 

required by the agreement, and shall not be eligible to receive a 

loan made under this part concurrently with a loan made under 

this section. 

‘‘(e) INAPPLICABILITY.—Sections 451 through 460 shall not apply 

to this section.’’. 

SEC. 2214. INCOME-BASED REPAYMENT. 

Section 493C (20 U.S.C. 1098e) is amended by adding at the end 

the following new subsection: 

‘‘(e) SPECIAL TERMS FOR NEW BORROWERS ON AND AFTER JULY 1, 

2014.—With respect to any loan made to a new borrower on or 

after July 1, 2014— 

‘‘(1) subsection (a)(3)(B) shall be applied by substituting ‘10 

percent’ for ‘15 percent’; and 

‘‘(2) subsection (b)(7)(B) shall be applied by substituting ‘20 

years’ for ‘25 years’.’’. 

Subtitle B—Health 

SEC. 2301. INSURANCE REFORMS. 

(a) EXTENDING CERTAIN INSURANCE REFORMS TO GRANDFATHERED PLANS.—Section 1251(a) of the Patient Protection and 

Affordable Care Act, as added by section 10103(d) of such Act, is 

amended by adding at the end the following: 

‘‘(4) APPLICATION OF CERTAIN PROVISIONS.— 

‘‘(A) IN GENERAL.—The following provisions of the Public 

Health Service Act (as added by this title) shall apply to 

grandfathered health plans for plan years beginning with 

the first plan year to which such provisions would otherwise apply: 

‘‘(i) Section 2708 (relating to excessive waiting periods). 

‘‘(ii) Those provisions of section 2711 relating to lifetime limits. 

‘‘(iii) Section 2712 (relating to rescissions). 


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‘‘(iv) Section 2714 (relating to extension of dependent coverage). 

‘‘(B) PROVISIONS APPLICABLE ONLY TO GROUP HEALTH

PLANS.— 

‘‘(i) PROVISIONS DESCRIBED.—Those provisions of section 2711 relating to annual limits and the provisions 

of section 2704 (relating to pre-existing condition exclusions) of the Public Health Service Act (as added by 

this subtitle) shall apply to grandfathered health plans 

that are group health plans for plan years beginning 

with the first plan year to which such provisions otherwise apply. 

‘‘(ii) ADULT DEPENDENT COVERAGE.—For plan years 

beginning before January 1, 2014, the provisions of 

section 2714 of the Public Health Service Act (as 

added by this subtitle) shall apply in the case of an 

adult dependent with respect to a grandfathered 

health plan that is a group health plan only if such dependent is not eligible to enroll in an eligible employer-sponsored health plan (as defined in section 

5000A(f)(2) of the Internal Revenue Code of 1986) 

other than such grandfathered health plan.’’. 

(b) CLARIFICATION REGARDING DEPENDENT COVERAGE.—Section 

2714(a) of the Public Health Service Act, as added by section 

1001(5) of the Patient Protection and Affordable Care Act, is 

amended by striking ‘‘(who is not married)’’. 

SEC. 2302. DRUGS PURCHASED BY COVERED ENTITIES. 

Section 340B of the Public Health Service Act (42 U.S.C. 256b), 

as amended by sections 7101 and 7102 of the Patient Protection 

and Affordable Care Act, is amended— 

(1) in subsection (a)— 

(A) in paragraphs (1), (2), (5), (7), and (9), by striking the 

terms ‘‘covered drug’’ and ‘‘covered drugs’’ each place either 

term appears and inserting ‘‘covered outpatient drug’’ or 

‘‘covered outpatient drugs’’, respectively; 

(B) in paragraph (4)(L)— 

(i) in clause (i), by striking ‘‘and’’ at the end; 

(ii) in clause (ii), by striking the period and inserting 

‘‘; and’’; and 

(iii) by inserting after clause (ii), the following: 

‘‘(iii) does not obtain covered outpatient drugs 

through a group purchasing organization or other 

group purchasing arrangement.’’; and 

(C) in paragraph (5)— 

(i) by striking subparagraph (C); 

(ii) by redesignating subparagraphs (D) and (E) as 

subparagraphs (C) and (D), respectively; and 

(iii) in subparagraph (D), as so redesignated, by 

striking ‘‘subparagraph (D)’’ and inserting ‘‘subparagraph (C)’’; 

(2) by striking subsection (c); 

(3) in subsection (d)— 

(A) by striking ‘‘covered drugs’’ each place it appears and 

inserting ‘‘covered outpatient drugs’’; 


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(B) by striking ‘‘(a)(5)(D)’’ each place it appears and inserting ‘‘(a)(5)(C)’’; and 

(C) by striking ‘‘(a)(5)(E)’’ each place it appears and inserting ‘‘(a)(5)(D)’’; and 

(4) by inserting after subsection (d) the following: 

‘‘(e) EXCLUSION OF ORPHAN DRUGS FOR CERTAIN COVERED ENTITIES.—For covered entities described in subparagraph (M), (N), or 

(O) of subsection (a)(4), the term ‘covered outpatient drug’ shall not 

include a drug designated by the Secretary under section 526 of the 

Federal Food, Drug, and Cosmetic Act for a rare disease or condition.’’. 

SEC. 2303. COMMUNITY HEALTH CENTERS. 

Section 10503(b)(1) of the Patient Protection and Affordable Care 

Act is amended— 

(1) in subparagraph (A), by striking ‘‘700,000,000’’ and inserting ‘‘1,000,000,000’’; 

(2) in subparagraph (B), by striking ‘‘800,000,000’’ and inserting ‘‘1,200,000,000’’; 

(3) in subparagraph (C), by striking ‘‘1,000,000,000’’ and inserting ‘‘1,500,000,000’’; 

(4) in subparagraph (D), by striking ‘‘1,600,000,000’’ and inserting ‘‘2,200,000,000’’; and 

(5) in subparagraph (E), by striking ‘‘2,900,000,000’’ and inserting ‘‘3,600,000,000’’. 

PART B: TEXT OF THE AMENDMENT TO THE AMENDMENT IN THE NATURE OF A SUBSTITUTE TO H.R. 4872 TO BE CONSIDERED AS ADOPTED

Page 1, line 3, strike ‘‘Affordability’’. 

Page 3, line 4, strike ‘‘AFFORDABILITY’’ and insert ‘‘TAX 

CREDITS’’. 

Page 14, lines 21 and 22, strike ‘‘(and any other person specified 

by the Secretary)’’ and insert ‘‘(or any person carrying out 1 or 

more responsibilities of an Exchange under section 1311(f)(3) or 

1321(c) of the Patient Protection and Affordable Care Act)’’. 

Page 15, lines 20 and 21, strike ‘‘Any other similar information 

necessary to carry out this subsection and’’ and insert ‘‘Information 

necessary to’’. 

Page 17, strike lines 4 through 14, and insert the following: 

(3) COVERAGE UNDER SELF-EMPLOYED DEDUCTION.—Section 

162(l)(2)(B) of such Code is amended by inserting ‘‘, or any dependent, or individual described in subparagraph (D) of paragraph (1) with respect to,’’ after ‘‘spouse of’’. 

Page 27, after line 22, insert the following: 

(d) REDUCING GROWTH RATE OF OUT-OF-POCKET COST THRESHOLD.—Section 1860D–2(b) of the Social Security Act (42 U.S.C. 

1395w–102(b)) is amended— 

(1) in paragraph (4)(B)(i)— 

(A) in subclause (I), by striking ‘‘or’’ at the end; 

(B) by redesignating subclause (II) as subclause (VI); 

and 

(C) by inserting after subclause (I) the following new 

subclauses: 


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‘‘(II) for each of years 2007 through 2013, is 

equal to the amount specified in this subparagraph for the previous year, increased by the annual percentage increase described in paragraph 

(6) for the year involved; 

‘‘(III) for 2014 and 2015, is equal to the amount 

specified in this subparagraph for the previous 

year, increased by the annual percentage increase 

described in paragraph (6) for the year involved, 

minus 0.25 percentage point; 

‘‘(IV) for each of years 2016 through 2019, is 

equal to the amount specified in this subparagraph for the previous year, increased by the lesser of— 

‘‘(aa) the annual percentage increase described in paragraph (7) for the year involved, 

plus 2 percentage points; or 

‘‘(bb) the annual percentage increase described in paragraph (6) for the year; 

‘‘(V) for 2020, is equal to the amount that would 

have been applied under this subparagraph for 

2020 if the amendments made by section 

1101(d)(1) of the Health Care and Education Reconciliation Act of 2010 had not been enacted; or’’; 

and 

(2) by adding at the end the following new paragraph: 

‘‘(7) ADDITIONAL ANNUAL PERCENTAGE INCREASE.—The annual percentage increase specified in this paragraph for a year 

is equal to the annual percentage increase in the consumer 

price index for all urban consumers (United States city average) for the 12-month period ending in July of the previous 

year.’’. 

Page 46, amend lines 3 through 6 to read as follows: 

‘‘(III) In calculating each year’s adjustment, the 

adjustment factor shall be for 2014, not less than 

the adjustment factor applied for 2010, plus 1.3 

percentage points; for each of years 2015 through 

2018, not less than the adjustment factor applied 

for the previous year, plus 0.25 percentage point; 

and for 2019 and each subsequent year, not less 

than 5.7 percent.’’. 

Page 47, strike lines 16 through 19. 

Page 48, line 14, strike ‘‘Affordability’’. 

Page 57, after line 3, insert the following: 

SEC. 1108. PE GPCI ADJUSTMENT FOR 2010. 

Effective as if included in the enactment of the Patient Protection and Affordable Care Act, section 1848(e)(1)(H)(i) of the Social 

Security Act (42 U.S.C. 1395w–4(e)(1)(H)(i)), as added by section 

3102(b)(2) of the Patient Protection and Affordable Care Act, is 

amended by striking ‘‘3⁄4’’ and inserting ‘‘1⁄2’’. 

SEC. 1109. PAYMENT FOR QUALIFYING HOSPITALS. 

(a) IN GENERAL.—From the amount available under subsection 

(b), the Secretary of Health and Human Services shall provide for 

a payment to qualifying hospitals (as defined in subsection (d)) for 


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fiscal years 2011 and 2012 of the amount determined under subsection (c). 

(b) AMOUNTS AVAILABLE.—There shall be available from the Federal Hospital Insurance Trust Fund $400,000,000 for payments 

under this section for fiscal years 2011 and 2012. 

(c) PAYMENT AMOUNT.—The amount of payment under this section for a qualifying hospital shall be determined, in a manner consistent with the amount available under subsection (b), in proportion to the portion of the amount of the aggregate payments under 

section 1886(d) of the Social Security Act to the hospital for fiscal 

year 2009 bears to the sum of all such payments to all qualifying 

hospitals for such fiscal year. 

(d) QUALIFYING HOSPITAL DEFINED.—In this section, the term 

‘‘qualifying hospital’’ means a subsection (d) hospital (as defined for 

purposes of section 1886(d) of the Social Security Act) that is located in a county that ranks, based upon its ranking in age, sex, 

and race adjusted spending for benefits under parts A and B under 

title XVIII of such Act per enrollee, within the lowest quartile of 

such counties in the United States. 

Page 69, strike lines 7 through 10, and insert the following: 

‘‘(1) not be effective unless the election is consistent with section 1321 and is received not later than October 1, 2013; and’’. 

Page 74, line 11, strike ‘‘a significant share’’ and insert ‘‘at least 

40 percent’’. 

Page 75, beginning on line 5, strike section 1303 (and redesignate the succeeding sections accordingly). 

Page 87, line 20, strike ‘‘medicare tax’’ and insert ‘‘unearned 

income medicare contribution’’. 

Page 88, line 1, strike ‘‘MEDICARE TAX’’ and insert ‘‘UNEARNED INCOME MEDICARE CONTRIBUTION’’. 

Page 93, beginning with line 7, strike all through page 94, line 

5. 

Page 94, line 6, strike ‘‘(4)’’ and insert ‘‘(3)’’. 

Page 94, strike the matter between lines 10 and 11 and insert 

the following: 

‘‘CHAPTER 2A—UNEARNED INCOME MEDICARE CONTRIBUTION’’. 

Page 94, line 11, strike ‘‘(5)’’ and insert ‘‘(4)’’. 

Page 97, amend the table after line 16 to read as follows: 

‘‘Calendar year Applicable amount 

2011 ............................................................................ $2,500,000,000 

2012 ............................................................................ $2,800,000,000 

2013 ............................................................................ $2,800,000,000 

2014 ............................................................................ $3,000,000,000 

2015 ............................................................................ $3,000,000,000 

2016 ............................................................................ $3,000,000,000 

2017 ............................................................................ $4,000,000,000. 

2018 ............................................................................ $4,100,000,000 

2019 and thereafter .................................................... $2,800,000,000.’’, 

Page 98, line 22, strike ‘‘2.9 percent’’ and insert ‘‘2.3 percent’’. 

Page 99, strike lines 9 and 10. 

Page 99, line 11, strike ‘‘(B)’’ and insert ‘‘(A)’’. 


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83 

Page 99, line 12, strike ‘‘(C)’’ and insert ‘‘(B)’’. 

Page 99, line 13, strike ‘‘(D)’’ and insert ‘‘(C)’’. 

Page 99, line 14, strike ‘‘(E)’’ and insert ‘‘(D)’’. 

Page 114, line 8, strike ‘‘14.5’’ and insert ‘‘15.75’’ 

Page 114, beginning on line 9, strike section 1411. 

Page 115, line 12, insert ‘‘and’’ after the semicolon. 

Page 115, strike lines 4 through 23 and insert the following: 

Section 279(b) of the Trade Act of 1974 (19 U.S.C. 2372a(b)) is 

amended by striking ‘‘SUPPLEMENT’’ and all that follows through 

‘‘Funds’’ and inserting ‘‘There are’’ and by striking ‘‘pursuant’’ and 

all that follows and inserting ‘‘$500,000,000 for each of fiscal years 

2011, 2012, 2013, and 2014 to carry out this subchapter, except 

that the limitations contained in section 278(a)(2) shall not apply 

to such funds and each State shall receive not less than 0.5 percent 

of the amount appropriated pursuant to this subsection for each 

such fiscal year.’’. 

Page 117, beginning on line 9, strike subparagraphs (A) and (B) 

and insert the following: 

(A) in subparagraph (A)— 

(i) in the matter preceding clause (i), by striking ‘‘, 

to carry out subparagraph (B) of this paragraph’’; and 

(ii) by striking clauses (iii) through (x) and inserting 

the following: 

‘‘(iii) to carry out subparagraph (B) of this paragraph, such sums as may be necessary for fiscal year 

2010 and each subsequent fiscal year to provide the 

amount of increase of the maximum Federal Pell 

Grant required by clauses (ii) and (iii) of subparagraph 

(B); and 

‘‘(iv) to carry out this section, $13,500,000,000 for 

fiscal year 2011.’’; 

(B) in subparagraph (B)— 

(i) in the matter preceding clause (i), by striking 

‘‘subparagraph (A)’’ and inserting ‘‘clauses (i) through 

(iii) of subparagraph (A)’’; 

(ii) in clause (ii), by striking ‘‘and 2011–2012’’ and 

inserting ‘‘, 2011–2012, and 2012–2013’’; and 

(iii) by striking clause (iii) and inserting the following: 

‘‘(iii) the amount determined under subparagraph 

(C) for each succeeding award year.’’; 

Page 124, beginning on line 3, strike section 2102 (and redesignate the succeeding sections accordingly). 

Page 145, beginning on line 18, strike section 2213 (and redesignate the succeeding section accordingly). 

Page 150, line 11, strike ‘‘DEPENDENT’’ and insert ‘‘CHILD’’. 

Page 150, line 16, strike ‘‘dependent’’ and insert ‘‘child’’. 

Page 150, line 18, strike ‘‘dependent’’ and insert ‘‘adult child’’. 

Æ 


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